Niner, it may be a tease. However, this thing could unwind very fast and take all of you by surprise before you got time to think about it. The train is leaving the station and if your not in early you may not get onboard. A good example are those that missed the platinum market waiting for lower prices. The low could already be in on the gold, meanwhile most are waiting for lower prices. I say if you want in "GET IN" because you ain't getting in when it runs away from you.

RJ:

I know you're not feeling well today, so let me express it for you:

OOOUUUUUCCCCCHHHHHH !!!!!!!!!!!!!!!!!!!

Front: It's good to see that you have reassumed your previous handle. It is also good in the eyes of the many. ...... but what the hell do they know?

Also, your wrote: ".....it's an honour that few achieve but many want." ....... If such honor also requires the recipient to wear the much touted but less revered mantle of Kitco Guru, I think not.

If you will recall, back in the spring, I made the hasty mistake of opining that gold had made, at least a short term bottom. The number was 357 as I recall. Or thereabouts. In retrospect, the mistake was not in forming the opinion but in announcing it to the masses. Especially you. ... :- ) )

As a single rose does not make a summer and "3 2 5" does not validate a sage, so also the announcement of a 2 day truce in a secular decline should not warrant special honors. Unfortunately, this was a time when the site was short of men insufficiently schooled in the merits of total silence. .... ( ie, the fish and the hook analogy. ) ... To my immediate and long lasting chagrine, I would learn that I was to be counted among that steadily diminishing number. An honor of a different sort, I suppose.

Nonetheless, though personally deemed unworthy, it was but a matter of milliseconds before the wisdom that ordinarily passes for reason in Chez Kitco forced me to don the accursed garment. It was much like the last man to be hanged. Who said: " If it weren't for the honor, I'd just as soon pass on the whole thing". It has been said, by some fool or other, that "some are born to greatness and others have greatness thrust upon them". Idle and useless rationalization of unavoidable circumstance is more like it.

As most are, the honor was but for a brief and shining moment but its effects lingered for some time. Not in its measured effect upon my moral character. The term "reprobate" will remain unassaillable from any quarter. Rather, it has more to do with its the subsequent effect on my feelings of personal well being. The honor and evidence of office had previously passed from head to head. A fact that shall be attested to, anon.

The long and the short of it is, that as a result of a mere 48 hours in the cloak of Kitco Guru, it cost me the better part of 1 fine troy ounce, in potions, ointments, solutions and ardent biocides of various kinds, to rid myself of unwanted houseguests. Some were viewed with wonder by the entymology dept. at OSU. A few had previously escaped the catalogue. More than a few were seldom seen, outside of brothels in benighted regions.

I present this report, not in an contempt of my fellows, pillars of the community all, but rather to offer empirical evidence, attesting to the duality of man. Or at all events, most men. ie, we all have a dark side, don't we. But, I am distracted from the main topic.

In conclusion, I am hesitant to include George Cole's name in a report of such personal nature. For while no one is more deserving, than George, of the holding high honors and superior office as designated Kitco Guru; he is also entitled to hold said office alone.

Please pass that moth eaten rag through an acid bath before you send it to him.

Aurphile: please explain to this dummy how can real estate demand rise causing price escalation if interest rates rise also. wont rising interest rates dampen real estate demand and depress prices??? what am I missing here?

The gold is going to spike up to around $350 next week in the wake of financial trouble ahead, then settle back to around $335 for a few days until people digest if the trouble is really maybe not so serious. But, when things don't look good and start to get ugly, gold is going to be at $400 before you can say "GO LONG GOLD". If your short say good bye to your bank account.

Hey Dummy, Real estate is going north with all the money flowing out of equities. The fed will open the flood gates when the coming sell off ensues and maintain low interest rates for awhile in the near term. Interest rates will raise slowly over 2 years. They can't just step on the brakes otherwise all of us will be thrown overboard, unless they want a full blown depression. I think not.

8/8/97 -- 5:38 PM

Yeltsin takes to airwaves to explain ruble reform


MOSCOW ( AP ) - President Boris Yeltsin assured Russians on Friday that plans to change Russia's ruble would be painless, but later
conceded the currency reform could increase the money supply. That, in turn, could spur inflation.

Still later in the day, a central bank spokesman appeared to contradict the president when he said the money supply would remain
constant.

Yeltsin announced plans earlier in the week to issue new ruble notes in January that will be worth 1,000 times as much as the old ones.
Once the plan goes into effect, old 1,000 ruble notes, which will remain in circulation for a time, will be worth 1 ruble.

``Nobody is threatened by anything,'' Yeltsin said in his regular weekly radio address. ``By launching this reform, we are clearly stating
that we have defeated inflation.''

But later Yeltsin told reporters in Moscow: ``There will be two banknotes on the market, the old and the new. In the overall supply, we'll
have more banknotes.''

The reform is intended to simplify Russia's currency and signal that years of three- and four-digit inflation are over. With the ruble now
worth 5,800 to the dollar, a trip to the grocery store can involve tens or hundreds of thousands of rubles.

Inflation has been brought down to about 12 percent a year, and the government figured it was time to bring the ruble back down to
earth, even if it meant a year or two of confusing, dual currencies.

However, increasing the money supply usually causes inflation. Yeltsin insisted that wouldn't be the case, saying the the extra currency
``will help us pay more wage and pension debts.''

A Central Bank official, Denis Kiselyov, told reporters the new banknotes would be issued in amounts equal to the old banknotes
withdrawn from the market. He said that would ensure a constant money supply, the Interfax news agency reported.

The Central Bank operates independently of the president, and has adopted opposing policies in the past. Yeltsin has also occasionally
issued off-the-cuff statements that aides have later been forced to correct or contradict.

After the new ruble notes are introduced, they are to circulate in tandem with old rubles until 2002.

``The reform will make the ruble stronger and more reliable,'' Yeltsin said in his radio address. ``Even now, many people are keeping
their savings in bank ruble accounts, because it's profitable.''

``I'm sure the time will come when Russians will be proud of their ruble and will not exchange it for any dollars,'' the president said.

Many Russians prefer to keep their savings in U.S. dollars.

Yeltsin's political foe, Communist leader Gennady Zyuganov, blasted the planned reform as a ``hasty, premature, poorly-planned and
insufficiently calculated'' step that would only make ``the poor grow poorer.''

``There has not been a single Yeltsin reform in the past few years after which the people's wallets did not become thinner,'' he said,
according to the Interfax news agency. ``The public did not trust this government and does not trust it now.''

Okay you little dummy, here goes:

1. As interest rates rise, buyers eager to lock in low rates start to buy. Many have little to no money anyway and know that they won't be able to qualify for a bank loan as interest rates rise so they jump at the last chance to secure a mortgage loan. Thus more demand creates higher real estate prices.

