Gold Discussion for Investors and Market Analysts

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(Mon Aug 04 1997 00:37)
Noose Tightens Around President William Jefferson Sleazo
A witness to K. Willey's tryst with Clinton has emerged. Incredibly, Willey's husband comitted suicide the day after the alleged infidelity occurred.

(Mon Aug 04 1997 00:44)
......................................................................................................................................................................................................................................................................................................................................................................................................................................................................Sorry, that's all the sand my sandbox can spare. I will be back later with another shitload to cover the rest of what has been posted of late.

Who Cares?
(Mon Aug 04 1997 01:08)
Depression - A Leading Indicator?

Oh, what the hell. This was originally developed as a grant project
at my previous job, it's original intent was to develop a tool for
predicting strategic Information System ( IS ) costs.

It's based on a synthesis of correlations between historical
and modern industry, empirical data, some guesswork. To wit -

I've already mentioned that I watch Intel/Microsoft for layoffs
as a leading indicator. This is based upon the railroad
industry in 1892. Intel and the railroad monopolies have a lot
in common. High capital costs, rapidly expanding industry,
derive much of their value from the destruction of local commodity/
information monopolies, dependent upon previously unexploited
commodities, state-of-the-art technical processes and workers,
major driver of the economy.

In 1892, the railroads hit a point of diminishing return on
investment, just as Intel / Microsoft will someday. They began
large layoffs of railroad workers, which in turn ( according to
observers ) sparked the 1893 depression.

Part of the "New Era", probably most, is being driven by euphoria
about the "Information Age". Please ask yourself this - why isn't
there a railroad stop at every house in America? Diminishing
returns. True of all industries. How might we predict that DR
point for Intel?

Cost of Information. COI. When the COI is dropping rapidly,
previously untenable IS projects become viable. Money should be
spent on marginal IS projects. When the COI is rising, IS spending
should be curtailed. COI is the cost driver for your typical IS
department, although 99% of them probably don't know this yet. : )

You should ( theoretically ) be able to derive a COI for specific
industries, if not companies. It should be possible to correlate
historical empirical data on the COI with the general economic
conditions of the country as well as the IS industry

I envision COI as something akin to the CPI - a marketbasket of
weighted costs for RAM, programmer payrates, telecom cost / minute,
computers, etc.

What is important here is not the COI value itself, but the
relative RATE OF CHANGE. Very important.

If someone were to try to use this, they'd have to gather empirical
data over the past 15-20 years, on items related to the IS industry,
develop a weighting and correlation that matched up well as a
predictor of what really happened in the economy, then monitor the
rate of change of this formula during the present.

I'm think it's pretty unlikely that a major depression / blowout
could occur while the principal driver of today's economy ( IS
industry ) is still ramping up in investment and income.

Who Cares/
(Mon Aug 04 1997 01:17)

Is there any difference between a delusional population that pushes
the NYSE up to record highs, and a population that believes an
economy that is 40% controlled by federal, state and local
governments is a "free market"? : )

the wizard
(Mon Aug 04 1997 01:33)
do you think the dollar is strong ?
is is weak
in fact,

Who Cares?
(Mon Aug 04 1997 03:11)
Who Cares?

A site I check once in awhile...

It's got a well-scaled DJIA chart for 82 to 97. I've
checked it before, but tonight I'm just really struck
by how clearly it's exponential. We really might see
a 10,000 DOW within a year.

It's *really* going to suck when it blows up. 2000 is
going to rank right up there with John Law. : )

John Disney
(Mon Aug 04 1997 03:15)
Two Items from RSA press. The first concerns the
well known anti apartheid activist Alan Boesak ( also
Head of the Foundation for Peace and Justice ) .
The second concerns the son of Arch Bishop
Desmond Tutu - Leader of the Anglican Church in RSA
and Chairman of the Truth and Reconciliation Commision.
( I'd like to meet the guy that thinks up the names
of these "organizations" ) .

"Boesak in court today

Former ANC Western Cape leader Dr Allan Boesak is to
appear in the Cape Town High Court today on 32 charges
of theft and fraud involving more than R8,8-million.
He is to appear together with the former bookkeeper of
the Foundation for Peace and Justice, Freddie Steenkamp.
The case is expected to be postponed to October to allow
Boesak's legal team time to study the 58-page indictment.

Trevor Tutu to be arrested

East London detectives arrive in Johannesburg today to
arrest Trevor Tutu, son of Truth and Reconcilliation
Commission chairman, Archbishop Desmond Tutu.
Tutu has been on the run for almost four years. He is
facing a three-and-a-half year jail for making a bomb
threat at East London Airport in 1989.
Tutu jumped bail of R10 000 when his appeal against his
sentence failed.
He is known to be living in Johannesburg and detectives
will this week pick him up and return him to East London
to serve his term."

Cheech @ Chong
(Mon Aug 04 1997 04:13)
for Who Cares
We've said it once here, and we will say it again.

Basketball Jones,
I got a basketball jones,
I got a basketball jones,
Ooh baby, ooh, ooh oo-ooh.

food for thought
(Mon Aug 04 1997 04:16)

From Nostradamus...

VI.13 A dubious US president shall be impeached.

Un dubieux ne viendra long du regne
La plus grand part le voudra soustenir
Un captiole ne voudra point qu'il regne
Sa grande chair ne pourra maintenir

Dubieux: dubious, shady; plus: most; plus grand part: by majority;
soutenir: to support; captiole: an anagram of the word "capitol" or Capitol
Hill; point: point, mark; pourra ( pourrir ) : to become rotten, decay;
maintenir: to uphold, defend.

One dubious president shall not reign long
The majority of population shall give him support
But Capitol Hill shall not give high mark of approval
Such a great chair shall be upheld from decay

COMMENT: This president shall be impeached by Congress even he gains a
majority of approval from his people. The English word " chair" indicates
that this event shall occur in an English-speaking country. And the word
"Capitol" clearly indicates US Congress.


(Mon Aug 04 1997 04:18)
for Cheech
Oh man, ya hit the wrong button. Sheesh.

(Mon Aug 04 1997 04:44)
Good mornin ALL....It's a beautiful sunrise but Gold is down .60 .....

(Mon Aug 04 1997 05:46)
Asian stocks mostly down...ditto Europe,led by Dax down 76 ( 1.5% ) ,on fears of a rate increase....U.S.Dollar continues strong in European trading....
UPS on strike could be a sign of the increasingly tight labor market in the USA....

(Mon Aug 04 1997 05:52)
TED: Sunrise already in the Northland? Nothing here yet. Where did you get the numbers? Yahoo, EBN, Bloomberg all have zeroes for me. I guess they usually receive them via UPS, what with the strike and all, no numbers today.

(Mon Aug 04 1997 06:25)
He's ba-ack.

(Mon Aug 04 1997 06:40)
@Natal Day
Donald: Got my info from CNBC....Dax now down 84 and London Gold up a nickle...Wonder why EBN+ABN are blank???....

(Mon Aug 04 1997 06:59)
@Natal Day
It appears the peace process is unraveling in Israel....How surprising!
BBL dudes.....

(Mon Aug 04 1997 07:26)
TED: Happy Birthday! My youngest will be 36 tomorrow. I have EBN & Yahoo up now. Joburg Index up .57%

(Mon Aug 04 1997 08:05)
Joke of the Morn
Morning Ted and if it is your birthday, happy birthday you old duffer and may you continue to having these notches on your belt. I read an interest article this weekend in Time about the government's contingency plan when the stock market crashes. Sounds to me like they know something about what is going to happen. They can't fool the folks on this site though. Here's a little story for the morning.

A priest and a rabbi found themselves sharing a compartment on a
train. After a while, the priest put down his book and opened a
conversation by saying, "I know that, in your religion, you're not
supposed to eat pork... but have you really never even tasted it?"

The rabbi closed his newspaper and responded, "I must tell you the
truth. Yes I have, on the odd occasion. "

The rabbi had his turn of interrogation. He asked, "I know that in
your religion, you're supposed to be celibate... but... "

The priest interjected, "Yes, I know what you are going to ask, and
yes, I have succumbed to temptation once or twice. "

The two resumed their reading. There was silence for a while.

Then the rabbi peeked around his newspaper and said, "Better than
pork, isn't it?!"

(Mon Aug 04 1997 08:18)
@Taken to task

DONALD : Although you have taken me to task over the inflation/deflation issue, I still see some logical flaws in your argument. Your 11:38 post described how people perceive inflation in their daily lives, or put another way, how people perceive the results of inflation. You then suggest converting everything to ounces of gold to determine the real story.

Measuring inflation by looking at changes in the purchasing power of gold is misleading because :
a ) Since 1968, the purchasing power of gold has remained relatively constant
b ) Between 1934 and 1968, the purchasing power of gold reduced hand in hand with the purchasing power of the currency to which it was fixed
Therefore, from the point of view of gold, pre-1968 was a long period of inflation and post 1968 we have had zero inflation.

Inflation/deflation can only be measured in terms of the official currency. Since the official currency of the US was linked to gold until 1968 ( officially until 1971 ) , then gold could legitimately be used pre-1968 in measurements of inflation. Post 1968, it cannot be used . For example, assume you had a salary of $20,000 per year in Feb 1996, with the gold price at $410. In terms of gold your salary was therefore 48.8 ounces. Today your salary is unchanged in terms of dollars, but it is now equivalent to 61.5 ounces of gold. In terms of gold you have had a 26% pay rise and yet you can afford less than you could 1.5 years ago. This would seem to indicate massive inflation, which certainly does not reflect reality.

Like the price of all tangible assets which remain in demand the price of gold, as measured in terms of a national currency, will inevitably reflect the results of the increasing quantity of that national currency. This is inflation.

Cheers, Milhouse

George Cole
(Mon Aug 04 1997 08:19)
stock market
To All; The key to the gold market is the U.S. stock market. Once the stock bear is on earnest ( defined as a drop of more than 10% in the Dow ) a huge rise in the gold price will follow very shortly.

Once the stock bubble starts to implode and financial professionals recognize the game is over, the Fed will be faced with two very unpalatable choices, either one of which would be very bullish for gold.

1 ) They can try to contain serious damage to the market, economy, and banking system by aggressively cutting rates. But this would tank the dollar.

2 ) They can follow a dollar first policy and cut rates just slightly or not at all. But this course risks a huge meltdown in stock prices, a serious recession, and grave dangers to the banking system. Also very bullish for gold.

Given the extremely dire consequences to the system of a real bear market on Wall Street, frantic efforts can be expected to contain any correction at the 10% level. This probably will involve massive S&P 500 future purchases by the Fed and/or Treasury through Wall Street surrogates such as Goldman Sachs. These efforts may or may not succeed. But if they fail and the market does drop more than 10% from its peak, look for another 10-15% decline in a matter of days accompanied by an explosion in the gold price.

(Mon Aug 04 1997 08:22)

STEVE PUETZ : Thanks for the full explanation on your gold/silver ratio comments. I agree that if both metals experience similar monetary demand then the ratio would primarily be determined by relative rarity.

BTW, after reading your 3/8 22:20 post I now believe that Leonard Cohen is an optimist.

Cheers, Milhouse

Mike Sheller
(Mon Aug 04 1997 08:35)
how old are you now? how old are you now?
TED: Is it really your B'day? If so - a very happy n' healthy one ( stay off the water ) . What year were you born? I'll run a scope out on you. I'd like to see what you look like "up there." You don't have to answer that.

(Mon Aug 04 1997 08:35)
TSE closed today.

Mike Sheller
(Mon Aug 04 1997 08:37)
que hora, Teodoro?
TED: Oh yes, the time of birth and location would be appreciated for utmost accuracy.

(Mon Aug 04 1997 09:09)
EBN has 324.05 down .70 but up from 323 area, silver has poked its nose over 4.50 again, now 4.51 up 3 cents. HIHO Silver Away.

Bob A
(Mon Aug 04 1997 09:13)
Anyone following PDLCF, why isn't it moving up? I'm aware of SWC and its pblm's but don't follow PDLCF.

(Mon Aug 04 1997 09:16)
GEORGE COLE: In general I agree with the points you just made. The exceptions would be that I don't think a 10% drop will do it. This buy on the dip crown needs much more than 10% to learn their new lesson. I say it will take on the order of 20%. The other factor is going to be the T-Bond market. Foreigners will hit the exit ramps, the Fed will have its hands full there. I think that will give them all they can handle and they are less likely to tamper with stocks if I am correct about that.

(Mon Aug 04 1997 09:26)

PDLCF has sold forward all of this years palladium production at 160. They assured me that this was a very good price and that they were very pleased with the people ( I believe down the road in greenwich, conn ) who run their hedging.

Its always a great enlightenment to speak with the people on the other side of your trade.

Bob A
(Mon Aug 04 1997 09:30)
to D. A.
Thanks, dummies just like SWC. Maybe both managements went to the same school.

(Mon Aug 04 1997 09:34)
FWIW column. I had a conversation with a friend recently. The topic was what to do with a retirement account position in the market. In order to seek some safety, about half of the invested funds were put in to a bond fund ( !!! ) . I asked a few questions. One was, do you expect interest rates to fall? My friend returned an unsure look to me. I said if interest rates go down, your bond fund will make you money, else you will lose money! A surprised look was returned again along with, "How can you lose money on bonds?" ( Does ANYONE remember 1994? ) After a long discussion, I said put your retirement money in to a money market fund that invests in T-Bills. The reason for all of this? "There will be a great buying opportunity when the market pulls back..." My friend wants to be ready for it. And so it goes....

I asked my friend for thoughts on inflation and currency outlooks. The reply? Inflation doesn't exist because the government says so, and what was that about currencies? And so it goes....

I wonder, who is getting ready for whom??????

(Mon Aug 04 1997 09:41)
THE RED BARON (Part - 2)
Central Bank Gold Reserves Data is this weeks theme with startling revelations about the Feds not too profitable operations. Big income from Gold Call sales:

(Mon Aug 04 1997 09:46)
To StradMaster
Welcome back ...
About time you did some "honest" work for a change!
Talk Later


(Mon Aug 04 1997 09:46)
In light of SILVERs price rise, its relevant to read Silver Stocks, there aint too many. Reviews Pan Am Silver, Silver Standard, Intl Avino, United Kino & Sunshine, others:

(Mon Aug 04 1997 09:49)

The PM fix in london for Pa was 239. Folks are a little unsure as to what is going on because the Russians have been delivering some metal. Perhaps they are delivering their metal to Tiger fund. This would not do much to alleviate shortages.


Typically in short squeezes there is rampant demand for the physical which drives backwardation to obscene levels. The first go round in Pa we had one month backwardation on the order of $50 /ounce. The bid/ask spreads were so absurd that it is hard to put a real number on it. The current backwardation is around $15 for September delivery. The very high backwardation levels induce holders to lend metal into the market. This lending of metal can be enough to break the squeeze. If the squeeze was 'artificially' produced the squeezers may be forced liquidate. The current level of backwardation is not enough to get people to loan large amounts of metal. The volatility is so high that your $15 'profit' could get wiped out in an afternoon.

My working assumption is that we will see another surge in backwardation. This implies that the spot market still has a ways to go.

(Mon Aug 04 1997 10:10)
Depression - A Leading Indicator
Who Cares?: Many thx for sharing the insightful & historical analogy of the Intel/Microsoft to late 19th century Railroad industry's rate of diminishing returns. An astute observation.

(Mon Aug 04 1997 10:16)
SWC "on the move"
BobA...well, finally, SWC starting to move ... up almost $1 toay. About time, given that Pa and Pl have been limit up every day ( almost ) for two weeks!! Sure they forward sold...but they have a lot in the ground too!!

(Mon Aug 04 1997 10:29)
The sister white metals are maximum up again. Historically, they have been leading indicators to GOLD. RE-read TWO DOWN, TWO TO GO for future gold action - by Ted Butler:

(Mon Aug 04 1997 10:30)
MILHOUSE: Ref your 8:18. You must remember that the CPI figures do not include taxes. Further, recent adjustments use something called an imputed rent figure to account for housing that I do not fully understand. During the particular 18 month period you selected, the town I live in has had a 14% increase in property taxes. In addition to that a new tax jurisdiction was created for properties on the beach. That amounts to a 10% surtax. Thus my property taxes increased 15.4%. During the 1988-1992 period there was a property slump. Prices have increased considerably during the past 18 months but I can not quote a figure as I have only anecdotal evidence. I would not use the word massive to describe these changes but they are certainly not reflected in the CPI index. Obviously the figures change from area to area. Throughout this Geographic Statistical Area there have been thousands of layoff and downsizings. Aetna Insurance, 4000, Travelers Insurance 1200, General Dynamics 20,000? United Technologies 4000? The impact has been enourmous. Don't hold me to the exact figures but you get the idea. Rare indeed is the family who has not has a salary cut. Other changes include reduced healthcare benefits, pension changes and so forth. What better standard than gold can you find to measure them? Gold performs the function honestly.

(Mon Aug 04 1997 10:37)
Meltdown in Europe?
Has anyone looked at the European stock markets today? Almost everone is down nearly 2%...whatzup?

George S. Cole
(Mon Aug 04 1997 10:38)
stock market and gold
DONALD: The public may not start getting out in mass once the Dow drops more than 10%, but the professionals and pension funds will. The word has been out for quite some time that the powers that be will not "allow' the market to drop more than 10%. But once this covenant is no longer operative for whatever reason, the pros will be getting out in a hurry.

Once the pros see the Dow can drop more than 10%, the next question will be -- if they are losing control of stocks, then might gold be the next market to break free? Once the establishment starts to lose control of a major market, a huge gold bull will follow very quickly, just as day follows night.

Bob A
(Mon Aug 04 1997 10:43)
to BillD.
I agree, lotsa reserves, they are covered on that point. With any luck in the near term they might get production up. I think any positive news by them will greatly benefit the stk. quickly.

(Mon Aug 04 1997 10:47)
@ Even the gardener is shorting gold!
Oldman, Your 14.31 posting refers. My gardener mentioned last week that his brokers 'tip of the month' was to go short on a couple of gold contracts. This same guy couldn't shorten a piece of string with a sharp knife. Could be that if I am not paying him too much now to mow the lawn, I soon will be.
I am feeling seriously unloved. Instead of drilling the cr*p out of the back blocks of East Africa in search of gold. I should stay home and cut my own grass.

George Cole
(Mon Aug 04 1997 10:48)
gold stocks
Gold stocks again holding up VERY WELL despite a $1 drop in bullion. Perhaps gold stock investors are telling us that bullion prices have been pushed below equilibrium by huge speculative short selling, and that this situation will not last much longer.

(Mon Aug 04 1997 10:52)
panda, who is getting ready for whom indeed. I never bought the line that your tax rates will be lower when the 401k is withdrawn, a line even the promoters are bacing away from recently. Though I participate ( who could turn down 50-60% Co. contribution? ) in 401k I seriously doubt the government will be able to keep their fingers out of that tempting pie. Personally I hope to exit just before they go in with both hands and in this respect I am hoping that gov't moves slower than markets. I get similar reactions from other boomers except for those who work in financial area. Gen-x on the other hand is heavily playing the market, many short term traders. Who was it that said when your barber and shoeshine boy start giving you tips its time to get out of the market?
Participation here is phenomenal for a financially conservative area.

(Mon Aug 04 1997 10:53)
Bob A/BillD: Re, SWC. Hopefully all the negative news is out as well.

D.A.: Thanks for the expansion on backwardation.

(Mon Aug 04 1997 11:03)
GEORGE COLE: This is one of those times that I hope you are right and I am wrong! Let's get on with it. Are you old enough to remember movie serials? Waiting week after week to see how it ends, thinking about the plot all week waiting for Saturday only to get another tease. We have to call this the "Perils of Pauline Dow"

(Mon Aug 04 1997 11:11)
panda: I meant to say that from other boomers I get incredulous looks, similar reactions as you mentioned ( stocks only go up don't they? ) Those that work in financial areas in Co. are knowlegeable enough to be worried/cautious, but still fully invested. Some Gen-x are buying gold juniors, metals lately, but other mostly short tem equities. A year ago I was virtually alone in market at work except for investment clubs but now I can strike up a conversation about equities with about 75% or better. Highest level of involvement I have seen here in 16 years I have been with company.

(Mon Aug 04 1997 11:16)
Gold-Does anyone notice a foul smell ?Somebody get a shovel and bury it.In on Friday out on Monday.Happy Trails

(Mon Aug 04 1997 11:43)
BillD, BobA, Earl,
With SWC and PDLCF having sold forward, are there any other PA or PL producers in North America worth considering. Or are these 2 companies still the best bet? Thanks.

Bob A
(Mon Aug 04 1997 11:52)
to JAN
SWC is the only one I follow, I'll bet some large mines have both as a by-prod. I don't know who they are. There are a couple in S. A. and again I don't follow them.

Steve - Perth
(Mon Aug 04 1997 11:53)
Tis true..the main game is protecting Treasury Bonds. Who cares about the
stock market. There is a lot of old money ( & profit ) in Bonds. But a lot
of money was lost during the depression in Bonds, so I am told.
Re: Clam Chowder. Wife & I tried it for the first time in Michigan.
Beautiful stuff. To heck with the cholesterol!!

Steve - Perth
(Mon Aug 04 1997 12:06)
More high economics from Sydney journo's re: Thai Baht collapse

Steve - Perth
(Mon Aug 04 1997 12:18)
Australia's Peter Costello is acheiving low inflation at the cost of
more unemployed. So much for the boom!!

(Mon Aug 04 1997 12:23)
RSA Platinum
Jan - The two best platinum mines in S. Africa are Rustenburg ( RPATY ) and Impala ( IMPAY ) . You can buy ADR's in both. I have requested some info from both companies. I'll post some info when I get it. Perhaps John Disney could help with some of the fundamentals. I own SWC, and am holding it, but am disappointed with their hedging.

Steve - Perth
(Mon Aug 04 1997 12:31)
PANDA: Check out the strong one day upward movement in the $TYX. Quite
extraordinary compared to the rest of the chart. Dow Utilities index starting to level out again also.$TYX&TABLES=CHART_EXTEND&SOURCE=core/dbc

(Mon Aug 04 1997 12:34)
Roebear -- I find it amazing that so many are afraid of the stock market, yet are fully invested in it. Is this the proverbial, "Climbing the wall of worry?" The problem that I have with most of these people, is that they have never suffered a loss! Sure, there have been declines, but the, "Market always came back!" Compare that experience to those involved in trading or trading the precious metal stocks/ precious metals. When the bear comes, none will believe it. It will be another buying opportunity, NOT. There are going to be a lot of pissed off people when the Bear finally arrives. Of course, the belief system or current paradigm, does not believe that a 'serious' decline will occur until investors start to reach the age of retirement. Did these people ever hear of 'exogenous events', or do they just ignore everything and only hear what they want to hear?

O.K., us gold bulls can be accused of that to. I think most gold bulls have a longer time horizon depending on the vehicle of choice. Clearly, futures traders and option traders have a much shorter time horizon than stock accumulators or physical buyers. That being said, I believe there in lies the reason for the 'conflicts' that arise at this site. I find that both sides are, or will be correct. It's just the timing that no one agrees on . :- ) ) None the less, the differing view points are invaluable! I hope all stick to their guns and present your cases accordingly! It's a good thing that all cafeteria utensils must be returned! :- ) )

(Mon Aug 04 1997 12:41)
Steve - Perth -- Here's the last couple of days for the Long Bond.

(Mon Aug 04 1997 12:42)
Well-known Analyst cites potpourri of currency comments from world-acclaimed sources. Dines also says those blindly bullish on stocks are like the Italian proverb: He who knows nothing, doubts nothing.:

Steve - Perth
(Mon Aug 04 1997 12:42)
Quote of the Week: "when you're on the edge of the Empire State Building, whether you fall or not, would be a bit irresponsible not to be somewhat cautious."

Market Monitor: Stan Weinstein - on Nightly Business Report, 1st August

PAUL KANGAS: My guest market monitor this week is Stan Weinstein, the Editor and Publisher of the widely followed "Professional Tape Reader Market Letter". Welcome back to NIGHTLY BUSINESS REPORT, Stan.

pleasure, Paul.

KANGAS: Let's have a quick review of what your thoughts are on this wide swinging market today. The Dow off as much as- 120 points. And it comes back, cuts the loss to only 28 points at the final bell. What do you think's going on here?

WEINSTEIN: That shows a couple things, Paul. Number one how resilient the market is. They still want to buy the corrections and buy the dips. The second thing, I've been talking in recent weeks about, yes the market's likely to correct near term and I still think it will, but I've also said
that a lot of secondary stocks and under $25 stocks will do very well even throughout a correction. We saw that today. A lot of them were up, even though the market was down 120, and our AMEX unrated average was

actually up during the day, while the Dow was down 120 points. I think that's where you're going to start to see some good relative strength.

KANGAS: And the NASDAQ Composite Index actually closed with a half point gain, which is at a record high.

WEINSTEIN: Very interesting.

KANGAS: Yes, so you think the secondary issues are going to become more popular now?

WEINSTEIN: Absolutely. I think they're going to take every wall flower that hasn't danced and spin them on the floor before this game is over.

KANGAS: Question. You're a technical analyst, and most of that type of analysis, in large measure, is based on patterns that have been developed over the years. This bull market has broken so many of those precedents, has it rendered technical analysis useless?

WEINSTEIN: I don't think at all. In fact, in this kind of volatile market, I think it's even more important, Paul. You see how many stocks which have been on our danger list, like an Eastman Kodak ( NYSE:EK ) , Columbia Healthcare ( NYSE:COL ) , have gotten bombed even while the Dow has set these new highs. And I think technical analysis is more important than ever. One other quick thought, nobody said, "oh, is fundamental analysis useless even though the supposedly overvalue stocks are 20 and 30 P/E's, go to 40 and 50 P/E's, a bit of prejudice.

KANGAS: Right. Well, you know all in all, Stan, you've been kind of a cautious bull. I mean when the Dow was like 4500, you weren't saying "8000, 9000 Dow." And some of the time, you got out of issues too quickly. For instance, the last time you were with us on March 14, you said "sell the bank stocks," which you had recommended the previous visit and had nice big profits. However, Bank America ( NYSE:BAC ) , Bank of Boston ( NYSE:BKB ) , NationsBank ( NYSE:NB ) are all much higher now than they were on March 14.

WEINSTEIN: Well a couple of quick thoughts to that, Paul. Number one, some like a Chase Manhattan Bank ( NYSE:CNB ) dropped from 110 to 85 and now it's back to 110. So I think the money can be used elsewhere. You can lower your risk. So that's one thought. I think that it's important here that you rotate and go to things that are first breaking out a basis and keep your risk down. The other thing I think when you're on the edge of the Empire State Building, whether you fall or not, would be a bit irresponsible not to be somewhat cautious.

KANGAS: Okay. I will give you a last March 14, the Dow was at 69.35 and you said "we're going to see a correction soon," and in less than a month, it was down 458 points. Then you said buy. So you're right on that. You also recommended Costco ( NASDAQ:COST ) , Sunbeam ( NYSE:SOC ) , United Airlines ( NYSE:UAL ) and Alumax ( NYSE:AMX ) , all of which have done
well since March. But you gave us Ann Taylor ( NYSE:ANN ) , which hadn't done well. What do we do with that?

WEINSTEIN: Ann Taylor disappointed, sell it out for a small loss. The others look good, although you can do partial profit taking. The others still look good in the long term.

KANGAS: Additions to your buy list.

WEINSTEIN: Well there are a lot of things. But I think you're going to start to see a lot of underpriced stocks, under 25 do well. Something like Bethlehem Steel ( NYSE:BS ) , I think that's first break out of a base looks interesting. I also like Dime Bancorp ( NYSE:DME ) . I like JRJR JR
Cigar ( NASDAQ:JRJR ) looks interesting.

Something like Sapians International ( NASDAQ:SPNSF ) , symbol SPNSF, a cheap stock from here back to 5 1/2, it looks interesting. And also Egghead ( NASDAQ:EGGS ) as it pulls back to 5 1/2 support. Those are the kind of stocks that I think are going to give a whirl here.

KANGAS: Okay. What about the bond market here?

WEINSTEIN: Bond market after hitting an important bottom in April at 106, and the bond contract had a heck of a rally up to over 116. Short term already for a correction. But I think it's still in decent shape longer term.

KANGAS: Didn't recover at all today.

WEINSTEIN: No, I think we're ready for a correction. We had a parabolic move bonds, we deserve a correction.

KANGAS: All right. What about gold? Last time you said gold looked like it was bottoming out somewhere around 339, it's gone a lot lower than that. Although you did say don't buy the stocks yet back in March.

WEINSTEIN: Absolutely. I, I'm still saying the same thing. You have that nice bounce from 339 to 370, then you broke 339 and now it's 325. It's even worse. I didn't want you to buy it then, I don't want you to buy it now.

KANGAS: All right, now last time you said you should sell some of the high techs like Ascend ( NASDAQ:ASND ) , which is lower, Remedy ( NASDAQ:RMDY ) , Cadence ( NYSE:CDN ) , which are higher. What do we do now, very quickly?

WEINSTEIN: Well, it's a very, very mixed group. Some I would be buying on weakness. Others like those I would still stay away from.

KANGAS: Okay, so it's, it really has to be sorted out individually?

WEINSTEIN: This is where the technicals can help you.

KANGAS: Okay. Good point. Stan, thanks very much.

WEINSTEIN: Always a pleasure.

KANGAS: My guest market monitor, Stan Weinstein, the "Professional Tape Reader."