2. Also, many people equate higher interest rates with rising inflation, thus the incentive to move money out of paper assets ( Stocks & Bonds, etc. ) into hard assets such as gold and real estate.

In the event of paper asset market meltdowns, then it's highly likely the big G would be stepping in to reliquify the economy by printing a massive amount of dollars on top of what they're already printing. And very probably hyper inflation would ensue with ever higher interest rates.

Yes, there would be a great number of foreclosures, but the Big G would continue to support the banks buy printing dollars and monetizing the debt. Sooner than later, the Big G's plan will have failed leading to a depression. Those with cash will continue to accumulate real estate at relative dirt cheap prices. The big dummies who bought at the onset of the inflation cycle will sooner than later lose their jobs and homes.

Can somone tell this Big Dummy what's wrong with this logic?

Hey you dummies, nobody said to hang on till the cows come home. There is a time to buy and a time to sell. Also, take control this is not a place for your frustrations. Get rest and plenty of exersize if you want to comunica...

August 8, 1997


Fed Committed To Curbing Inflation


Filed at 6:34 p.m. EDT

By The Associated Press

WEST PALM BEACH, Fla. ( AP ) -- A Federal Reserve policy-maker said Friday the central bank remains committed to keeping
inflation in check to keep the economy's seven-year expansion alive.

``We need to avoid making monetary policy mistakes which are usually caused by waiting too long to tap on the brakes,'' Jack Guynn,
president of the Federal Reserve Bank of Atlanta, said at a meeting of the Business Development Board of Palm Beach County. Guynn is
one of the regional Fed presidents who will have a vote Aug. 19 when the central bank decides whether to raise rates to cool off the
economy.

Financial markets stumbled Thursday and Friday amid fears that the economy is once more heating up to a point where the Fed will
tighten credit. The Dow Jones industrial average has fallen 228 points since hitting a record high Wednesday, in large part because
bond-market interest rates are rising on inflation jitters.

Guynn refused to discuss what the Fed might do.

He said he hoped the country would break the record of a 100-month economic expansion. At 76 months now, the current expansion is
the third longest since the end of World War II.

``I believe productivity is the key to the puzzle of our long-running economic expansion,'' he said. ``This good outcome should suggest
that we mustn't let inflation creep back up.''

He appeared to accept that the economy can achieve a mix of low inflation, low unemployment and strong growth.

``We need to continue to question and to test the conventional wisdom that seems to assume you can have either low inflation or strong
growth, but not both,'' he said.

Before his prepared remarks, Guynn warned the audience he might start to drool during his speech. He was recovering from oral surgery
and his mouth was still swollen -- but he offered another explanation.

``I feel good about the economy,'' he said with a smile, ``and it may be just a reaction.''

Hey Goldfinker:
Lighten up! No need to babble on.

"NO ONE" Thats right "NO ONE" has a crystal ball. This site was founded on the principals for individuals to express themselves and speculate into the future for entertainment purposes only. So have fun. This is not push and shove.

Whoever you are DUMMY? THE FINGER? I apoligize. Somewhere things got off to a bad start. You wanted your handle to be DUMMY so I refer to you as being the same. If I knew you would be offended by it this would have never taken place. Sorry for the postings.

John Disney:

Take it easy on the New York Times, John, they can't help it if the truth hurts.

For DJ - Yes it seems too low - I think we need to set
up a set of 10 subcutaneous equations ( they're getting
under my skin ) BUT they dont tell how much palldium,
rhodium, and nickle thet make. I think we are only
demonstrating to one another how hard it is to
establish the cost of one item when you are manufacturing
4 item simultaneously.
Anyway, I think rusplats platinum costs are pretty low.
In another post you said that their byproduct credit will
be 10 % higher this year but I suspect better since
palladium is up big time since last years average.
Do I dare to give you data on implats end 1996 report???
New one should be out soon - They give platinum
price received as Total revenue/Platinum produced only
and cost of making platinum as total costs/platinum
produced. They give you no way to estimate byproduct
credit and get results like 500$/oz plat revenue and
450$/oz platinum cost ( numbers are for example purposes
only )
I BELIEVE that implats cost are higher that rusplats
thus they should be more highly geared to an
increase in the platinum and palladium price.
What we SHOULD really be trying to do is estimate
the change in earnings/share this year over last year
for the various possible platinum investment alternatives.
Suppose I give you all the data for both implats
and rusplat/leplat/pp-rust and Northam. Maybe I can
construct the eps figure for last year for each.
You make the calculations - then I ask you lots of
questions - hehehehe - OK??

for Bernie@New York Times -

Actually, Bernie, I love the Times - The paper is VERY soft you
know.

Polls conducted in Hong Kong during the first days of the Special Administrative Region showed a general lack of special feeling about the transfer of sovereignty. No excitement about the ceremonies; no shock about the change of identity. It was life as usual, business as usual. I think that as long as people in HK continue to make good money they won't really give a damn who runs the govt.

Chinese officials reiterated that Hong Kong would continue to function as a window and a bridge between the mainland and the world, and its position would not be replaced by any other mainland cities. Hong Kong would enjoy a high degree of autonomy in its import and export business and would maintain a tariff system separate and independent from that of the mainland.

The key to HK is the property market, which is far more manic than the US stock market, and the key ( short term ) to the property market is US interest rates. The reason is, of course, the fact that the HK$ is "pegged" to the US dollar which in turn requires HK interest rates to be maintained in line with US rates. Friday's sell-off in the US bond market will probably lead to a few hundred points being lopped off the Hang Seng on Monday, with property stocks being the hardest hit. A further and more substantial sell off in US debt could precipitate a property market crash in HK.

One big advantage that HK has is its foreign exchange reserves. Hong Kong has jumped to fifth place in the rankings of the worlds top foreign exchange reserves, which were boosted to over USD82 billion at the end of June. Hong Kongs ranking is up from seventh in the world, leaping the United States and Singapore but remaining behind Japan, the Mainland, Taiwan and Germany. These reserves should at least protect HK from the currency turmoil which is engulfing the rest of SE Asia.

China's most immediate concern is to gain entry into the WTO. Look for an announcement on China's WTO entry to be made during Jiang Zemin's visit to the US in October to meet Clinton. Such a photo opportunity may prove to be irresistable to Clinton.

Cheers, Milhouse

To Front, formerly known as David, formerly known as Front : Welcome back !

To All : Friday's gold price move was insignificant in terms of telling us anything about the near term price direction. IMHO, there is still a 50% chance that we will see gold hit new lows and the stock market hit new highs. However, Friday's action was extremely significant because it provides further evidence that gold is still considered a store of value and a hedge against inflation. It is looking like George Cole will be proven to be 100% correct, not because he has predicted the value or timing of a stock market peak, but because he has correctly predicted that the stock market peak and the gold market bottom will coincide.

Cheers, Milhouse

Port Wine And Foie Gras

by Juneau Hu

Europe appears to have ended the long period of fiscal austerity to prepare it for monetary union. Germany now has had all the austerity it can take. This same Germany had loudly proclaimed that it would not tolerate any gimmicks softer-currency nations like Spain or Italy might use to meet the convergence targets. ( These targets include budget
deficits under 3% of GDP and government debt under 60% of GDP. )

Now Germany is battling over an attempt to revalue its gold reserves to fudge the numbers. And if Germany fudges a
little for EMU to proceed, greats vats of fudge will be whipped up in the fiscal kitchens of Italy and France. Belt loosening will follow a bulging budget waistline just as earlier austerity gave Europe a seemingly svelte look.

It reminds me of Chancellor Kohl's annual spa retreat to take off 10-20 pounds. The aim is not permanent weight reduction, but merely preparation for another year of hearty feasting on Good Frau Kohl's heavy cooking.

Kohl is the longest-serving German Chancellor since Bismark. Both unified their country, Bismarck under Prussia using
arms, Kohl under Bonn using money. Bismarck, who weighed 260 pounds, was put on a strict diet by his doctor, but Countess Bismarck used to sneak dietary supplements to her spouse under her skirts, like port wine and foie gras.

Similarly, Germany's period of half-hearted dieting has come to an end and the refrigerator doors of consumption are
now swinging open. And not only in Germany.

Politicians all over Europe realize that further diets will lose them elections. They fear suffering the fate of the British Tories and the French Gaullists. In politics, austerity pays only when everything else has been discredited.

Emerging markets investors face a hearty buffet from European embonpoint. The credit quality premium over emerging markets European bonds were awarded is the only thing likely to get slimmer now. Convergence will follow too from the improvement in emerging country finances that will result from faster global growth-an outcome of easier conditions in Europe.

While growth will put pressure on interest rates, this will be felt mainly on the short end of the yield curve, and mainly in low-rate Europe and Japan. The increased liquidity generously provided by the central banks of Europe and Japan-for now-means a buffet bash at the high-yield high-calorie emerging bond markets.

Mr/Mz Hu:

I don't get it.

I know we are all eager to take advantage of the up comming 2000 Gold Rush, It's one of those sure things that come around every millenia or so, but what has changed here day?. The equity picture looks the same! exponential gains take exponential profit taking dips when they run out of steam, and then they take another breath. It was a good day for Gold, not a rip Financial space. That was to easy.

Goldfinger; if this market crashes; it will probably be as the result of the high interest rates to keep those foreign deposits in US Treasuries from completely flying the koop.
With most people, uncertain as they are now; why under such a scenario, will people buy realestate? Do you believe the opinion polls? The stock market is the only hope; and thus why DC is behind it.
I think we also have to consider the present private debt levels which are relatively high and may not be paid back.
Further real property carries with it the burden of upkeep and taxes, which may further dampen its demand.
More likely, real estate will fall from its presently inflated prices and become attractive when all the expenses associated with it are much more reasonable.

Mr/Mz Oprah - what's a "not a rip Financial space" mean?

I don't get it?

Are you a Bull, Bear or a Pig on Gold?

Goldfinger; if this market crashes; it will probably be
as the result of the high interest rates to keep those
( SHORT TERM ) foreign deposits in US Treasuries from completely flying
the koop.
With most people, uncertain as they are now; why under
such a scenario, will people buy realestate? Do you
believe the opinion polls? The stock market is the only
hope; and thus why DC is behind it.
I think we also have to consider the present private debt
levels which are relatively high and may not be paid
back.
Further real property carries with it the burden of
upkeep and taxes, which may further dampen its demand.
More likely, real estate will fall from its presently
inflated prices and become attractive when all the
expenses associated with it are much more reasonable.

[Ave, Earlei; es imperator Kitcoensis. Vendor et emptor, torus et ursa, te salutant!]

Barb-ette: "...animated fuzzy things."? Are you sure it wasn't Lou's usual table?

Vale.

Stockies, bondos and goldbugs alike are completely snowned by the mountain of statistics that eminate from the Nations Capital and various the Think ( stink ) Tanks, every day; to their own confusion.
When we have many trillions in debt, both public and private; my personal feeling is "THAT THE LAWS OF ECONOMICS NO LONGER APPLY" and to fool with these principles only makes matters worst. While nothing at all is certain GOLD, A TENT AND A FOOD SUPPLY is the best bet. Hey maybe they'll bribe us with free food.

Well lads, finally had a few go our way. Juneau Hu has brought up an issue that has been on the back burner for a while. The problems with Europe and the EMU have not gone away. I agree that Germany, France, and Italy will start firing up them printing presses. IMHO, the pace of events will happen more quickly now. What better place to watch than ringside, right here at Kitco!

Either the English Pound was too high, or inflationary signs were to great.

They raised rates and their currency fell.

This is contrary to the actions that the world bankers would expect from a G7 currency rate rise and could be a good part of why gold moved nicely on friday.

Good Mornin Kitcoites! Gold soared overnight......in muy dreams!..Re-Pound Sterling: Yes,they raised their rates a quarter point BUT the expectations were for a HALF point rise and they also indicated they may NOT be doing more raising in the near future...

JUNEAU Hu: "In politics, austerity pays only
when everything else has been discredited"

Your 3:32 post had this very perceptive thought. I would like to add that austerity will arrive for politicians only after it has arrived for the public in general. In a democracy we elect people who are just like us, at the time the election takes place. If we are spendthrift at home we are likely to elect spendthrift leaders. It is when the majority sees the virtue of austerity for themselves that they will elect leaders who mirror their newly acquired views. I am afraid that it will require a significant economic event before that happens.

Another point of view:
Richard Russells Newsletter ( California ) 16th July, 1997

GOLD: During the great bear markets of 1929-1932 and 1937-38 and even 1973-74, it was clear that those people who owned their own private businesses enjoyed a huge advantage over those investors who owned shares of a public business via quoted stocks. The advantage was that private businessmen didnt have to suffer the stomach-churning experience of watching the stocks of their companies going down the drain.

Many subscribers own actual gold in the form of gold coins such as Maple Leafs, Krugerrands, American Eagles, etc. These coains are ( or should be ) held as insurance against disaster, and I guess it would be better if coin owners didnt even look at the price of gold - which unfortunately, has been swooning. Gold coins shouldnt be held for profit, they should be held as INSURANCE. Every paper currency in history has ended as a museum curiosity; gold alone has lasted through the centuries as money. The price of gold could be 300 next month, 280 by December and 600 by the year 2000. Obviously, nobody knows, but since gold coins are a form of timeless wealth, they should be held to your very old age and then handed down to the kids or grand-kids.