Nightly Business Report transcripts are available on-line post-broadcast. The program is transcribed by FDCH. Updates may be posted at a later date.

The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc., Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice.

( c ) 1997 Community Television Foundation of South Florida, Inc.

Steve - Perth
(Mon Aug 04 1997 12:50)
PANDA: Thanks for ldtyx chart. V.Good. Must chuck it in now, & hit the sack. Got a big couple of days ahead of me. Seems my diary is getting fuller by the moment. And remember, do not soften to the hepc*ts of the net!!!

(Mon Aug 04 1997 12:51)
The Analysis "Platinum: The Rich Man's Gold" is a must read in view of recent soaring values of the teo white metals:

(Mon Aug 04 1997 13:01)
Historically, when Platinum boasted a premium of $100 over gold ( now greater than $131 ) , it heralded a subsequent GOLD rally. Read RJ's apropos charts & comments: RJ Platinum Factor:

(Mon Aug 04 1997 13:11)
Pl and Pa Infor Vronsky's report below and

Good info on the dynamics of Pl and Pa ( and SWC ) !!

(Mon Aug 04 1997 13:23)
Serials @ Saturday
Donald @ 11:03 With great fondness, I remember the Serials. I also
wish that George S. Cole is right.

Very much appreciate your posts Donald, considerable amounts of fog, has
been cleared, due, to your informative and clear posts ( re: Deflation )

No, I am not as old as you are. : ) : ) : ) Take care.

Who Cares?
(Mon Aug 04 1997 13:31)
Who Cares?

And why would it be important to differentiate between a "free
market" and something that is not?

Let's ask Ravi Batra, James Davidson, Robert Pretcher, and
James Grant, who all based their scenarios and assumptions upon
the false foundation of a "free market".

Here's a book I picked up in Pittsburgh in 1992 at a used
bookstore. It was originally published in 1986 -

"Beyond Our Means" by Alfred L. Malabre, Jr., economics editor
for The Wall Street Journal.

I highly recommend it for those convinced of an impending meltdown.
Malabre has been more correct than any of the preceding prophets,
although I believe their reasoning was correct.

another market opinion
(Mon Aug 04 1997 13:37)
@follow at your own risk


By Alvin H. Danenberg, DDS, CFP


By Alvin H. Danenberg, DDS, CFP

Excerpts from 8/1/97


A top in stock prices and a bottom in gold prices may be forming.

Peter Mauthe, the editor of "Core Commentary" and whose company manages over $160 million, has had an outstanding record of predicting the current strength in the stock market and in the weakness in the gold market. His most recent warning, however, is that the stock market rally will fizzle by August 15th and that the stock market could possibly give back all of its 1997 gains by the end of this year. He also sees renewed strength developing in the gold mining issues.

In a recent article in "USA Today", the U.S. is identified as the second largest producer of gold next to South Africa. And, the area with the largest production in the U.S. is Nevada. The article states that the junior mining companies in Nevada are finding the gold through new technology, and the major gold mining companies are then coming in to bring that gold to the marketplace.

(Mon Aug 04 1997 14:00)
Steve-Perth: Re bonds in the depression. Depends on when they were bought. My grandfather bought ny central rairoad bonds in 1933 and lived like a king until the late 1940's. Very similar profile to buying them in 1982 and holding until now.

(Mon Aug 04 1997 14:13)
not ny central bondz of course in 1982...LOL! had to go with us treasuries then...

(Mon Aug 04 1997 14:16)
@Whats Happening ?
Whats happening with Gold? Platinum and paladium soaring, silver has been up nicely and Gold remains in the trenches. Is the Gold market manipulation really this efficient or is it something else?
Im beggining to wonder here ..... Can it be really this bad, and lets face it, this is not a pretty Gold market.

(Mon Aug 04 1997 14:25)
MoreGold I agree what is going on, PL,PA,Silver going up and gold in the doldrums? Can it be that only Gold has the threat of CB sales hanging over its head. Or is it massive shorting gold by every garderner in the world? Some of those wiser and more experienced in the metal markets, is this 3 out of 4 price run up unusual and can the white metal party go on without gold? Will gold drag them down? Can they drag gold up? BTW thanks to all for continuing the inflation/deflation discussion, I am beginning to see the light, would that gold did.

(Mon Aug 04 1997 14:26)
@ 1,2,3,4:
Does anyone else feel that the markets are marching in place, waiting for the actual signing of the budget agreement. Also, remember, he has the line-item veto now!!

(Mon Aug 04 1997 14:27)
Now that's entertainment!!
The Great Carney will now use his psychic powers to answer the riddle in the envelope:

1 ) Non-regulated markets.
2 ) All competitive markets.
3 ) All countries that outlaw monopolies--especially those evil patent privileged companies. We don't need no stinking R&D!!
4 ) Late night 7-11 store with sleepy attendant ( Ironically enough--SOME OPEN 24 HOURS!! )

And the answer is.....


(Mon Aug 04 1997 14:28)
MORE GOLD: What is happening here? I used to think the markets really could not be manipulated if there was enough volume. Now, with gold, I am not so sure. There are some very big players. So, what is going on. I believe the CB's are using every derivative available to control the market so their paper can survive for a bit longer. We hang by a thread.
What can we do? I am starting to think those who recommend hold close to your belt enough gold bullion coins, or bars, or whatever of a gold nature may have something. We are looked upon as being nutters. Maybe so. But, better to be prepared and hope for the best, and what have we lost if the beat goes on and the market goes up forever. Most of us have some of the action and diversification will save us???? We hope.

(Mon Aug 04 1997 14:30)
1 Dec put @ 300
Why I got a gold put:

Gold looks like it will fall out of bed, like December and June ( although it looks stronger to me ) .

Fade the fundamentals for the short term. This is an extreme time so things should be extreme:
If DOW is insanely high - 90% of companies are over valued.
Gold should be insanely low - 90% of companies should produce above cost.

Say this is a money war and I wanted Au prices down. First, I would attack with minimum effort using propaganda and timing. When and how people catch on would shape my next move. Can I do a moderate attack next or do I have to go all out?

If the market drops like we anticipate ( I truly hope it is gentile, I know what it feels like ) , the masses will be busy meeting margin ( selling ["get me out of everything!!"] ) , probably in a stupor. Then they can look for what is not dropping.

(Mon Aug 04 1997 14:35)
@ Routing for El Nino:
CRB Cash is up 1.50 approaching 245. Can 250 be next step. Come on El Nino. Weather patterns seem to be effected this summer on the left coast. Cooler than normal.

(Mon Aug 04 1997 14:35)
IMF says US needs to take precautions against inflation.

(Mon Aug 04 1997 14:42)
Federal Reserve @ World Leader
The first world war changed the status of the United States from that of
debtor nation to the position of the world's greatest creditor nation, a
title formerly occupied by England.

Since debt is money, according to the Governor Marriner Eccles of the
Federal Reserve Board, this also made the USofA the richest nation of the
world. The war also caused the removal of the headquarters of the world's
*acceptance* market from London to New York, and Paul Warburg became the
most powerful trade *acceptance* banker in the world.

The mainstay of the international financiers, however, remained the same.
The gold standard was still the basis of foreign exchange, and the small
group of internationals who owned the gold controlled the monetary
systems of the Western nations. Professor Gustav Cassel wrote in 1928:

"The American dollar, not the gold standard, is the world's monetary
standard. The American Federal Reserve Board has the power to determine
the purchasing power of the dollar by making changes in the rate of
discount, and thus controls the monetary standard of the world."

The matter of changing the discount rate, for instance, has never been
satisfactorily explained. Inquiry at the Federal Reserve Board in
Washington elicited the reply that "the condition of the money market is
the prime consideration behind changes in the rate" Since the money
market is in New York, it takes no imagination to deduce that New York
bankers may be interested in changes of the rate and often attempt to
influence it.
Norman Lombard, in the periodical "World's Work" writes that:

"In their consideration and disposal of proposed changes of policy, the
Federal Reserve Board should follow the procedure and ethics observed by
our *court of law*
Suggestions that there should be a change of rate or that the Reserve
Banks should buy or sell securities may come from anyone and with no
formality or written argument.
The suggestion may be made to a Governor or Director of the Federal
Reserve System over the telephone or at his club over the luncheon table,
or it may be made in the course of a casual call on a member of the
Federal Reserve Board.
The interests of the one proposing the change need not be revealed, and
his name and any suggestions he makes are usually kept *secret*
If it concerns the matter of open market operations, *the public* has no
*inkling* of the decision until the regular weekly statement appears,
showing changes in the holdings of the Federal Reserve Banks.
Meanwhile, there is no public discussion, there is no statement of the
reasons for the decision, or of the names of those opposing or
favoring it"

(Mon Aug 04 1997 15:35)
From Data Broadcasting Corp.


(Mon Aug 04 1997 15:38)
Who Cares?: I certainly agree with your post re Alfred Malabre Jr. He was by far the best economist the WSJ ever had with great forsight. Maybe your wife is wrong? ;- )

(Mon Aug 04 1997 15:42)
Big Dow/SPX divergence again. Dow +3.72 SPX +4.15

(Mon Aug 04 1997 15:43)
@ Wake Up:
Paladium up the limit again. Platinum up about $17.00. And gold... will someone give that pile of gold a good kick and wake it up.!!! ( ^.^ )

(Mon Aug 04 1997 15:46)
More buyers than sellers today.

(Mon Aug 04 1997 15:49)
Byron -- See my 15:35. :- ) And yes, the SWC chart is 'fresh'.

(Mon Aug 04 1997 15:51)
Palladium news;

(Mon Aug 04 1997 15:55)
Fellow posters: it seems some are fighting the tape. Go with the flow.
The Dow is heading up until it hits the stratosphere at which time no air. The best minds are out of the market some have been out for three
years. I may have to find another method of employment. I figured the
undervalued stocks couldn't go down further. They did. I think I'll chuck
gold and diversify into other segments. ( talk about a contary indicator )

(Mon Aug 04 1997 16:04)
I think the time has come to seriously ask the question, "Are we at the point where all the money is in, and it is sloshing around from one group to another?"

(Mon Aug 04 1997 16:07)
Anyone: what is the dividend yield and market to book value of the Dow and S&P 500?

Re:Market valuations
(Mon Aug 04 1997 16:15)
Don't have a Barron's in front of me, but I believe you can find it in the back section with all of the financial statistics on the Market. If you don't have a newstand nearby you can check the public library.

(Mon Aug 04 1997 16:19)
PANDA: Can you enlighten me about Dow/SPX divergence?

(Mon Aug 04 1997 16:22)

So long as they ( world monetary authorities ) keep papering over global problems, major markets should continue higher in a vote of confidence for their masters.
But paper burns as will the souls of those sinners in hell.
One sees discontent, inroads are being made into the cultural fabric of lands who find this not acceptable.
Even here groups form, that the press castigates as fringe elements - but at whose behest?

(Mon Aug 04 1997 16:25)
In recent days several of you have been talking about the Fed and the suspicion they are influencing the gold market via options. I don't know much about that so I avoided the discussion. Could the IMF also be involved? They own $40 Billion worth per a reference I have here that does not mention the number of ounces.

(Mon Aug 04 1997 16:34)
JACK: Dow p/e ratio 21.9, Mkt to book 579.48%, Div Yield 1.58 all on Friday close.

(Mon Aug 04 1997 16:35)
ARK: regarding your 15:55, I personally think you're making a big mistake, but I can't say I really blame you. It's hard to resist. I wish you good luck.

(Mon Aug 04 1997 16:35)
According to IBD Monday edition ( which would be as of Fri. close ) Dividend yield is at 1.62% which is a five year ( or more? ) low and price to book is 5.56, the five year high being set 7-30-97 at 5.63

(Mon Aug 04 1997 16:37)
Donald, I like your paper better!

(Mon Aug 04 1997 16:43)
ROEBEAR: That is from Barron's. Did I get it wrong? Seems correct.

(Mon Aug 04 1997 16:44)
Acceptance @ Nothing = Something, thing
The National Bank Act of 1864, which was the determining fiancial
authority of the United States until November,1914, did not permit banks
to lend their credit. Consequently, the power of banks to creat money was
greatly limited. We did not have a bank of issue, that is, *a central
bank*, which could create money. To get a *central bank*, the bankers
caused money panic after money panic on the business people of the
United States, by shipping gold out of the country, creating a money
shortage, and then importing it back.
After we got our *central bank*, the *Federal Reserve System*, there was
no longer any need for a money panic, because the banks could create
money. However, the panic as an instrument of power over the business and
financial community was used again on two important occasions, in 1920,
caused the Agricultural Depression, because *state banks* and *trust
companies* had *refused* to join the Federal Reserve System, and in 1929,
causing the Great Depression, which centralized nearly all power in this
country in the hands of a few great *trusts*

A trade *acceptance* is a draft drawn by the seller of goods on the
purchaser, and accepted by the purchaser, with a time of expiration
stamped upon it. The use of trade *acceptances* in the wholesale market
supplies short-term, assured credit to carry goods in process of product-
ion, storage, transit, and marketing. It facilitates domestic and foreign
Seemingly, then, the bankers who wished to replace the open-book account
system with the trade *acceptance* system were *progressive* men who
wished to *help* American import-export trade. Much propaganda was issued
to that effect, but this was not really the story.

The open-book system, heretofore used entirely by American business
people, allowed a *discount for cash* The *acceptance* system discourages the use of cash, by allowing a *discount for credit*. The open-book
system also allowed much easier terms of payment, with liberal extensions
on the debt. The *acceptance* does not allow this, since it is a short-
term credit with the time-date stamped upon it. It is out of the sellers'
hands, and in the hands of a bank, usually an *acceptance* bank, which
does not allow any extention of time.

Thus, the adoption of *acceptances* by American businessmen during the
1920's greatly facilitated the domination and swallowing up of small
business into huge trusts, which accelerated the crash of 1929.

Trade *acceptances* had been used to some extent in the United States
before the Civil War. During that war, exigencies of trade had destroyed
the *acceptance* as a credit medium, and it had come back into favor in
this country, our people preferring the simplicity and generosity of the
open-book system.

Open-book accounts are single-name commercial paper, bearing only the
name of the debtor.
*Acceptances* are two-name paper, bearing the name of the debtor and the
creditor. Thus they became commodities to be bought and sold by banks.

To the creditor, under the open-book system, the debt is a liability. To
the *acceptance* bank holding an *acceptance*, the debt is an asset.

The men who set up *acceptance* banks in this country, under the leader-
ship of Paul Warburg, secured control of the billions of dollars of
credit existing as open accounts on the books of American businessmen.

Governor Marriner Eccles of the Federal Reserve Board stated before the
House Banking and Currency Committee that: " Debt is the basis for the
creation of money "

Large holders of trade *acceptances* got the use of billions of dollars
worth of credit-money, besides the rate of interest charged upon the
*acceptance* itself. It is obvious why Paul Warburg should have devoted
so much time, money, and energy to getting *acceptances* adopted by this
country's banking machinery.