As for gold stocks, ah, thats a different story. Nobody holds gold shares for insurance, or at least they shouldnt. Gold stocks are a leverage play on a rising price for gold.

On July 3 we received news that the Australian Central bank sold 167 tons ( $1.7 billion ) of gold. On the news, gold tumbled. By July 7, the August gold futures contracts had dropped to an intra-day low of 4.18. A bad day for metals all round.

Its clear that todays new group of Central bankers are willing to swap gold for paper. Gold-philes call it a "conspiracy", I call it ignorance or stupidity.

The Founding Fathers of this nation introduced a stable money system that was MOST EMPHATICALLY NOT BASED ON DEBT. The purpose of this system was to avoid the debasement of the nations money. In other words, the system was created to establish a money that people could trust, a money with INTRINSIC VALUE. In that way the greatest and most insidious tax of all, inflation, could be thwarted. With the creation of the Federal Reserve, the intentions of the Founding Fathers were circumvented.

It is possible that in selling huge quantities of gold, the various central banks are seeking to discredit the metal. Thats the conspiracy theory. Of course, the other possibility is that the central bankers have finally swallowed their own propaganda, and they honestly believe they are better off with interest-paying paper than with intrinsic-value gold. I have no way of knowing. I only know what is happening.

At this point, every gold-follower is wondering whether we have seen the lows for the gold complex or whether there is more to come.

What interests me is that we could have seen an "exhaustion gap" of the downside, three days of trading at the lows, and then another gap but this time the gap was to the upside. The result is whats termed an "island reversal". This means that the three low days are separated by gaps on both sides. Island reversals often identify the end of a move ( either up or down ) , and in this case it is hoped that this island reversal with an extreme intra-day low of 85.79 recorded on July 7 marks the end of the bear market in gold. What would confirm that the lows have been seen? If XAU closed above 98, I would say that two to one we have seen the lows.

SHARE MARKET: A NEW ERA? If, following this bull market, we have an extremely mild bear market, and then a new bull market is born, we will be able to say that "something new" has occurred. We will be able to say that because all stock market history tells us the BIG bull markets are followed by BIG bear markets.

All history tells us that this bull market "should" be followed by a hair-curdling bear market. If that doesnt happen, then yes, something has indeed changed, and the law of actions and reaction in the stock market has been suspended or negated.

I expect that this bull market will keep advancing - up and up until the buyers are totally exhausted.

The end wont come on a news event, the end wont be signalled by some technical signal or a non-confirmation or an announcement by the Fed: no, the end will come as THE MARKET TOPPLES OVER AND FALLS OF ITS OWN WEIGHT. Once toppling over , I expect the ensuing bear market decline to be as relentless and persistent as has been the rise since 1990. I dont expect a crash, but rather a stubborn, day after day, seemingly endless decline.
There you have it - the Russell view of things to come.

Good Morning Ted: I think our weather man has a side job of making gold forecasts. We had rain during the night and none was expected. It is still dark here. I will head out to look for Barron's soon.

BERNIE: Even the NY Times management will not deny their liberal bias, but then aren't we all biased, more or less. At least they have their token, Mr. Safire, and the WSJ has theirs, Mr. Hunt. ;- )

DONALD: This article is for you!!!
AT THE HEART OF AUSTRALIAS PROBLEMS: By Bob Santamaria ( Aged 80+ )

"I cannot recall a period in the last 20 to 30 years" said Prime Minister John Howard last month, "When youve had such a fortunate conjunction of low inflation, falling interest rates, expanding growth, strong business investment and falling Budget deficits, and a very positive international economic climate. You take these five or six things together and you have an underpinning and a base for employment growth the like of which we havent seen for the last 20 years. ( Age, July 17, 1997 )

This may or may not be true. Unfortunately, people dont believe it.

Despite more than 20 consecutive quarters of alleged economic growth, more than 25% of male full-time jobs, adjusted for population growth, have been lost since 1970, and remain lost. The number of long-term unemployed, 245000 ( of 18 million population ) , is now the highest it has been in 26 months. The main source of income for one in every three adults is now a government welfare payment. Welfare is no substitute for work.

It ought by now be clear that the economic policies which have led to this situation should be changed. "Industry policy" which worked in the case of Kodak but not in that of BHP - is far from a universal panacea.

In this situation, consideration might be given to a proposal which has the prospect of replacing many thousands of full-time jobs lost, especially among the unskilled: namely a national program of public works similar to that executed during the war by the Allied Works Council, under the initial direction of the late E.G. Theodore.

Australias stock of infrastructure has been valued at approximately $400 billion, of which 70% is economic ( roads, railways, water & power supplies ) and the remainder social ( hospitals, schools, public housing ) . Lack of investment in both sectors has caused a serious level of deterioration. In addition, there are major works like the development of North-West Australia, once dismissed as uneconomic, but now with a different prospect due to the economic growth of East & South East Asia, and the development of food shortages consequent on population growth. The International Rice Institute, for instance, estimates that world rice production must be increased by 70% to avoid future famines like that in North Korea. ( Guardian Weekly, 20th July, 1997 ) .

The critical problem is the method of financing such a program, since it is axiomatic that both increased tax and/or increased debt should be excluded. When the world was caught up in the consequences of the crash of 1933, J.M. Keynes stated boldly that the level of interest rates was the key: "it is to our own best advantage" he wrote "to reduce the rate of interest to the pointat which there is full employment". The extent of the reduction in interest rates which such a program would demand is much more than anything contemplated today.

UNEMPLOYED;

Such a program requires the expansion of repayable loans by the Reserve Bank at a rate as low as 1% - to cover administration expenses - until the number of unemployed has been reduce to a level of no more than 3% of the working population. This would offer a sufficient margin of safety against the onset of inflation. The downward movement in the number of unemployed would serve as a measuring-rod for both the size and the duration of the program.

This suggestion can be justified in both theory and practice.

As to theory, the Report of the Royal Commission on Banking ( 1937 ) in Australia stated that the Central bank "can lend to the government or to others in a variety of ways" and "can even make money available to the government or others free of charge." Asked to clarify the meaning of this statement, the chairman of that Commission , Mr Justice Napier, replied:

"This statement means that the Commonwealth ( now the Reserve ) Bank money available to governments, or to others, on such terms as it chooses, even by way of loans without interest, or even without requiring either interest or repayment of principal".