On September 04, 1914, the National City Bank accepted the first time-
draft drawn on a national bank under provisions of the Federal Reserve
Act of 1913. This was the beginning of the end of the open-book account
system as an important factor in wholesale trade. Beverly Harris,
vice-president of the National City Bank of New York, issued a pamphlet
in 1915 stating that:
"Merchants using the open account system are usurping the functions of

In *The New York Times* on June 14.1920, Paul Warburg, Chairman of the
American *Acceptance* Council, said:
"Unless the Federal Reserve Board puts itself heart and soul behind the
untrammeled development of *acceptances* as a prime investment for banks
of the Federal Reserve Banks the future safe and sound development of the
system will be jeopardized."

They were out to get control of all credit in the United States, and they
got it, by means of the Federal Reserve System, the *acceptance* system,
and the lack of concern by the citizens.

Fortune Magazine, February 1950 pointed out that:
"Volume of *acceptances* declined from $1,732 million in 1929 to $209
million in 1940, because of the concentration of *acceptance* banking
in a few hands, and the Treasury's low-interest policy, which made
direct loans cheaper than *acceptance*. There has been a slight upturn
since the war, but it is often cheaper for large companies to finance
imports from their own coffers."

in other words, the "large companies" more accurately, the great trusts,
now have control of credit and have not needed *acceptances*

(Mon Aug 04 1997 16:48)
JACK, ROEBEAR: This is the same info for the S&P 500.
P/E Ratio 23.54, Div. Yield 1.63%, Mkt to book 482.10% Friday, Barron's

(Mon Aug 04 1997 16:51)
Thanks for the great swc chart. As for questions how about "Has the last sucker gotten on the USS DOW Titanic"? OR who will get to drink the bottle of Rothschild and toast the rest of us "RIP" as the last goldbug still extant in the Brave New World Paradigm? Where the H**l is an exogenous event when you need one! Are they like cops?

(Mon Aug 04 1997 16:56)
Long Platinum, Silver, short Gold.
D.J. @ 12:23
RSA - Impala ( IMPAY ) on strike today. You might want to hold off on this until the labor picture is more clear.

(Mon Aug 04 1997 16:57)
Watching the 21
Eldorado, I just want you to know that last night on the NBC news there was a story about the Eldorado mine in Alaska. Tourists can pan for gold and sell what they find right on the spot! Now, Eldorado, you are my favorite Kitco poster, I'm being very forward here. You have a way about you that reminds me of my great-uncle Harold Gathers who passed away in 1940. He was a very wise man with strong opinions and a sense of humor who influenced those around him without trying to. And while I am just being so crazy, Earl, you are my second-favorite! Good night all and I enjoy this site so much, so please keep up the good work.

(Mon Aug 04 1997 16:57)
Donald, my figures are from Investors Business Daily. IBD likes to do some things a bit different from WSJ/Barrons but I did not expect these figures to be different. In any case, I defer my figures to your figures any day of the week. Besides, beat me by a minute!; ) )

roger budgell
(Mon Aug 04 1997 16:59)
Donald,Byron,Richard Burke,Nick@aussi: Can anyone tell me a good book ,for a layman, Readers Digest level to read WRT the el nino. Apparently the 1980 el nino had quite an effect on the world wide weather. Interest rate were at 20%, Gold went to $850. Inflation obviously skyrocketted.

My 'e' is good so if someone would like to send me some info i would be greatly appreciatived.

Sincerely, Roger

(Mon Aug 04 1997 17:04)
WhoCares: Your 0108 post is fascinating. The one on COI ( cost of information ) and the similarity between the railroad industry in the 1890's and the information industry now. My grandfather worked in that industry ( railroads ) all this life and told me of the declines whehn I ws a child. Plus which I am a western US history buff and have seen the maps and railroad towns of the west in the 1880's and 1890's. You could literally go anywhere anytime on the railroad in those days. ( Sounds like the internet, eh? ) IPO's abounded and capital sloshed into the industry. Until the early 1890's...
The Dow transports have only recently surpassed their 1906 inflation-adjusrted levels. hmmmmm.

Tell us more!!!!!!!!!!

(Mon Aug 04 1997 17:06)
ROEBEAR: It would be better if the Dow headed south and gold headed north without an event. My reasoning would be that a those Dow geniuses, after careful and exaustive research, determined that gold had the better future at these prices. Fat chance!

(Mon Aug 04 1997 17:16)
Is something wrong with

(Mon Aug 04 1997 17:22)
ROGER BUDGELL: Yesterday there was a post by Steve-Perth who posted a site run by a Stan Deyo. I have this temp map that shows el nino. It takes a few minutes to load.

(Mon Aug 04 1997 17:23)
@Roger, Donald
Donald: Agreed
Roger: see this URL for some books on El Nino, have not read any yet.

(Mon Aug 04 1997 17:27)
Donald: Am I to be always a minute late and a nickel short? ( Judging by my trading - yes ) I believe we are beginning to look like bookends! I've got to go BBQ for a bunch of hungry teenagers, daughters birthday party, BBL : )

George Cole
(Mon Aug 04 1997 17:33)
low volume
Gold stock volume very low again. Until trading activity picks up a lot, there will be no upside breakout.

ARK: You could be right about a final gold shakeout. Gold's failure to follow the whites higher did provide advance warning of the early July drop and the yellow's failure to follow the whites up today could portend a rerun.

Two pieces of advice. Don't bet the family farm. And don't get too greedy if the price goes your way. Because we will be going a lot higher before long even if new lows are made first.

(Mon Aug 04 1997 17:38)
USA today chart
Lurker - Note that they just changed that chart from August delivery to December delivery ( for some reason ) . Speaking of market-to-book ( or price to book ( P/B ) , either way a statistic that is considered less important than it used to be due to corporate restructuring and stock repurchases muddling its significance ) , who would like to guess what the S&P P/B was in July 1982 ( it is now approx 4.8 ) . Ok times up. 0.98. Well, what was the highest it ever got before the 1982-present bull? I have no idea.

(Mon Aug 04 1997 17:39)
Hi Mike ( 8:35 ) Thanks for the thought but my reference to "Natal Day" is the name of the civic holiday today in CANADA....Am 47 for 26 more days!Just got in and looks like I didn't miss much in the Gold action but Palatinum+Palladium soared again....BBL...din...din..time...

(Mon Aug 04 1997 17:39)
Deflation as an outcome:
The world is in a unique position as we head into the bursting of our financial bubble. With the possible exception of the SF all currencies are fait. We have never commenced a world-wide economic depression with only fiat currencies. In my opinion the aftermath of the depression will also be unique, all currencies will go to zero value as will all other unbacked paper. Thus "monetary deflation" as an outcome or accompaniment of the depression, as the 1930s, where the dollar increased in value relative to most things, will not happen this time. The dollar will cease to exist at some point.

Prior to the dramatic events leading to the vaporization of the dollar, in my opinion, monetary inflation as a process is most probable. But it need not occur and monetary deflation is also possible. In either case at some point economic demand begins to fail and the depression begins. In my view the only assets to survive this series of events will be things, with gold and silver once again money.

This is the outcome I hope for. If we come out with a new fiat currency it will most likly be implemented by a totalitarian government. This new gov will need to keep most of us in line and as there will be no carrots left ... .

(Mon Aug 04 1997 17:44)
@Donald and Tort
Donald ( 7:26 ) ;Tort ( 8:05 ) So that's where the rumour started.....BBL!

(Mon Aug 04 1997 17:48)
DIV yILD & Price/Book
Donald & Roebear: merci boucoup, mon ami

(Mon Aug 04 1997 17:48)
Korean business cuts back.

Ronald Reagan
(Mon Aug 04 1997 17:57)
Why I am in gold, taken from of July 7 1997:

( First, the bad part: )

"The gold price fell below $325 an ounce on Friday, its lowest in 12 years, after news that the Australian central bank has sold a substantial potion of its gold reserve. The Reserve Bank of Australia contends that it has no need to retain 20% of its reserves in gold as a form of contingency. Estimations are that it currently costs central banks the world over $15B per annum in lost income when compared with returns possible in alternate interest-bearing investments. The aforementioned sale was viewed by investors as confirmation that central banks are easily tempted to sell their gold reserves in order to gain greater liquidity and access to instruments promising greater short term returns. Since gold's all time high of $850 on January 21/80, other alternative investments ( i.e. derivatives ) have taken its place to provide 'safe havens' against turbulent economies in the new global marketplace."

( continuing the same article, the good part: )

"Mind you, when it comes to 'nuts and bolts time' again ( and it will - it's only a matter of time - and more than likely ( barring any unforseen international catastrophe ) 'time' will be years, as opposed to months ) the rush will, naturally be to the conventional gold, if for no other reason than that it can be stashed away in sock and still retain its value."

(Mon Aug 04 1997 17:58)
Donald @16:19 -- 'Normally', ( whatever that means! ) the SPX ( S&P 500 cash index ) trades at about a twelve - fifteen to one ratio to the Dow point wise. So if the SPX goes up 1 point, the Dow would be expected to move somewhere between twelve and fifteen points in the same direction. The 'divergence' that I'm talking about is when the SPX goes up or down several points and the Dow goes in the opposite direction OR the 'normal' ratio between the two is broken. The only explanation that I think of ( I haven't looked in to it yet ) is the components of each index. The SPX index must have more than a few of the heavyweight tech issues in it, where as the Dow doesn't have those issues. As a result ( I think ) , when the tech are booming the SPX gets dragged up and the Dow is left behind. One conclusion that could be drawn from this is money flow. If there isn't enough money to buy all of your favorite toys... then you have make some choices. The interesting point is, that you don't have enough money to buy all of your favorite toys.

(Mon Aug 04 1997 18:00)
Problems at Korean brokerage houses.

(Mon Aug 04 1997 18:04)
Backwardation and Lending
D.A. Thank you for the continuing insightful reports. I am puzzled however by your recent comment that due to backwardation, more lending is coming into the market. Why is that, as I would think the opposite would occur.

(Mon Aug 04 1997 18:07)
PANDA: Thanks. I had noticed the closing prices were unusual but was not sure what it meant. I watch Compaq & Dell for signs of exuberance and they were very subdued today. A broken twig here, an overturned stone there, pretty soon you find the BIG BEAR in the forest.

(Mon Aug 04 1997 18:09)
to BW
I share your expectation, generally. Have you ever seen such a strong economy with people so nervous? Nobody seems to really believe in this thing. We are like children playing with the hose in the back yard when we know very well that whoever turned the water on is going to be in big trouble when Dad looks out the window. Having a good time, in a nervous kind of way. This is why I am in gold, and losing my shirt. Because this thing absolutely cannot last! I repeat, it cannot last! Continuing my metaphor, true economic prosperity would feel more like children playing in the rain in the back yard. I can't remember anything much more fun than that from my childhood.

I am not familiar with the term "fiat" currency, which I assume means paper money backed by something tangible, such as gold, silver, or the foreskins of Philistines.

(Mon Aug 04 1997 18:11)

--Updating throughout--

has announced the redenomination of the ruble on Jan. 1.
A statement issued by the presidential press service
said the decision to drop three zeros from the ruble has
been made because inflation has been brought under control.
Yeltsin said Russia now controls money circulation and
inflation. He said prices are stable and the country will
now carry out money reform.
The new ruble will drop three zeros, meaning the rate
of exchange will change from 5,800 rubles to 5.8 rubles to
the dollar.
The new bank notes will replace old rubles over 1998,
and the kopeck coins will also be reintroduced.
Yeltsin is stressing this will be a "calm" exchange
of old bank notes for new ones rather than a confiscatory
measure, as has been the case in the past.
He said, "We wish to avoid stress and problems. We will
calmly replace old money with new money without any

08/04/97 07:44:49

Copyright 1997 by Futures World News
All Rights Reserved.

(Mon Aug 04 1997 18:12)
RJ - Thanks for mentioning that. I knew about the strike and should have mentioned it myself. IMHO, with all the mines closing and threatening to close in S. Africa, I can't imagine that there is a shortage of eager labor. This could make it difficult for NUM to take a tough stance. Also, only the refinery is on strike. Impala's price really didn't get hit with news of the strike. On the other hand, neither RPATY and IMPAY have moved significantly with the price of platinum. Both relatively dead. Perhaps this indicates they have hedged as well. Do you ( or anyone else ) have any knowledge of this?

(Mon Aug 04 1997 18:14)
Gold as a Portfolio Diversifier
IMO, an economic analysis of the gold market clearly demonstrates that gold prices are determined by a number of factors. Mine production, fabrication demand, and the recovery of gold from scrap all influence prices. Much greater influence is exerted by trends in central bank sales. Most important, of all, are trends in investment demand.

Investors buy gold for any number of reasons. Some of the more important ones include gold's role as an inflation hedge, gold's usefulness as a currency hedge, as a commodity, and gold's role in portfolio diversification. I have previously posted my opinion on these former topics. I would like to now give my take on portfolio diversification.

The more assets each speculator places in a market, the greater his risk, and consequently the more likely the market will incur a greater degree of volatility. For example, if an investor places only 10% of his money in a market, he does not incur much risk and he is unlikely to withdraw his funds except for compelling circumstances. Thus the market is fairly stable. However, if he places 100%, or more if highly leveraged, his risk becomes enormous. And the greater such risk, the more anxious he will become to withdraw money. Thus, the market becomes more volatile because of it. And as more such speculators enter the market, the greater the market volatility and this in turn increases the inherent risk and volatility in the market, particularly if these speculators are on one side of a transaction.

This increase in volatility is currently being witnessed in the DOW and to some extent in the gold futures market. So what, you say, how does this trivia affect gold? As this volatility and risk increase in the general market, which it is likely to do, the greater the probability that an investor will be encouraged to seek a safer less volatile investment. And this is where gold and gold equities may enter the picture. One of golds traditional roles has been its use as a portfolio diversifier. And interest by investors in gold for this purpose, as mentioned, should increase with volatility in the DOW; particularly if gold equities can remain relatively stable in price as they have been for some time and gold fails to break.

A second related reason for portfolio diversification is to protect against a possible market correction. If the market corrects because of deflation, as pointed out by others on this forum, investing in low yielding bonds may not be attractive, particularly if there is a concern of repayment, nor will investment in dropping RE values. However, if financial assets fall faster than gold, gold will appear to be rising in price ( "Einstein's, aka Donald's, theory of financial relativity" ) and thus may make it attractive. If the market corrects because of inflation or currency fears, the outcome vis a vie gold is self-explanatory.

What I find encouraging to suggest that more investors may be beginning to value gold as a portfolio diversifier is the relative strength of the XAU; and, unlike before, money appears to be flowing into the majors when it appears the stock market is in danger of correcting.

Just some regenerated thoughts for consumption and comment.

(Mon Aug 04 1997 18:16)
2 -- Fiat money is, "Full faith and credit" money. There is no specie behind it! To be a little clearer, it's only paper backed by a promise to pay in paper. :- ) )

(Mon Aug 04 1997 18:17)
GUNRUNNER: Thanks for the compliment, but I regret to read of your decision not to post. I hope it is only temporary.

(Mon Aug 04 1997 18:18)
Brazil needs foreign money to finance defecit and avoid devaluation. ( Brazil stocks down 1.98% today )

(Mon Aug 04 1997 18:20)
A Note To RJ in Passing
RJ: I can relate to your trading and to your abode. You have a keen mind, quick wit and the courage and resolve of conviction, all of which I admire in a person and I have learned much from your posts I tried short-term trading but the stress, daily commitment and my personality mitigated against it, but I have empathy from where you are coming from. I used to live on my yawl docked at a private moor across the bay with a daily trip to Belboa ( sp ) on the ferry. I suppose things are different now, but in the evenings with a slight fog in the air, Belboa changed into a magical place.

(Mon Aug 04 1997 18:28)
No tax waivers or loan forgiveness for ailing Pakistan companies. ( stocks down 2.36% last night in Pakistan )

Hughes & Michalski
(Mon Aug 04 1997 18:29)
The root of all evil
Money itself is not a technology. Various technologies implement money and thus become a form of money, but these are not themselves money. Specie ( gold and silver ) , coins, book entries, paper bank notes, digital automation and smart cards all act as money, but no single one can lay claim to being money itself.

Even gold is not money itself, but rather its preeminent example. Gold is
not currently money in the US, for example. You can't take a Krugerrand
to your local Sears and buy a washing machine with it. Gold is also
useful for jewelry, dental work and circuit boards. Gold has value as
money only when people agree that it is money.

Money itself is a social fiction, like property, political parties,
governments, gender and marriage. As a specific example, a corporation
is a legal fiction. The socially fictive nature of money is key to
understanding its transfer. Social fictions are real, even though they
exist only in people's heads. When money moves across electronic
networks, no substance called money is in motion. What is in motion is
knowledge about rearrangements of money.

Money is ultimately a communications process. Any technology that
implements a conserved and transferable quantity is usable as money.
The physical properties of gold satisfy these two sufficient properties
of money; therefore, gold works as money. These sufficient properties
are also design criteria. Creating new forms of money involves two
steps: inventing a suitable technology, then persuading society to use it
as money.

(Mon Aug 04 1997 18:32)
Panda: Please email me the details of you data service and R/T software. I haven't had any data service from BMI since last Thurs. The irritation level is rising. .... Of course their phone system is inaccessible.

(Mon Aug 04 1997 18:43)
EARL: Do you suppose if you paid your bills that it would help ( :0 )

(Mon Aug 04 1997 19:00)
Granny: You silver tongued devil, you. Ya got m' glasses so steamed it's difficult to respond. Whew! Paroxysmal tachicardia, here we come. ....... Panda; I always knew there was something special about you but it took Granny to point it out. .... :- ) )

(Mon Aug 04 1997 19:05)
Vieserre: Pay the bill?? In today's world? Don't be foolish. :- ) They owe it to me. ..... Granny, back me up on that. Will you?

On the other hand, Thurs was the end of July. You don't think...??? Nah!

(Mon Aug 04 1997 19:08)

Junior Gold Stocks appear to be on a rebound as the VSE index starts to
recover. 2 back to back days of market strenght saw a lot of junior golds
put 10-20% increases on their values. GLS Global Assets, our Bolivian Gold
Play, closed this week at $2.70 up from last week's close of $2.15. As
investors start to reposition themselves, we hope to see Global continue
its upward momentum. GlS Global has recently announced that they have 75%
of a unique property 1 1/2 hours south of La Paz know as Cable Mountain. It
has been reported that the Cable Mountain claims contain 14 large quartz
veins on just 1 portion of the property and that many more untested quartz
outcroppings exist across the entire structure. GLS has also tied up two
more neighboring claims as it appears the Cable mountain structures run
deep into the adjoinig properties. A major trenching program across the
base of the first 14 veins will commence in a few weeks. Positive results
will ultimately lead to an immediate drilling program. The major question
that the world is asking is who and where will the next world class gold
discovery take place. Remember that the last 'true' world class discovery
came from Peru which was a 1 billion dollar find at Ariquipa. It is
felt by the mining community that the south american countries like Peru,
Bolivia and Chile will host many more world class discoveries. On August
9th 1997 the first personnel from GLS Global and Canadian Bolivian
Resources return to Bolivia to start the undertaking of exploring Cable

For more information,phone Thor Gauti IR person 1-800-792-3834 in Vancouver

(Mon Aug 04 1997 19:09)
Granny, Panda, and Eldo: My goodness what faux pas. Eldo is Granny's favorite. Not Panda. ....... But it should be Panda. ... :- ) )

(Mon Aug 04 1997 19:14)
@ The Public Library
Donald: Just discovered that Y.Auger's next update is scheduled to be August 9th. I assume he is on one of his frequent business road trips.

C.V. Compton Shaw
(Mon Aug 04 1997 19:21)
If the XAU rallies tomorrow and stays near it's high during the whole day, that would be extremely bullish short term; however, if the XAU rallies strongly then fades back to near it's opening level, that would be bearish. If there is little change in the range of the XAU tomorrow, that would be mildly bullish short term.

(Mon Aug 04 1997 19:23)
Venezuela: Go-ahead for gold mine project


By Raymond Colitt in Caracas

Placer Dome, the Canadian mining company, has pushed ahead with the
long-delayed development of one of Latin America's largest gold mines,
opening the way for a possible wave of international investment in
Venezuela's mining sector.

Placer Dome and its partner, CVG, the state industrial holding company,
have begun a $600m two-year development plan with construction work
at the Las Cristinas gold mine, 750km south-east of Caracas.

The Canadian company, which has a 70 per cent stake in Las Cristinas,
received an environmental permit and an important tax exemption on

Several other mining companies will also receive environmental permits this
week, a requirement that has held them up for years, according to Mr
Jorge Neher, a legal adviser to the industry.

The moves signal the government's determination to reduce red tape and
legal insecurity in the sector.

According to Mr Fred Drew, president of BHP Venezuela, up to $4bn
could pour into the mining sector in the short term. Mr Elas Nadim Ynaty,
president of the CVG, expects at least three big mining companies to begin
developing mines with 3m-6m ounces of gold reserves by 1998.

"We believe other serious, international investors will find opportunities
here to be part of what promises to be a fascinating growth story," said Mr
William Hayes, president of Placer Dome Latin America.

Las Cristinas will eventually account for 10 per cent of Placer Dome's
world output. The company expects to recover 80-85 per cent of the
mine's proven, recoverable gold reserves, recently increased to 11.8m
ounces, at a production cost of less than $200 per ounce. At a rate of
450,000 ounces of gold per year, the mine will produce for more than 20

The project had been further delayed by a rival claim to the rights of Las
Cristinas by Canadian mining company Crystallex.

The Venezuelan supreme court rejected the Crystallex claim to Las
Cristinas' gold rights on July 15 but agreed to review its claims to the
mine's copper deposits. Placer Dome and government officials are
confident, expecting a ruling in their favour within weeks.

Following a meeting with the head of the supreme court last week, Mr
John Willson, president of Placer Dome, said: "The risk is low enough for
us to go ahead with this project."

Mr Elas Nadim confirmed CVG's legal action against Crystallex: "Those
that dare to harm the image of Venezuela as a country able to attract
foreign investment will have to pay the consequences."

Placer Dome

Placer Dome

(Mon Aug 04 1997 19:27)
Don't Mess With Venezuela
DONALD: KRY may have bitten off more than it can chew.

(Mon Aug 04 1997 19:27)
Hi Byron: Thanks, I will be looking for it.

(Mon Aug 04 1997 19:27)
Don't Mess With Venequela
DONALD: KRY may have bitten off more than it can chew.

(Mon Aug 04 1997 19:28)
BW ( 17:39 ) : Scary thoughts but very much in line with my own. It will be a time when all pretense will be cast to the wind and conceivably, it could herald, the beginning of a new dark age. ......... but my congental pessimism is so profound as to not admit the existence and influence of mitigating factors.

BB Fisher might offer the internet as a countervailing force for individual liberation. While presently true, it would seem to me that such a tool is unbearably dependent on technology and minimally civilized conduct for its continued existence. Governments possess only one tool. A hammer. It naturally follows that we will all look like nails.

(Mon Aug 04 1997 19:32)
Recent news on Rustenburg
Annual earning for Anglo American Platinum Corp Ltd ( AAPJ.J ) should be posted this week.

Analysts predict ( rough average of ranges mentioned ) :

Rustenburg: $2.12 vs $3.14

Potgietersrust: $1.04 vs $1.16

Lebowa: $.03 vs $.05

Overall: $1.74 vs. $1.90

PGM prices and Rustenburg strike listed as main reasons for decline.

Dividend will not be affected, even may be higher than last years $1.20

Anglo American is planning on divesting itself of diamond holdings, and merging the three platinum producers under Rustenburg.

(Mon Aug 04 1997 19:32)
Philippine proposal for tax on foreign currency deposits.

(Mon Aug 04 1997 19:39)
@ Signing Plus 5?:
Here is a late story from Yahoo re: Clinton's signing of the tax bill tomorrow. One part indicates that he has 5 days AFTER signing to ACT. I interpret this to mean that once the tax is sign-off on he can then make deletions using his line item veto up to five days after the signing or up to next Monday. Uncertainty still prevails. URL is

(Mon Aug 04 1997 19:51)
This UPS strike could cause a change in psychology. Many companies use the "Kanban" style of just in time delivery and use UPS to implement it. I think the weakness in Compaq and Dell today was UPS related. If the strike goes on for long enough there will be earnings worries.

(Mon Aug 04 1997 19:59)
CNBC analyst celebrity predicts a sharp decline in stocks within next 60 days - although he is bullish longer-term. See INGER LETTER FORECAST:

(Mon Aug 04 1997 20:01)
Donald: I agree on UPS strike significance for all the earnest just-in-time folk. Management is trying the 14 year old Ronnald Reagan approach to strike threats, which was good for its time and bought us the 80's and 90's, but that was then and this is now. If the union management isn't bought off by the DNC or Slick or the Chinese or whoever--and God knows they CAN be bought--this could be a watershed event. This will tell us more about inflation and deflation prospects--or the depth of official corruption--than 100 BLS releases.

(Mon Aug 04 1997 20:01)
Hughes and Michalski: You wrote: "Creating new forms of money involves two steps: inventing a suitable technology, then persuading society to use it as money."

And when persuasion is no longer possible??? What's next??? .... Historically, Gold has required no persuasion. It also requires no government department to regulate it or determine its value. For several thousand years it has seemed to do that very well 'its own self'. .....
Unfortunately, the bankers can't make any money in the process. Therein lies the problem. .......... If "democracies" need money and bankers have money; how then will the system be determined??? Whose needs will be served???? And who will be persuaded and/or coerced??? The bankers??

Please revisit posts from our esteemed site historian, 6pak, for additional details on the essential and fundamental conflict. Several fine examples are available today for your reading pleasure.

(Mon Aug 04 1997 20:04)
Dow/Gold index at 25.32 ounces.

(Mon Aug 04 1997 20:09)
Central Bank Gold Reserves Data is this weeks theme with startling revelations about the Feds not too profitable operations. Big income from Gold Call sales:

(Mon Aug 04 1997 20:21)
would apreciate anyone posting some info on what the Xau and Hui
are? is one unhedged and the other hedged?

(Mon Aug 04 1997 20:22)
Whats ups doc
UPS is the tangible expression of economic cyberspace.

(Mon Aug 04 1997 20:22)
Thailand-Foreign Banks seek assurance
Thailand has US$90 billion in foreign debts - 70% of which have
been accumulated by the private sector. Of the total amount,
40% are short-term loans.
"They wanted the assurance," Gen Chavalit said, after meeting
with 24 bank executives led by association chairman David
Proctor, senior vice president and country manager of Bank of

(Mon Aug 04 1997 20:23)
Donald: In fact, the whole just-in-time/ no inventory/ cheapo/outsizing/ import/ screw-the-worker/ automation/ disinflation scenario is coming to its final scene. The Kondratieff cycle is coming to Klinton-land. Just as British workers rejected Churchill in 1945 and returning American soldiers said "NO WAY" so too are the beleaguered workers of the West about to do an about face. Those who know me would not mistake me for a Laborite, but I see the devastating lives that many face in this land, working 80 hour weeks for part time pay with no bennies, while the Klintonostra stock market sizzles. If they haven't been totally brainwashed and emasculated by their Democratic party handlers, the working people of this country--there actually are a few left--are going to blow Klinton out of the saddle. Deflation? No way! Except for stocks and bonds. 1929? No sir. 1946!

(Mon Aug 04 1997 20:25)

High levels of backwardation induce physical holders to lend into the market. Often commercial users have a bit more inventory around than they need. If they can earn a large enough amount of money by loaning the metal to the market they will do so thus easing a short squeeze. The current run in Pa is different than the first one in that the backwardation is much lower. Since most of these runs end in huge backwardations with no physical available, it would appear that there is more excitement to come. The lack of backwardation also is very meaningful for the Pa and Pl producers. The market is starting to say that we are reaching new price levels that are going to be around for a while. This should be very good news for the producers. If the prices stay up, even the worst hedgers will have no choice but to get good prices. Tonight will be telling in the Far East. If we can get out over 240, some real fun might ensue. The retail shorts are getting smashed and most have no way out in the spot market so they will be gored right to the top.

Gold may move after the PGM's have had a downward correction. I believe that RJ is not alone in the long something short gold trade. When profit taking time comes in on the long something side, so will it be time to lift the gold hedge.

(Mon Aug 04 1997 20:35)
PANDA: Thanks for the post about Russia and the new currency. Two thoughts. If this works a lot of US currency will be repatriated to home.

The other thought is that Russia now must have a hard currency to survive. Gold convertability would be a political masterstroke. If any country has learned the lesson the hard way it is Russia. In 1917 they captured the Royal Family treasury, that was gone by 1940 so on to the Baltic states for more. During the war US cash got them through until 1945 when they looted all of eastern Europe. That ran out in 1989 and they may have seen the light by now. They could end up being better capitalists than the west. They sure know what doesn't work.

(Mon Aug 04 1997 20:35)
Now if the Teamsters can just get Soros/Quantum to lift their hedge on their Aussie ( RBA ) gold purchase........ I can see it now. Goldbugs on the picket line...LOL!