As recently as January 14, 1997, Dr Alan Greenspan, Chairman of the US Federal Reserve, advanced the same principle:

"Central banks can issue currency, a non interest-bearing claim by the government, effectively without limitTo be sure, if a central bank produces too many, inflation will inexorable rise as will interest rates, and economic activity will inevitably be constrained by the misallocation of resource induced by inflation. If it produces too few, the economys expansion also will presumably be constrained by a shortage of the necessary lubricant for transactions. Authorities must struggle continuously to find the proper balance".

This principle has been put into practice on many occasions. The US New Deal was financed by Roosevelt through the Reconstruction Finance Corporation which was established by his predecessor, Herbert Hoover. It advanced $15 billion "to provide emergency funding for financial institutions to aid in financing agriculture, commerce and industry", playing a major role in pump-priming the recovery. Even greater resources were made available through the Farm Credit Administration. ( Davies: A History of Money, University of Wales Press, p.511 ) .

Britain financed its participation in World War II at an average of 2%. "The key to the structure" writes Davies ( p.390 ) "was the stabilisation of the Treasury Bill rate at 1%".

The Commonwealth Bank, established in 1911, financed the building of Australias East-West railway from 1913 to 1917, at 1%. The Bank of Japan is today advancing credit through to the commercial banking system at one half of 1%. There are thus very clear examples of what other countries have been prepared to do when faced with emergency situations, as we are today.

A program of recovery admittedly involves programs more complex and varied than the single question of interest, but the rate of interest and the monopoly control of credit by private institutions lie at the heart of our problem.

NOTE: Bob Santamaria grew up during the 1930s. experiencing the savages of the Great Depression in Australia.

To Americans: If you're tryin to think of a good place to take a vacation come "up North" and take advantage of the LOW Canadian Dollar ( 71.94 ) or in other words ya get approx. 139$ Canadian for your 100$...On my recent visit to the states I was amazed at how much more expensive groceries were than back home in Canada...Many items were priced close to the same price which translates into a 39% discount...As many Canadians will attest to,we have our own ridiculous taxes ( BST..ect..ect.. ) BUT there are many hidden ( or not so hidden costs ) to livin in the USA,such as the absurdly HIGH property taxes ( at least in VERMONT ) where you get NOTHING for your hard earned money....Hey,at least we get FREE garbage pick-up...
Come on up but when ya do don't forget ta bring your one bottle ( per person ) of liquor with ya....One of the few things that is more expensive here but if ya know the "right" people there are ways around even that!
"Newfie Screech"....

Asia-Pacific: Tokyo reverses firm opening
to end 1.2% lower

Originally published: FRIDAY AUGUST 8 1997

By Gwen Robinson.

TOKYO tumbled as the decline in Nikkei 225 index futures prompted
arbitrageurs to pull out of cash stocks.

The Nikkei 225 average slid 226.22 or 1.2 per cent to 19,475.85 after
trading between 19,336.14 and 19,772.18. Trading began on a firm note
as domestic and foreign institutions carried out large basket-style
purchases. Banks rebounded following the previous day's report that the
government will allow banks other financial institutions to issue perpetual
bonds.

But the upward momentum was soon lost once Nikkei index futures
started to slide in Osaka, which sparked fresh bouts of profit-taking in the
cash market. The 225 index slid further in the afternoon as securities
houses sold construction-related stocks on growing concern about the
sector's financial health.

Volume eased from 392m shares to an estimated 378m. Declines
overwhelmed advances 869 to 228 with 155 unchanged. The Topix index
of all first-section stocks fell 10.53 to 1,497.18 and the capital-weighted
Nikkei 300 was down 1.80 at 293.03.

General contractors continued to suffer from concerns about the poor
earnings outlook in the face of cash flow problems and planned cuts in
public works spending. Aoki fell 7 to 60, Fujita 21 to 95, and
Shimizu 30 to 570.

Many blue-chip exporters saw profit-taking after the previous day's gains.
TDK slid 90 to 9,900, Kyocera 270 to 9,530 and Pioneer Electronic
160 to 2,740. Honda fell 110 to 3,680 and Toyota 10 to 3,250.

However, Sony rose 200 to 12,100 and Nikon 90 to 2,360.

Banking issues gained ground. Long-Term Credit Bank of Japan, the day's
most active issue, rose 36 to 570 in spite of news that Moody's Investor
Service had downgraded its senior debt rating. Industrial Bank of Japan
rose 20 to 1,680 and Sakura Bank 17 to 735 on active buying by
foreign brokers.

Ahead of today's listing of Fuji Television, broadcasting issues were
popular. Nippon Television Network rose 600 to 47,600 and Tokyo
Broadcasting System 60 to 2,020.

Among leading securities houses, Nomura Securities was the only winner,
rising 20 to 1,700, while Daiwa Securities fell 28 to 760 and
Yamaichi Securities 14 to 238.

In Osaka, the OSE average fell 162.96 to 20,225.85 and volume eased to
13m shares.



SYDNEY closed lower following a shake-out for resources leader BHP.
The All Ordinaries index came off 9.4 to 2,717.7. BHP fell 55 cents or 3
per cent to A$17.44 on news of management changes. Brambles gained
A$1.13 or 4 per cent to A$29.11 following sparkling results from joint
venture partner GKN of the UK.



JAKARTA fell steeply as higher interest rates and new rules for retail
investors hit sentiment. The composite index ended 21.92 or 3.13 per cent
lower at 677.94.

The wave of selling prompted a confidence-boosting visit to the exchange
b Mr Marie Muhammad, the finance minister.

The central bank tightened monetary policy in an effort to stave off an
attack on the rupiah.

New margin finance regulations for retail investors also fuelled bearish
sentiment.

Brokers said rights issues over the next few weeks had added to the
market's woes.



KUALA LUMPUR was plagued by rumours that played havoc with a
market already worried about the economy. The composite index shed
23.41 or 2.5 per cent to 928.33.

Rumours that the central bank governor and the finance minister were to
be replaced were denied.

There was also talk that a large pension fund, which had been propping up
the market with its buying in recent days, had hit the ceiling for the amount
of money it could invest.

It all helped depress sentiment that had already been damaged by recent
news of a widening trade deficit and aggressive central bank moves to limit
currency speculation.

Malayan Bank shed 30 cents to M$22.60, Telekom Malaysia lost 30
cents to M$9.00 and United Engineers was down M$1.00 at M$16.20.



MANILA paused for breath after climbing for eight sessions. The main
index closed 24.78 lower at 2.670.01 in thin volume. Brokers said
profit-takers shrugged off lower interest rates as they believed a correction
was due.



HONG KONG extended its record run in best-ever volume. The Hang
Seng index rose 131.67 to an all-time high of 16,673.27 in turnover of
HK$34.2bn.