(Mon Aug 04 1997 20:43)
@ Looking For A Catalyst Or On The Road To Nirvana:
The daily and weekly charts on the Gold Indexes, Neumont and the gold futures appear to be positioned to be moved by some catalytic action or event ( s ) . Another day like today by platinum, paladium, crude oil and the CRB index might do it.... The dominoes are falling in place chart wise and economically/politically also. Workers of the world unite, you have nothing to lose but your inflated 401k stock plans. ( Gosh, I hope this doesn't get me into all kinds of politically incorrect trouble. ) : ) ) ) ) ) ) ) ( just in case. )

(Mon Aug 04 1997 20:46)
Hi Earl!....Missive received.....Swami sent back all-knowing answers....
Let's all chant....ummmmmmmmmmmmmmmmmmmmmm.....

(Mon Aug 04 1997 20:47)
I have lost my note on how many tonnes of gold the RBA sold to Soros, but I recall calculating it at $1.8 billion at the announcement. That translates into 50,000 Comex contracts,which is little more than a day's volume, but a lot of open interest. I note than the o.i. has dropped from 220,000 a few weeks ago to 184,000 Friday. Someone isn't rolling into December. Hmmmmmmmmmmmmmmmmm.

(Mon Aug 04 1997 20:51)
AUROPHILE: WOW! Tell Gunrunner to get you an AK-47, a couple of bandoliers and a red bandana. ( Just kidding. )

Deflation is the best solution. A good old fashioned Depression will set everything right and get us a gold standard. At this point the whole world is on autopilot and nothing any of us do or say can stop it. Some of us old timers have to make it through to show them how to put the pieces back together. Relax.

(Mon Aug 04 1997 20:58)
Well-known Analyst cites potpourri of currency comments from world-acclaimed sources. Dines also says those blindly bullish on stocks are like the Italian proverb: He who knows nothing, doubts nothing.:

(Mon Aug 04 1997 21:05)
All: Anyone with an interest in options on any commodity the following is a must-- You will find a lead in to another site ( now under construction ) with option probabilities for succesful trades.

(Mon Aug 04 1997 21:07)
@early returns
At what else is new: EBN Gold is down .20 and Silver down one centavo....
Was "out" for the day but it looks like I didn't miss much on the gold front....In "the olden days" Platinum+Palladium would have pulled it up by its boot-strings....not stangled it!....This is a "new era" folks.....stox will go up 70% a year ( world wide ) and everythin will be right with the world...."Beemers" will abound....Trickle down will trickle....posessions will be king and we'll ALL be soooo happy...Until some terrorist Blows us up.....Could THEY try to derail the "mighty Dow"?
I must be like Jerry Ford.....can't have the headphones on ( blarin ) and think.......Why think?????

(Mon Aug 04 1997 21:07)
UPS strike may change the trend
Donald: your "If the strike goes on for long enough there will be
earnings worries." is just a part of the story. It may finally change
the trend of "no inflation coming from stagnant wages" with economists
not able to explain why. Strike at UPS may be a turning point and a big
surprise for management thinking in line of "we've got wages under
I am with AUROPHILE on this issue.

(Mon Aug 04 1997 21:08)
I had an interesting meeting with the Platinum Guild International a couple weeks ago. Regarding South African producers being hedged:

There is a rather complicated formula for platinum deliveries to Japan, but almost all of the next five years platinum production in South Africa is already sold to the Japanese auto and jewelry industries. Although this metal is effectively already purchased, the delivered price is not inelastic. This is one reason the Russian deliveries would seem to play a more important role than the 15% - 17% of total production which these supplies represent.

There is no real lid on platinum prices. The use of platinum is quite small on a per product basis - excepting jewelry - that the price of platinum could double without significant price increases in the final products.

(Mon Aug 04 1997 21:09)
Historically, when Platinum boasted a premium of $100 over gold ( now greater than $131 ) , it heralded a subsequent GOLD rally. Read RJ's apropos charts & comments: RJ Platinum Factor: -

(Mon Aug 04 1997 21:09)
AUROPHILE: I missed that announcement on the SOROS PURCHASE. When did that occur, was it on Reuters?

(Mon Aug 04 1997 21:10)

Another limit up move on the Tocom for Pa. Spot Pa has said bye, bye to the 240 level. Last quote I got was 244 bid at 248. The quotes are starting to widen out a little but the backwardation isn't budging. It looks like the buying in the spot market is fund related. So far the commercials haven't blinked. It could be that Tiger fund is making a point.

Just to test the market I sold a few thousand ounces of our horde and it was snapped up without so much as a ripple. The TOCOM is preparing to have a meeting. Things are getting interesting.

(Mon Aug 04 1997 21:11)
What is happening in Europe?
Somebody already asked the question but nobody answered it.
Is there any significance ( and what is the reason ) for today's across
the board drop in European stock markets?

(Mon Aug 04 1997 21:12)
D.A. Thanks for the comments. Appreciate it

(Mon Aug 04 1997 21:14)
Gold in the International Monetary Fund.\exr\facts\gold.htm

(Mon Aug 04 1997 21:19)

No, we don't have an enslaved clan of Mongols, that was hoard not horde.

(Mon Aug 04 1997 21:20)
HUI now XAU later:
The AMEX Gold BUGS ( Basket of Unhedged Gold Stocks ) Index represents a modified equal dollar weighted portfolio of 13 major gold mining companies. Options trading on the Index are designed to give investors exposure to near-term movements in gold prices reflected in the share prices of gold mining companies that do not hedge their production for extensive periods into the future - i.e., those with a hedging ratio of less than 11/2 years production.

(Mon Aug 04 1997 21:20)
Moro ( 21:11 ) Fear of interest rate increases.....Especially in Germany and Great Britain....

(Mon Aug 04 1997 21:21)
MIRO: This may help understand. I will look for more.

UK interest rates: Increase feared despite
slower cash growth


By Robert Chote, Economics Editor

The level of UK interest rates is expected to be higher in the coming
months than previously anticipated, despite figures from the Bank of
England showing that the rate of growth of cash in circulation continued to
slow last month.

The value of notes and coins in circulation rose by 0.2 per cent in July after
adjusting for seasonal patterns. This cut the annual rate of increase to a
20-month low of 5.6 per cent.

However; with the Bank's monetary policy committee due to begin its
monthly deliberations on Wednesday; the financial futures markets now
expect the level of interest rates to be slightly higher in the coming months
than previously anticipated. Base rates are expected to be about 7.5 per
cent at the end of the year compared to 6.75 per cent at present.

Most economists expect the committee to raise rates by a quarter-point for
the fourth successive month on Thursday. This would take base rates to
their highest level since the aftermath of sterling's departure from the
European exchange rate mechanism in 1992. But some analysts predict
either no change this month or a rise of half a point or more.

On the face of it, the cash in circulation figures suggest retail sales may
have slowed following the surge in June fuelled by building society
windfalls. But the relationship between the two sets of data has been
conspicuously poor in recent months, with sales accelerating and the rate
of growth in circulating cash slowing down.

Including banks' balances at the Bank of England and cash, the narrow
money supply measure M0 rose by a seasonally adjusted 0.2 per cent in
July. This reduced the annual rate of increase to 5.9 per cent, the same as
in April but above the 4 per cent ceiling of the Treasury's "monitoring

Mr John O'Sullivan, economist at NatWest Markets, said the sharp
pick-up in high street sales in May and June was driven by borrowing
rather than cash. "We will get a clearer picture with the Confederation of
British Industry's retailers' survey on Thursday," he said. The weakness of
the narrow money figures is also in marked contrast to the latest consumer
confidence data. GfK's monthly survey shows sentiment at its highest level
since 1988.

Before making its decision on interest rates, the monetary policy committee
may consider today's industrial production figures for June. These are
expected to show modest growth in manufacturing following a dramatic
decline in May.

Most economists believe May's 1.1 per cent drop in factory output
overstated the weakness of the sector. The high exchange rate is hitting
export order books, but buoyant domestic demand appears to be

However, a bigger than expected increase in rates could push sterling
towards its recent highs of just above DM3.08.

(Mon Aug 04 1997 21:21)
....and good old profit takin...

(Mon Aug 04 1997 21:23)
Sorry! Moro=Miro in Cape Breton!

(Mon Aug 04 1997 21:25)
Where is Puetz?

(Mon Aug 04 1997 21:29)
MIRO: Here is the whole kit.

Europe: Frankfurt slides on interest rate


Worries about an upward move for German interest rates hardened on
Monday and FRANKFURT lost ground for the third session running.

In the face of a surging dollar, the money market maintained the tight
stance adopted on Friday and interest rate sensitive shares came in for
heavy selling.

At the close of electronic trading, the Dax index stood at an Ibis-indicated
4,302.50 - off 34.48 for a three-day decline of more than 3 per cent.

Dealers said the onset of the August holiday period had created thin
markets but that sentiment had nevertheless taken "something of a knock"
at the sight of rising bond yields.

Insurance leader Allianz retreated DM10.50 to DM445 and the banks
streamed uniformly lower.

Deutsche Bank came off DM1.40 to DM118 and Dresdner fell DM2.10
to DM80.70. Merger partners, Bayerische Vereiensbank lost DM2.50 to
DM95.70 and Bayerische Hypo DM1.30 to DM72.80.

Given the mood, even some of the big exporters were taken to task in
spite of the dollar strength. Volkswagen shed DM26.4 to DM1,371.5,
Daimler Benz DM1.55 to DM146.55 and Bayer DM1.54 to DM74.66.

AMSTERDAM initally bucked the weaker trend on European stock
markets as upbeat expectations for this week's company results buoyed
sentiment. But the AEX index failed to hold on to its morning gains,
shedding 1.39 to 979.35.

KLM gained Fl 3.40 to Fl 76.40 in active trade ahead of today's
second-quarter earnings report. Analysts said the quality of the airline's
earnings would be significantly improved.

Also due to report today is publisher Wolters Kluwer, which added Fl
10.10 to Fl 283.00 after touching a record Fl 291.70. The share has this
year underperformed the market.

Hoogovens is expected to report a rise in first-half earnings of about 30
per cent tomorrow. The steel group's share gained Fl 3.70 to Fl 138.50.
Its profits are expected to benefit from firmer steel and aluminium prices
and strong demand in the US this year after profits dipped last year.

Philips' entertainment offshoot PolyGram also rose on expectations that the
Mr Bean movie would be a success, notching up a gain of Fl 6.00 to Fl

ZURICH followed Germany lower, with the SMI index losing 127.2 or
2.2 per cent to 5,771.0.

Novartis was the day's most active stock, dipping SFr74.00 to SFr2,353.
Drugs rivals Roche came off SFr365 to SFr14,260 and Clariant SFr38.00
to SFr1,090.

Banks bridled at the prospect of a German-led round of interest rate rises
across Europe. UBS, which kicks off the banks' reporting season today,
lost SFr16.00 to SFr1,668 and Credit Suisse shed SFr7.25 to
SFr196.75. SBC gave up SFr9.00 to SFr400. Among insurers,
Winterthur lost SFr18.00 to SFr1,469.

Oerlikon-Buehrle continued to suffer from negative talk following
speculation that the group was set to spin-off its shoes division, best
known for the Bally label. The shares came off SFr3.00 to SFr151.

PARIS buckled under the dollar's strength, with the CAC 40 failing to
hold above the 3,000 level in a thin market. Fears that the Bundesbank
might raise interest rates to prop up the sagging D-Mark shaved 57.03 off
the CAC 40 to 2,992.41.

Rhne-Poulenc fell sharply as investors took profits after the share's strong
surge in recent weeks, shedding FFr12.60 to FFr255.30.

Alcatel Alsthom was heavily traded for the second session running as
brokers, including Paribas, issued or reiterated buy recommendations.
Alcatel outperformed the overall market, but the shares still ended
FFr14.00 lower at FFr845.

Valeo bucked the trend by rebounding from its recent weaker levels,
gaining FFr9.00 to FFr393.

MILAN picked up where it left off on Friday with blue chips moving
lower on a broad front. Olivetti fell L13.00 to L628 after the information
technology group cut back estimate for the capital gain on the sale forecast
on the sale of its PC unit. Marzotto eased L665 to L17,314 after solid but
unexciting first-half results. The Mibtel real-time index ended off 257 at

HELSINKI was buoyed by telecoms group Nokia's
better-than-expected first half results, released an hour before the close of
trade. The HEX index closed off its morning peaks, up 28.87 to 3,638.86.
Nokia ended at FM482, a new high, but off its FM485 intra-day peak.

STOCKHOLM had the opposite reaction to Nokia's results, as it was
pulled down by Ericsson on fears that Nokia had taken market share away
from its Swedish rival. The general index was about 0.6 per cent lower at
3,140.76 after a Skr7.5 fall in Ericsson to SKr354.

MOSCOW responded enthusiastically to the new rouble and the RTS
index ended the session with a gain of 8.11 at 518.31. "The rouble move is
another sign of Russian economic restructuring. This will encourage foreign
investors," said one broker. The RTS is this year's fastest moving emerging
market index, with a gain of more than 150 per cent since January.

BUDAPEST threw off Friday's setback to break through a record high on
the BUX index which ended 106.39 ahead at 7,981.12. Oil leader MOL
surged Ft275 or 5.8 per cent to Ft4,990 with investors anticipating strong
second quarter results and reacting positively to press reports that the next
move in the group's progressive privatisation had been delayed.

(Mon Aug 04 1997 21:31)
Ted, Donald: Thanks for the reply. It crossed my mind but around 2% drop
was kind of steep. Interestingly enough London kept the index steady.
Ted: no need to be sorry. Miro is my real name and because it is so
foreign to English speaking people I've got used to anything close to
it ;- )

(Mon Aug 04 1997 21:40)
MIRO: Here are more strike stories. Also, the UPS strike is getting big press in UK.

Industrial action: BT and Barclays face


By Andrew Bolger, Employment Correspondent

Two of Britain's biggest employers - Barclays and British
Telecommunications - face industrial action next week by disgruntled

Two of Barclays' banking unions are discussing a joint overtime ban, while
British Telecommunications engineers in London will stage a one-day strike
next Tuesday over the use of contract labour.

The Barclays dispute is over a new pay and grading structure, which has
already been imposed on staff.

Unifi, the union which has more than 30,000 members in Barclays, and
Bifu, which has 7,000 members, said yesterday they would discuss the
timing of a joint overtime ban after the bank turned down a request to go
to Acas, the government-funded arbitration service. A work-to-rule is also
being considered.

The BT strike will involve engineers working on phone repairs and
installation. Members of the CWU communications union voted by 1,202
to 268 in favour of industrial action. It will be followed by further action, to
be announced later.

BT expressed disappointment that its engineers had felt the need to take
industrial action. "We have been having talks on the issue of contractors -
and are more than happy to keep the discussions open," it said. "Our
concern will be to minimise the impact on our customers in London."

The bank unions' scope for action has been limited by the recent vote by
Unifi members in favour of action short of a strike but against a strike.
Members of Bifu voted narrowly in favour of both options.