Property stocks continued to lead the way, with Cheung Kong rising
HK$4.75 to HK96.75 on 11.7m shares traded. Among smaller caps,
Great Eagle gained HK$1.35 to HK$29.55 and Shun Tak 25 cents to
HK$4.875. In banks, HSBC added HK$2.00 at HK$271.

Alpha General made a firm debut, rising to HK$1.32 before closing at
HK$1.17, against a flotation price of HK$1.00.



SINGAPORE closed lower on rumours that the government was planning
to scrap the dual listing system for foreign and local tranche shares.

The Straits Times index ended off 5.38 at 1,953.24. Hongkong Land was
again active, closing up 2 cents at US$3.42 on 20.9m traded.

Mornin Donald! We have a brisk East wind with nothin in the forcast but clouds and showers for the weekend....We've been a real drought so it's needed though....I miss Barrons ( in print ) and will have to satisfy myself with the "net version"...My Saturday subsitute for it is the Globe and Mail ( toronto ) business section which is a good read....even if their NYSE listings aren't totally complete and typically many of my stocks are so small and obscure that they aren't listed....Like PNY,BGC,SAJ ect..ect...

Earl ( 00:26 ) You took the words right out of my mouth....but bein a "nail pounder" for 25 years .....I couldn't spell em let alone say em...Are you near Lake Oswego???

Niner ( 23:44 ) Bein in stox myself,I think you very well could be right...
I still don't think the END of the world is commin and until Exxon ( ect ) drops or eliminates their dividend,I'm only buyin more shares naturally through DRIP....cause I am a DRIP!...On other important matters: DONALD: I USED to have this site all to myself early Saturday mornins and USED to have some very intellectual conversations with myself before YOU showed up....but ALL good ( and bad ) things come to an end...eh...

Barrons ( net edition ) is NOT out yet so don't bother lookin fer it!

While we most likely have entered a bear market for financial assets and a bull market for gold, this is not yet 100% certain. Spot gold need to break through chart resistance at $330 with conviction. And the next stock rally should fall considerably short of 8300. But the fact that this latest stock drop was accompanied by a strong gold rally makes it very probable that the tide has turned.

I do not expect much public selling of mutual funds until the Dow Industrials drop more than 10%. The summer 1996 and spring 1997 selloffs were contained at that level. But once stocks drop by more than 10%, downside action will accelerate for equities. And gold's rally will gather steam.

To : Steve - Perth
Steve - re Bob Santamaria's article on interest rates. I thought it was strange that Bob would cite 1930's US and 1990's Japan as examples of the use of low interest rates to stimulate economic recovery, as these examples demonstrate the failure of this policy. Low interest rates in Japan have simply pushed Japanese investment overseas and penalised those Japanese who save money. IMO the fundamental problem in Australia is a taxation system which removes the incentive to work and to invest.

Regards, Milhouse

Anyone else "out there" like the CNN North American Satellite Image site?
Being a weather FREAK,it's one of my favorite stops on the net...Can tell ya somethin about grain futures and thus gold to a degree...

JEB: On July 18 I posted that platinum ( then at $394 ) "must knife through congestion between 400 - 410." If it did so, I saw next resistance at 430-435. It did so, and reached 435 on August 1. Subsequently, I posted that if Pt could take out its previous hi of 475ish, it could go to 500-600. Mars conjuncting Neptune in the horoscope of the NYSE on Friday thru Monday signified excited action in Platinum and crude oil to me ( a phenomenon I flagged a week a go ) . Naturally it also shook the NYSE ( stock market surrogate ) in general. I would therefore expect some follow through on Platinum Monday. But Mars is a relatively fast moving planet, and the angular aspects it makes on a chart are relatively short-lived. All I'm saying is that by mid week Mars' influence on NYSE Neptune will be passing. Platinum looks like a hold to me. It has made a major breakout from a longterm downtrend, has made a return move to test that breakout, and is in a very excited graphic price chart configuration. Now that the return move has been successfully completed, there is reason to expect the next high to be above the previous breakout spike around 475. It is like a wild alley cat right now, and any extra bullish factor here can drive it much higher. As RJ pointed out last week, the actual efficiencies of industrial use of Platinum allow a little to go a long way. The price can be very elastic before substitutes are sought, or use is curtailed. Reason would require you stand back for a while and hold fast.

How fitting that Barron's had a cover story on superbull Ed Yardeni last week at what was most probably the bull market peak.

Trading scams on the rise. Much more to come as bear market gathers steam:




August 9, 1997


Currency Trading Scam Leaves Investors Holding the
( Empty ) Bag

By EDWARD WYATT

EW YORK -- Jin Ming Chen, a 46-year-old Chinese immigrant, showed up Friday
morning at a Manhattan office building, looking for his life savings.

But when Chen, a garment worker from Brooklyn, knocked on the door of the AEL Fund Inc.,
a currency trading company in which he had invested his entire nest egg of $41,967.03, there
was no answer.

Since Tuesday, the office has been closed and locked, and no sign remains of the millions of
dollars invested in the fund over the last year by dozens of investors from across the country.

Chen is not the first person to come looking for Alex Efrosman, the 35-year-old Russian
immigrant who law enforcement officials say was chief executive of the AEL Fund. Twice in
the last year, currency trading companies in which Efrosman was a top executive have been the
target of federal proceedings charging that the companies defrauded investors.

At a time when profit-hungry investors are funneling billions of dollars into almost anything
that has the word "fund" in its name, the story of Efrosman and the AEL Fund provides a cold
dose of reality about just how easy it is for otherwise sensible investors to be tripped up by
fraudulent financial schemes.

Moreover, Efrosman's case demonstrates how difficult it is for law enforcement officials to
stop securities con artists, even when they are caught, from reopening under another shingle
and preying on other amateur investors.

While no governmental authority keeps detailed numbers, law enforcement officials say that
schemes involving currency trading are on the rise, replacing precious metals as the commodity
of choice among investment frauds.

In particular, there has been a growing awareness of the currency market, as large companies
increasingly try to minimize the effects of changes in the value of the dollar against foreign
currencies and as speculators like George Soros make headlines. At the same time, the gold and
silver markets, once the favorite arena for professional speculators, have been moribund.

"We've seen a lot of currency scams lately," said Andrew Kandel, head of the investor
protection division of the New York state attorney general's office.

Some law enforcement officials believe that currency schemes have increased since a U.S.
Supreme Court decision in February removed the Commodity Futures Trading Commission
from regulating certain parts of the foreign currency market, leaving it unclear under whose
purview companies like the AEL Fund fall.

Even with the stock market gaining more than 40 percent in the last year, many investors were
attracted by the siren call of profits of more than 30 percent a month, which they said had been
promised by AEL Fund salesmen. Now, the U.S. attorney's office and the Manhattan district
attorney's office are investigating the AEL Fund and its disappearance.