Barclays said yesterday: "The results of the ballots clearly demonstrated
that the majority of our staff do not want or support industrial action of any
kind and we are disappointed that the unions are continuing to pursue this
course of action."

Mr Iain MacLean, Unifi's assistant general secretary, said the union had
held back from launching industrial action in the hope of having fresh talks.

"At no time has Barclays listened to what its staff and unions have been
saying. We have no recourse but to enter into protracted industrial action,"
he added.

The unions claim that the new pay structure means that most staff will have
their pay and pension frozen for the foreseeable future, after a short
transition period.

Barclays said it rewards performance rather than how long a member of
staff has worked for the bank.

The bank insisted the new scheme did not constitute a pay freeze and that
it would encourage excellent performance.

Mr Jim Lowe, Bifu's assistant secretary, said: "The talks broke down
because Barclays refused to move and refused to go to Acas.

"This from a bank which is expected to announce half-year profits of more
than 1bn on Thursday."

(Mon Aug 04 1997 21:41)
The Quantum purchase of the Australian cache was, en effet, on Reuters. Friends down under with Reuters quote terminals and connections to trading desks at the larger banks noted the hedging and were told about the sale in late spring, but couldn't believe that the RBA would actually sell its gold. They therefore regarded it as an unlikely, unconfirmed rumor.
You may recall that GS was in OZ for meetings with the RBA the week of the announcement and in the wake of his Thai baht short revelation. It was no secret that Quantum was short the $AD in size and was beginning to unwind the position. As the old saying goes, "believe what you see."
I am told, although I have no recollection of it, that GS entered into gold in late 1991 through Australia.

(Mon Aug 04 1997 21:50)
Hello Micro,

I had a talk with a mid level insurance man of a very large national firm [US] to day regarding the y2k problem. He said from memory "in 1999 make sure you get your money out of your bank ( in cash ) , pensions, insurance etc are just going to "disapear."

The conversation had a sureal feel about it.

(Mon Aug 04 1997 21:50)
AUROPHILE: Thank you

(Mon Aug 04 1997 21:56)
April 1997

Gold in the IMF

Before the Second Amendment of the Articles of Agreement of the IMF in
April 1978, the role of gold in the international monetary system was central
and pervasive. The Second Amendment contained a number of provisions
which, in combination, were intended to achieve a gradual reduction of the
role of gold in the international monetary system and in the Fund. However,
gold is still an important asset in the reserve holdings of a number of
countries, and the IMF remains one of the largest official holders of gold in
the world.

Holdings of Gold

The IMF holds 3,217,341 kilograms of gold ( 103.4 million fine ounces ) at designated
depositories, valued in the IMF's financial statements at SDR 3.6 billion on the basis of SDR 35
per ounce ( except for a minor amount accepted by the Fund in 1992 in partial settlement of a
member's overdue obligations, and valued at the then-prevailing market price ) . Valued at current
market prices, the IMF's holdings amount to SDR 26.7 billion ( $36.8 billion ) . These holdings
represent the balance of the IMF's stock of gold after the gold auctions and the restitution of gold
to members in the period 1976-80. While gold is reflected as an asset in the IMF's balance sheet,
it is not used in the Fund's operations and transactions. According to Article V, Section 12 ( b ) of
the IMF's Articles of Agreement, any transactions in gold by the IMF require an 85 percent
majority of the total voting power of the IMF. The IMF may sell gold outright on the basis of
prevailing market prices; it may accept gold in the discharge of a member's obligations to the IMF
at an agreed price on the basis of prices in the market at the time of acceptance. The IMF does
not have the authority to engage in any other gold transactions, e.g., loans, leases, swaps, or use of
gold as collateral, and the IMF does not have the authority to buy gold.

Gold in the Articles of Agreement of the IMF

The Second Amendment to the Articles of Agreement of the
IMF eliminated the use of gold as the common denominator
of the par value system and as the basis of the value of the
SDR. The Amendment also abolished the official price of
gold and abrogated the obligatory uses of gold in transactions
between the IMF and its members. The Second Amendment
required the Fund, in its dealings in gold, to avoid managing
its price or establishing a fixed price of gold. Under the
Amendment, members undertook to collaborate with the
IMF and other members with respect to reserve assets to
promote better international surveillance of international

The IMF's Policy on Gold

In 1995 the IMF's Executive Board reviewed the role of gold in the IMF and concluded that its
policy on gold should be governed by the following principles:

As an undervalued asset held by the IMF, gold provides a fundamental strength to its
balance sheet. Any mobilization of the IMF's gold should avoid weakening its overall
financial position.

Its gold holdings provide the IMF with operational maneuverability both as regards the use
of its resources and through adding credibility to its precautionary balances. In these
respects, the benefits of the IMF's gold holdings are passed on to the membership at large,
to both creditors and debtors.

The IMF should continue to hold a relatively large amount of gold among its assets, not only
for prudential reasons, but also to meet unforeseen contingencies.

The IMF has a systemic responsibility to avoid causing disruptions to the functioning of the
gold market.

The profits from any sales of gold should be retained and only the income deriving from the
investment of those profits used for any operations that might be agreed.

Background Information

Sources of Gold

The IMF acquired virtually all its holdings of gold through four main types of transactions under the
original Articles of Agreement.

Subscriptions. The original IMF Articles of Agreement prescribed that 25 percent of initial
subscriptions and quota increases were normally to be paid in gold. This represented the
largest source of the IMF's gold.

Payment of charges. Originally, all charges, i.e. interest on members' outstanding use of
Fund credit were normally payable in gold.

Repurchases. Members were permitted--and in some circumstances could be required--to
use gold to repay the IMF for credit previously extended.

Purchases. A member wishing to obtain the currency of another member could acquire it
by selling gold to the IMF. The major use of this provision was sales of gold to the IMF by
South Africa in 1970-71.

Uses of Gold

Outflows of gold from the IMF's holdings occurred under the original IMF Articles of Agreement
through sales of gold for currency, and via payments of remuneration and interest. Sales of gold for
currency were divided as follows:

Sales for replenishment ( 1957-70 ) . In the late 1950s and in the 1960s, the IMF sold gold
on several occasions to replenish its holdings of currencies.

South African gold and mitigation. In the early 1970s, the IMF sold gold to members in
amounts roughly corresponding to the amounts purchased earlier from South Africa; it also
sold gold in connection with payments of gold for quota increases by some members, in
order to mitigate the impact of these payments on the gold holdings of reserve centers.

Investment in U.S. Government securities ( 1956-72 ) . In order to generate income to
offset operational deficits, some gold was sold to the United States and the proceeds
invested in U.S. Government securities. A significant buildup of reserves through income
from charges prompted the IMF to reacquire this gold from the U.S. Government in the
early 1970s.

Auctions and "restitution" sales ( 1976-80 ) . The IMF sold approximately one third ( 50
million ounces ) of its then-existing gold holdings as an outcome of an agreement by its
members to reduce the role of gold in the international monetary system. Half of this amount
was sold in restitution to members at the then-official price of SDR 35 per ounce; the other
half was auctioned to the market to finance the Trust Fund, which supported concessional
lending by the IMF to low-income countries.

(Mon Aug 04 1997 22:02)
AUROPHILE: As I recall, just prior to the 92-93 run up, Soros acquired a large interest in NEM in a private transaction from an English Financeer. A large portion of this was sold just prior to decline in gold to bring the holdings below reportable limits. I wonder how much, if any, he still has. There was a place on the Web that had a lot of this type of information, but unfortunately, I misplaced it.

(Mon Aug 04 1997 22:06)
Vieserre: GS acquired the Newmont shares from the great and recently departed Sir James Goldsmith, may he rest in peace. Sir James was the mind and heart of a leader which Europe, and indeed the world, needs

(Mon Aug 04 1997 22:09)

Last night I posted something with regards to the open interest on the Tocom. It was reported to me incorrectly. I was off by a factor of 10. It seems that the June 98 contract which is the active Tocom Pa contract had an open interest of 33,000 contracts as of Aug 1. This represents some 1.5 million ounces of Pa. This is huge. No wonder these guys are having meetings.

As to why the active contract is June 98 and why it 'must' be closed or rolled I can not give an informative answer although I expect to know before the night is out. As I recall it has something to do with margin requirements and separating the specs from the commercials.

(Mon Aug 04 1997 22:09)
Miro: Sometimes my thumbs get in the way for I am just a dumb carpenter..
Know a Miro in Vermont....EBN Gold down .30 and Silver still down one centavo ( how many Baht is that??? ) .....Am ramblin tonight with no idea of where gold is goin ( near term ) but still feel very comfortable in Gold shares at these prices....if one can be reasonably patient,I see little down-side risk and big potential gain....A no-brainer ( my specialty! ) ....

(Mon Aug 04 1997 22:09)
BYRON: Since you are the expert on financial sites, where can I find for a particular stock, the major funds, institutions and other holders?

(Mon Aug 04 1997 22:10)
Fidelity Select American Gold & Precious Metals Chart.
Ten market days ( seven hours / prices per day )

(Mon Aug 04 1997 22:11)
Donald: REF: Gold in the International Monetary Fund. Amigp Donald, you are a veritable encylopedia for the net. many thx for the URL.

(Mon Aug 04 1997 22:12)
strike, reward for performance, etc..
Donald: Its interesting to read the company rep. say "we reward
performance not seniority" I am still making my living through my gainful
employment. I am making decent money by any standards, but  to maintain
my performance I have to put in a lot more hours than a few years ago. I
am in software industry. It used to be that we had admin and technical
support staff. Well it was "downsized". This mean that in addition to my
"real" work I have to do a lot of things which were done by support
staff, taking on tedious tasks which could be done by person making 1/5
of my salary. Do I get reprieve from my professional assignments?
Obviously not - I just need to put in more "free" hours. I would say
that my real hourly pay has decreased by at least 30% in the last few
years. It really irks me when spin masters and academic experts talks
about productivity increase of the US work force. I am not labor
movement advocate, my work is even not unionized, but somehow I dont
blame the UPS teamsters.

(Mon Aug 04 1997 22:16)
VIESERRE: you might try this site:

(Mon Aug 04 1997 22:18)
Bre-X News
Family says thumbprint on body doesn't match Michael de Guzman's.

(Mon Aug 04 1997 22:18)
Vieserre: My data is over two years old. At that time Soros largest holding was that of NEM. This was his private holdings, not Quantum fund.

(Mon Aug 04 1997 22:20)
Miro: Your point is well taken. Klinton and the DNC may have sold out to the Chinese, but there are still real people living in the US. My UPS driver has a devil of a time making it and keeping a home and family together despite hours which would defeat a 20 year old.

(Mon Aug 04 1997 22:20)
El Nino
Here in the deserts of Atlantic Canada we are currently gettin our first good rain in over six weeks....Many towns in Nova Scotia had their driest July since they began keepin records.....Local farmers will get wiped out if we don't get a few days of this....looks like dem veggies will cost a lot more this fall but....we ain't got NO inflation sir eeeeee...Evenin Vieserre!....

(Mon Aug 04 1997 22:21)
Ron: Who's thumbprint is it???

(Mon Aug 04 1997 22:28)
how bad it will be?
jklaj;fj: I would not go that far. I work on Y2K problem and know it
will bring disruption. But I dont think that unless you keep all your
financial assets under your mattresses they will disappear. The reason
for overblown scenarios comes mostly from the frustration when not too
many people in "power" believe that it is a real problem. "we faced many
problems before  ya ta ta  we always managed " To get the attention you
need to paint some extreme ( but not impossible!! ) scenario to get their
attention. OTOH, if your bank goes under, and you have all your assets
in that institution, there is the real possibility you may loose most of

(Mon Aug 04 1997 22:31)
Something a little different, for those astronomicaly inclined.

TED -- Good evening, I just looked at the current weather conditions for Mt. Washington. 43 degrees F in fog. Visibility less than 100 ft. Hmmm, sort of reminds me of the current PM market. Cold, damp, and I can't see a damn thing!

(Mon Aug 04 1997 22:31)
Together the HORDE and I will trot up the road apiece ( on horseback, of course ) and look for that HOARD of Rooskie PL. Ghengis IIVXX hasn't been out of the 'great tent' for a little action lately and he has quite a fondness for the Other White Metal... a great, shiny platinum balooooon!


...hear that fat lady?

(Mon Aug 04 1997 22:32)
@xau in overbought territory
Daily XAU chart w/stochastics and bollinger bands; definately in the overbought region, but still can stay that way for awhile.

(Mon Aug 04 1997 22:34)
XAU now at this URL
These kids are driving me batty!

(Mon Aug 04 1997 22:40)
Hi Gang....Just lurking.......

(Mon Aug 04 1997 22:41)
@the scene
Granny -- That's the first time anybody ever called me their favorite Kitco poster. Shoot, I wouldn't call me that! I believe it is you who has the sense of humor! I don't recall posting any of that stuff myself.

Aurophile -- Perhaps UPS will relocate itself to Mexico. It can get a lot cheaper wage base there! Of course they'll have some REAL HIGH mileage delivery trucks!

'Quick everybody, and pull those oars together. We ain't made it to the bottom yet. No raises or bennies 'till we do!'

(Mon Aug 04 1997 22:43)
de guzman
If de Guzman's brother suspects that his brother may not be dead, why would he want to wake up the authorities by rechecking fingerprints?

(Mon Aug 04 1997 22:43)
Donald Re: your 21:56, I am in awe. Whoever sent you Kitco's way God Bless m, you are an invaluable resource.

(Mon Aug 04 1997 22:43)
The beat goes on.... Some interesting stories here. This economy will be like this forever, or until you die. Pension funds throwing in the towel on actively managing assets, they're going to index funds.

(Mon Aug 04 1997 22:47)
Shek: I'm here lurking. I've nothing to say at the moment.

(Mon Aug 04 1997 22:47)
Here we go! Per D.A.s comments earlier about that 'emergency meeting';

(Mon Aug 04 1997 22:49)
Just how does one 'manage' a market and still call it a market?

(Mon Aug 04 1997 22:51)
@ The Wizard Of Oz:
Vieserre: Don't know about finding holder of specific stocks but I have come across info about the specific holdings of mutual funds ( although it is usually months old ) . At Bart's Web Resource Links above I located two posibilities: and These are mutual fund sites ( one specifically for gold ) . Also you might want to check out Vronsky site.

Regards Bart's site above ( the web site ) . It's a slight mess right now. Apparently John ( hepcat ) has found a loop-hole and has been posting messages at that site as recently as Sunday. But if you want to wand on down, you might find someother sources of info. Good luck.

(Mon Aug 04 1997 22:51)
@ The Wizard Of Oz:
Vieserre: Don't know about finding holder of specific stocks but I have come across info about the specific holdings of mutual funds ( although it is usually months old ) . At Bart's Web Resource Links above I located two posibilities: and These are mutual fund sites ( one specifically for gold ) . Also you might wa

(Mon Aug 04 1997 22:53)
What Happened:

(Mon Aug 04 1997 22:53)
all that glitters
WIPE OUT. Last chance to exit all paper assets. All " Johnnie Come Latlelys" are in the market now. Pigs make money hogs don't. Stock market pundits are waiting to squeeze every last dollar out. Bill Gates is now worth on paper a staggering 34 billion. We are living in the last days of the market. The stock charts are straight up. IPO's are an everyday event in large numbers. The crowds have gone mad and they will do the same when they finally realize they been taken, but by then it will be too late. Don't be led to slaughter. Sleep tight.

(Mon Aug 04 1997 22:55)
A Deflationist -- and definitely not a goldbug -- Speaks
On The Money

Rounding first base and heading for debt

Pete Kendall

When On The Money started in January 1991, it was based on the three D's: deflation, debt and depression. All these years, and I've yet
to make it to first base.

But if you didn't know by now, I'm stubborn. I say we're going to make it to first base. In fact, I believe the markets never wavered in
their determination to deliver falling prices for goods and services, they just took the long way around to lower prices -- higher prices.

Rest of article at:

Ted: Clumsy wording on my part, eh? :- )

(Mon Aug 04 1997 22:55)
VRONSKY, GVC: Thanks: Vronsky, is there anything you do not know about gold or, if so, is not available at your digs. ( : ) GVC, that site you recommended looks interesting. In case you have not uncovered it, Reuters has a new commodity directed site at

(Mon Aug 04 1997 22:59)
Miro Amen indeed to your post for longer "free" hours = much of the productivity benefit. And it is no longer just the non exempt salaried workers but also the union workers. The team work concept has been bought into and this has waylaid the job description aspect, work rules etc. No more "I have my quota in" or "it's not my job" because those things have been done away with. While past union work rules could be abusive, the pendulum is swinging the other way fast in company's favor. The increase in work load and constant reeducation acquired of the more skilled union workers, and salaried, adds oddles to the bottom line but as the boomers age I do not know how they/we will keep up. I sure am getting more hats all the time! I do not think everyone has caught on yet but they will.
Speaking of which this indentured servant is in for a long long stretch of it. Good night all.

(Mon Aug 04 1997 22:59)
trading volume
As mentioned by George Cole, and according to my rough calculations, 11 major gold stocks ( most XAU stocks, but not including NEM or HL ) which I follow had a total trading volume today of only $24 mil. Coca Cola bottles sweat more than that. Most was by ABX and PDG, which is no surprise. If I had a spare $23 mil I could have started a bull market. Then again, if I had much to sell and wanted out, I could have dropped XAU down all by myself.

(Mon Aug 04 1997 22:59)
BYRON: Thanks, I saw Hepcat's posts and I am still laughing about it. How about that for being resourceful ( ~;~ )

(Mon Aug 04 1997 23:03)
around the corner
TOCOM has a precedent and a professor in the name of Dr. Henry Jarecki, chairman of the Comex Silver Committee in January 1980. With the Hunts and everyone else long silver and the commercials net short, the Yale psychiatrist, and principal of Mocatta, decided that enough was enough. With Paul Volcker's blessings he declared that margins were raised to astronomical levels and that one could only liquidate and not buy the nearby contract. Force majeure? Force majestic! Force.

(Mon Aug 04 1997 23:03)
in sack-o-tomatoes
Larryn: One might conclude that the clear-thinking gene is missing in that family! :- )

(Mon Aug 04 1997 23:06)
@ Here We Go:
Is that newsconference my catalyst that I was looking for. Was just looking at the 5 minutes August Gold and the 5 minutes XAU charts at XAU is floating up in the air and the Gold Futures flat down at "hopefully" support. Yes, as I like to say, "Something Big This Way Cometh." Just hope its not a Mack Truck. Well, at least, I feel confident it will not be a UPS truck. We know where they all are. : )

(Mon Aug 04 1997 23:07)
aurophile and Donald: It is easy to read too much into the UPS strike. It is just as easy to read too little. What it means:1 ) The Teamsters are still a "business union" in the mold of John L lewis and Jimmy Hoffa. They are largely unconcerned about affirmative action, gay rights, saving the spotted owl and all the other pet issues of the "political unions" that make up the bulk of the AFL-CIO. The IBT is notswayed by the tears and flapdoodle of the Slick one to the point where they are going to stand still any longer while Slicks buddies ( bosses ) , Rubin,, sweep all the chips off the table. 2 ) The job of the guy who delivers my Texas BarBQ to my door in Florida cannot be replaced by a coolie in China. What it does NOT mean is that American wage and salary earners are finally going to get their share of the pie. As The late great Sir James Goldsmith said in his "mini opus", "The Trap", from the textile worker in Carolina to the computer engineer in Silicon Valley, they live in fear of losing their job to the Asian hordes.

Wages in the advanced countries MUST fall toward the level of wages in the third world under a regime of free trade. Its the law.

(Mon Aug 04 1997 23:12)
At the Hunt
AUROPHILE: How is it said, possession of the rules is 9/10ths of the law.
I remember it well. A lot of coin and other dealers when down with Hunt riding on his coat tails.

(Mon Aug 04 1997 23:13)
Goldfinger ( 22:53 ) Do I detect a hint of bearishness on your part towards the stock market??? EBN Gold down .45 and Silver down a cent...

(Mon Aug 04 1997 23:18)
@ At The Tone The Time Is...
Panda: That time of 1:30 PM, are we talking Japan time?

(Mon Aug 04 1997 23:22)
The Chinese Refrigerator
OLDMAN: That law of free trade only applies to goods and services in competition, as you have stated or implied. Services, which comprise a significant portion of our GDP, is the field that has been making the most progressive gains because it does not have to compete with foreign imports. In addition, there are products as well which are excepted. As one economist puts it, how many Chinese refrigerators do you see imported into this country.

(Mon Aug 04 1997 23:24)
@kindred soul
Cherokee: Come back!...We miss you....flux or no flux.....Good night ALL

(Mon Aug 04 1997 23:25)
Oldman: I am always looking for the breakpoint, the end of the road, the event which disproves the paradigm. But you are of course correct that the American worker is headed for Asian oblivion. Only US mutual fund owners will be able to support this get and spend market which in turn supports the world. Unless something changes. People make changes. What will make people change? Corruption? Injustice? Just-in-time inventory controls? Ha.

(Mon Aug 04 1997 23:27)
@ Sleepless In PA
I don't think DA will get much sleep tonight.

(Mon Aug 04 1997 23:29)
@the scene
oldman -- It's GOOD to see you back! Your statement tha "Wages in the advanced countries MUST fall toward the level of wages in the third world under a regime of free trade. Its the law.", is totally correct! How much better it would have been for ALL of us if it had been the other way around! But apparently, that is not to be the case. That was written when 'free trade' was implemented. Free trade puts all participants, and even those who are not signers of it but do trade, on a fast track south! I've said in the past that it is a means to boot-strap the third world countries into coming into 'twentieth century', but time is very limited as we export our own present and future wellfare away with every dollar that leaves. Unfortunately, the workers there are not recieving the kind of wages necessary to allow them to be consumers of what they make or what we make in any meaningful way. Our greatest exports have been jobs and machine tools, and only companies and governments buy machine tools. I wonder who they think they'll be exporting to in time! Henry Ford was smart enough to pay his workers wages such that they could buy what they built! Today, it's a race for the bottom. All hands man the oars!

the wizard
(Mon Aug 04 1997 23:30)
... and the U.S. dollar is 'history' ...

(Mon Aug 04 1997 23:37)
@ Gold Show:
Tomorrow and Wednesday, they will be having the Gold Show in Las Vegas. If anybody is in the area and attends, please pass on an nuggets. Of course, we have our own 24 hrs, 365 days a year Gold Show here at Kitco. ( ^*^ )

(Mon Aug 04 1997 23:39)
bring wages to the third world level?
Oldman: "Wages in the advanced countries MUST fall toward the level of
wages in the third world under a regime of free trade. Its the law."
This is only partially true. Wages are only one part of the equation.
The second part is living expenses. If I could buy my house for 1/10 of
the US price, pay $3 for dinner in a decent restaurant, pay 1/10 of what
I pay now for my kids college education, didnt have to drive my car to
work because I could use cheap public transportation, etc.. etc.. than
yes, you can bring my wages down toward the level in the third world.
Other than that I wont be able to survive. I was born and grew up in
Prague ( Czech ) and while making only 1/10 of wages in the US my living
standard ( though not comparable ) was not 10 times lower than in the US.

(Mon Aug 04 1997 23:39)
all that glitters
TED, I'm bearish and on an all out sell signal. I really don't feel comfortable paying these high evaluations. It's like paying $25 for a hamburger in relation to alot of stock market values out there. No thanks!

(Mon Aug 04 1997 23:41)
I used to be a sailor on US flag merchant ships. My salary alone, not including benefits, was equal to all the payroll for all 45 personal on Red Chinese ships; everyone from the captain to the Bed room Stewards. This was in 1988. Now in the 1990's there are even cheaper sailors...The Russians. They basically work for poor food, running water and a place to sleep. There is some heating of the cabins and AC, but if the machinery breaks, it doesn't get spares or repairs.

Needless to say, my employer, a fortune 500 company decided they didn't need me anymore

(Mon Aug 04 1997 23:41)
Eldorado: Your post could have come directly from Sir James's book, :The Trap". Its only a little over 100 pages, and should be read by everyone who is interested in what's happening in the world today. He and Henry Ford, IMHO, were the two greatest industrialists of the 20th century. They both believed that the economy existed to serve the people of the nation, not a small group of dealers in paper. Ford also wrote a book. It sold over 10 million copies, but I can't even mention the title. If I named the book, my posting privileges would be revoked forthwith.

(Mon Aug 04 1997 23:43)
Earl: You should go to Bangkok!...Again: good night ALL!

(Mon Aug 04 1997 23:48)
former: When this bubble bursts, you will be joined by many millions more. During the '70's and '80's I created over 200 high paying jobs for American manufacturing workers. As the '90's dawned, I was faced with the choice of either moving the plant to Mexico or selling out to a multi-national. I sold. The money I got in '93 has made me more money than I made in all my life before. A greater reward in 4 years from the market than for a lifetime of building a business and employing people. A little twisted, huh?

(Mon Aug 04 1997 23:51)
End of @ Posts
The House Stabilization Hearings of 1928 proved conclusively that the
Governors of the Federal Reserve System had been holding conferences with
heads of the big European *central banks*. Even had the Congressmen
known the details of the plot which was to culminate in the Great
Depression of 1929-31, there would have been nothing they could have done
to stop it.

The international bankers who controlled gold movements could inflict
their will on any country, and the United States was as helpless as any

Notes from these House Hearings follow:
MR. BEEDY:" I notice on your chart that the lines which produce the most
violent fluctuations are found under *Money Rates in New York*.As the
rates of money rise and fall in the big cities the loans that are made on
investments seem to take advantage of them, at present, a quite violent
change, while industry in general does not seem to avail itself of these
violent changes, and that line is fairly even, there being no great rises
or declines.
GOVERNOR ADOLPH MILLER: This was all more or less in the interests of the
international situation. They sold gold credits in New York for sterling
balances in London.
REPRESENTATIVE STRONG: ( No relation to Benjamin ) : Has the Federal Reserve
Board the power to attract gold to this country ?
E.A. GOLDENWEISER, research director for the Board:: The Federal Reserve
Board could attract gold to this country by making money rates higher.
GOVERNOR ADOLPH MILLER: I think we are very close to the point where any
further solicitude on our part for the monetary concerns of Europe can
be altered. The Federal Reserve Board last summer, 1927, set out by a
policy of open market purchases, followed in course by reduction on the
discount rate at the Reserve Banks, to ease the credit situation and to
cheapen the cost of money. The official reasons for that departure in
credit policy were that it would help to stabilize international exchange
and stimulate the exportation of gold.
CHAIRMAN MCFADDEN: Will you tell us briefly how that matter was brought
to the Federal Reserve Board and what were the influences that went into
the final determination ?
GOVERNOR ADOLPH MILLER: You are asking a question impossible for me to
CHAIRMAN MCFADDEN: Perhaps I can clarify it - where did the suggestions
come from that caused this decision of the change of rates last summer ?
GOVERNOR ADOLPH MILLER:The three largest *central banks* in Europe had
sent representatives to this country. There were the Governor of the Bank
of England, Mr. Montagu Norman, the President of the German Reichsbank,
Mr. Hjalmar Schacht, and Professor Rist, Deputy Governor of the Bank of
France. These gentlemen were in conference with officials of the Federal
Reserve Bank of New York. After a week or two, they appeared in
Washington for the better part of a day. They came down the evening of
one day and were the guests of the Governors of the Federal Reserve
Board the following day, and left that afternoon for New York.
CHAIRMAN MCFADDEN: Were the members of the Board present at this luncheon
GOVERNOR ADOLPH MILLER: Oh, yes, it was given by the Governors of the
Board for the purpose of bringing all of us together.
CHAIRMAN MCFADDEN: Was it a social affair, or were matters of importance
GOVERNOR MILLER: I would say it was mainly a social affair. Personally,
I had a long conversation with Dr. Schacht alone before the luncheon, and
also one of considerable length with Professor Rist. After the luncheon
I began a conversation with Mr. Norman, which was joined in by Governor
Strong of New York.

(Mon Aug 04 1997 23:51)
all that glitters
WIZARD, The USD washed up on our beaches. Unfortunatly, I agree. The U.S. is going to get whacked in a big way. Not much time to prepare.

(Mon Aug 04 1997 23:53)
former: I met a man last night who had just returned from fantasy vacation ( ? ) aboard a Russian icebreaker. Said vessel is hired out to rich foreign tourists with a taste for the bizarre who wish to get to the northpole so that they may truthfully claim they have walked around the world, and such like. He said the ship was loaded with KGB people who had nothing better to do and were shipped off to the Arctic to keep them out of harm's way, or way's harm.

(Mon Aug 04 1997 23:58)
@the scene
Vieserre -- Service growth. True in the past, not so much anymore. You only need so many hamburger flippers, grass trimmers, laundromats, trinket stores and gas stations. Then it becomes the next niche that is overcrowded with little or no return on investment. Remember when the malls were half full with shoe stores? Many aren't anymore. Better to put your money in a bank earning simple interest. Less headaches too! As for the refrigerators, give it a little time. It's not like OUR manufacturers are done moving out of here! The day WILL come when I'm really going to laugh my ASS off as they all come to the realization that their market has died here and they didn't pay wages enough to make any NEW markets in their new Home Countries! I hope at the same time that we simply say, " We don't want you back", and, Oh by the way, money doesn't cross our borders. ONLY goods in exchange, ThankYou! See anything you'd like to take home with you?"

(Mon Aug 04 1997 23:58)
@ The PL
Nite All. Lights out here at the library. ....just hope that news conference in Japan doesn't turn the lights out on gold.