Warren Meyers, a Los Angeles investor, said that although he was initially wary of the AEL
salesman who contacted him through a cold call, he was impressed by the glossy brochures,
financial history and sample account statements that were sent to him at his request.

When Meyers invested $10,000 in June, "I made more than 31 percent in one month," he said.
In July, he asked for, and received, a check for $3,115 in profits. Confident that the AEL Fund
was on the level, Meyers sent in another $20,000.

Chen said he first heard about the AEL Fund in an advertisement on a Chinese-language radio
station. He went from his home in Brooklyn to the fund's offices on the 15th floor of the Fisk
Building on West 57th Street, and everything appeared legitimate to him.

But beginning early this year, shortly after the AEL Fund moved into its 3,500-square-foot
space, neighboring companies in the Fisk Building began looking askance at the shabbily
dressed, uncouth people who represented themselves as currency traders.

"They were out of control," said Arnold Angrist, a chiropractor whose office is down the hall
from the AEL office, now empty. "They were screaming and cursing in the hallways. It was
obvious they were not the real thing."

On Tuesday, many of the firm's salesmen showed up for work, only to find the office locked, a
sign on the door saying "Office Closed." By Wednesday, the phone was disconnected, and a
steady stream of investors began to show up looking for their money.

Law enforcement officials say that building surveillance cameras showed two people, a man and
a woman, removing boxes from the building Monday night. George P. Fabian, building
manager for the Fisk Building, which is managed by Helmsley-Spear Inc., said the AEL Fund
was still on its tenant rolls, but he declined to comment further.

Perhaps it was mere coincidence that the AEL offices were abandoned just days before the
Commodity Futures Trading Commission on Thursday filed an eight-count administrative
complaint charging Global Currencies Ltd., a separate company co-founded by Efrosman, with
selling illegal foreign currency futures contracts in 1994 and 1995.

According to the complaint, Efrosman, who has never been registered with the commission in
any capacity, shared responsibility for day-to-day management of the company for four months
in 1994 and 1995. The complaint also names as defendants three other individuals, including
two other co-founders of Global Currencies.

Currency futures contracts are a method of speculating on the direction of currency exchange
rates; they give the buyer the right to buy a certain amount of a given currency at a set price at
a designated time.

John Fahy, a lawyer with the law firm of Waters McPherson McNeill, who said he was
representing Efrosman but not the companies or other individual defendants, said Friday that he
had not yet seen the commission's complaint and declined further comment.

Efrosman, whose last known address was on the Upper East Side of Manhattan, could not be
reached.

Even before this week's complaint against Global Currencies, Efrosman had drawn the attention
of federal securities regulators. In October, the CFTC obtained a preliminary injunction against
and froze the assets of Worldwide Currencies Inc., a New York trading company.

According to an affidavit filed in the case, Efrosman was Worldwide's president and an owner
of at least 10 percent of the company. Efrosman was not, however, named as a defendant in the
case.

So when Efrosman began running the AEL Fund late last year, individual investors had little
chance to learn about his past. Certainly it was not mentioned in the sales literature given to
Chen and other investors, which described the AEL Fund as an expert in the trading of foreign
currencies like the Swiss franc, the Japanese yen and the German mark.

Chen's 14-year-old daughter, Qiyu, who accompanied him as a translator on his pilgrimage to
AEL's offices Friday, said there was never any mention of such potential problems, and the
account statements mailed to Chen each month never showed a loss of more than 3 percent of
their investment. Rather, the statements showed their savings had grown to more than $69,000
in little more than three months.

"My mother works every day and weekends, too, to save money, and we put it all in the AEL
Fund," Miss Chen said. "Now it's gone."


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Copyright 1997 The New York Times Company

Alan Abelson, in his Barron's column, has some whitty things to say about gold. Also, he must be a lurker at the Kitco site because he references the Dow/Gold Ratio.

TED: Mornin! Nice day here, it seems. Out to Montauk w/theMissus later. GOLDFINGER: I beg to differ with you. I DO have a crystal ball. I just don't use it except for decoration. I 'm an astrologer ( :- ) ) . STEVE: Russell's viewpoint very comprehensive. Thanks. AUROPHILE: ( 22:52 ) Speaking of comprehensive, I loved your concise turn of decade newsletter. Worth the entire subscription price ( :- ) ) JIMMY ROGERS: Get online man! Here's my icon of YOU: ( :+ ) ) %

http://cnn.com/WEATHER/NAmerica/satellite_image.html

RON JETT: Most important of all...thanks for the new charts. Looks like XAU ready to ROCK N' ROLL!!!

Mornin Mike! For Christ sakes check out the satellite image ( previous post ) before you leave....Have a great day "out there"!...Good call by Jimmy Rogers yesterday at 8 ( EST ) when he said he had shorted the long bond...and several weeks ago he went long on the YEN...He's got a site ( connected to Worth mag ) but he infrequently updates...Do you want it?? Loved his book "Investment Biker"...

MILLHOUSE: Yep. This crossed my mind while I was posting the article. However Santamaria, the eternal prophet, is usually a bit ahead of his time as usual. When the rest of the world catches up to Japan, his remedy will still be the only answer out of the coming Depression, and there won't be any convenient temporary escape hatches for the Banks to use ( ala Japanese money going via US ) . We will all be in the manure together. The Asian currency problems are only the beginning. Am not sure about Roosevelt. Have heard various view points. The main issue is how Australia issued credit at virtually nil interest early this century to keep confidence up. Unfortunately the rentier class won't permit it until is far too late. If they had any brains, they would allow some majore govt infrastructure projects at low rates to stimulate the economcy. At the moment, interest rates are dropping at the expense of the unemployed ( high rate ) .

The high tax rates are a problem. It is the shameful legacy of a bureaucracy gone mad in Canberra. I am amazed at how low the HK tax rates are, but I wonder if you provide the same degree of social benefits as in Australia to ALL of the HK citizens. Also, how many low income earners are being "used up" on the China mainland to maintain HK's high standard of living? Also, there is a lot of hot lending going on up there. For example, note how KIA motor co in Korea was lent money to the tune of 500% debt to equity. Unbelievable. Economies will always look good with hot lending like that. Just thoughts that crossed my mind last week when considering the issue of very low tax rates in HK. Undoubted our system, including Capital Gains Tax, Fringe Benefits Tax is punitive to business.

I had to laugh! Our High Court finally ended the States from collecting taxes on tobacco & fuel. H.O. Wills ( Tobacco Co ) suspended trading on Australian stock exchange & shut down production of Cigarettes for two days until issue clarified. Unbelievable! A bit like turning off the mains on all the Water Dams for two days ( for smokers ) . Australia is limping along, but needs a major overhaul. I asked Treasurer Peter Costello a direct question about an inquiry into our Superannuation & tas system a week ago, & he just went to water, taking the typical treasury line saying we can't make too many changes. They might upset all the left wingers living in Sydney & Melbourne, & lose the next Federal Election ( December 1998??? )

OUTLOOK:
I can see some very early signs of lack of confidence already in the Perth Metro area. Low socio-economic area large shopping centre boutique tenants going broke, & their shopping centre shops empty. This has not spread right across Perth yet, however. Just wait. Last week large property analyst co. claimed Retail shops in Australia 35% over-valued. Quite likely so.

TED: Thanks. I saw Rogers' Worth site. His stuff is always meaty and "worth"while. But you're right, the magazine doesn't update it much.

Barron's Items: Michael Santoli attributes the Friday slide to " a glut of new Treasury supply, word of Asian bank selling and more evidence of a strengthening economy"

Randall Forsyth talks about dollar weakness as the cause: " A weakening dollar and excessive money growth supposedly are old-school worries deemed irrelevant to the new paradigm of technologically driven growth. Suddenly, the currency and capital markets aren't so sure."

STEVE - PERTH :
Thanks for the interesting comments on Australia. I have an investment property in Perth and I keep getting conflicting views from various sources about what is happening to the Perth residential property market. You paint a fairly bleak picture which I suspect is quite accurate.

Korea and Hong Kong are both in Asia, but that is about the only similarity. Hong Kong still has ( I think ) a British legal system and the closest thing to a free market economy anywhere in the world. The reason for the hot lending in Korea is that Govt has total control over the banking system. Banks are told how much to lend and who to lend to. Such a system will inevitably collapse.

HK doesn't have anywhere near the level of social services that Australia has. More to the point, with full employment it doesn't need them. An extensive welfare system requires high taxes, which in turn restrict economic growth leading to higher unemployment and lower tax revenues, which in turn create the need for more welfare services and higher taxes, and so on. Australia needs to break the cycle. The problem is, the current political leadership doesn't have the guts or the brains to do it.

Regards, Milhouse

Milhouse and NJ: Any updates from Princeton Economics? Looks like July's monthly close on gold was well below their projected price support level necessary for a gold bottom to be in.

17 Korean Life Insurance Companies Reprimanded by Government

South Korea's Ministry of Finance and Economy banned five life insurance companies from selling
corporate pension insurance and slapped lighter penalties on 12 others. The ministry said the 17
South Korean companies face punitive measures because they failed to respond to an order to
increase their capital ratio. In Korea, insurance companies have to retain 1 percent of their
outstanding policies as assets. The 17 companies, mostly small and new, were unable to raise their
capital because of slim profits amid a toughening business environment, said James Kim, an
executive director at Kyobo Life Insurance Co., the second- largest insurance company in South
Korea after Samsung Life Insurance Co.

For DJ
For your or any PGM fans info - the impala platinum 1996 6 month
results can be found at http://www.implats.co.za.
I suspect that implats earnings per share will rise more than
rusplats eps as a result of the recent run up in the platinum price.
Would appreciate your checking their results-
Please let me know your estimate of implats cost for platinum,
and what earning/ share you project at present platinum levels.
Im beginning to think implat's price of 53.5 rands is low relative
to Rusplats from of around 80.

For DJ
For your or any PGM fans info - the impala platinum end 1996 6 month
results can be found at http://www.implats.co.za.
I suspect that implats earnings per share will rise more than
rusplats eps as a result of the recent run up in the platinum price.
Would appreciate your checking their results-
Please let me know your estimate of implats cost for platinum,
and what earning/ share you project at present platinum levels.
Im beginning to think implat's price of 53.5 rands is low relative
to Rusplats from of around 80.

I've never understood the preoccupation with October crashes. Time was when the U.S. was an agrarian economy this preoccupation made sense because of cash flows related to farming. Certain times of the year saw higher cash demands/flows due to planting or harvesting. The twenties brought a great change. The modern America was being born, and along with it, heavy industry. This changed the seasonal cash flows in the economy. To expect a market crash because its October is silly. It may or may not happen. I have a number of friends who are preoccupied with this Tenth Anniversary of the October 1987 event. I get very irritated when they bring this date up. I always ask, Show me where the 87 crash was on the Dow chart? Most could not find the LITTLE blip that was the 1987 correction. The point that Im trying to make is this; The crash does not have to happen in October, this is wishful thinking and coincidence if it does happen. There are many subtle signs of trouble to be sure.

With regards to the market correction of the last day or two, what do you think a swing of forty basis points in the long bond to the upside has done to the bull case of low interest rates and no inflation? Add to that the currency turmoil in the PacRim countries and we have similarities to the spring of 1987. Similarities ONLY. I cant predict the future, I just try to make the most educated guesses that I can and bet accordingly!

And finally, the reason that everyone that I talk seems to want to get out of the market before the crash occurs, is so that they can try to get in at the bottom! Talk about GAMBLING! Psychology! The fact that so many are expecting such an event leads me to believe that it will not unfold in this manner. My vote is for a long, grinding bear with much volatility. I dont think a 1500 to 2000 point down day is in the cards. Remember, if we define a crash as ten or twenty percent drop in a few days, you have to be expecting an 800 to 1600 point drop in the Dow in a very short period of time, say in a week. Unlikely unless a cataclysmic event occurs. If that happens, remember your Gs. Gold, ground, guns, grub, god,.....

Cheers!

If the US $ won't act like a safehaven to those people with devaluations in prospect, what will? The only other currency is the Yen, however the Japanese do not want the Yen to be stronger against the dollar and the interest rates are around 1%.

Well Gold's action the past couple days was impressive. For the first time in awhile I'm beginning to believe that we could rally here. How high? How long? Only the future will tell. I do not see a huge rally, but I am awear of the possiblilities. One would think that at the very least we should test the 100 day moving average. After that......?????

Steve - Perth. Need to comment about Richard Russell Newsletter if this is same author of Dow Theory Letter. I subscribed for about 6-7 years end of 70's - early 80's. Following his advise he kept me and I'm sure many others out of bull market starting in 1982 with his pessimism on stocks and optimism on gold. I finally unsubscribed.

This happened again with another well known stock guru. I have learned to be very cautious of following one person. It seems the best way is to make own judgement from the many opinions presented at Kitco.

Thanks for your contirbutions.

My last post was not meant to pick on anyone. I just have to look at the gold bear and realize that something similar will have to happen to the stock and bond markets. After all, look at how bullish most of us were /are on gold. All the way from the high 390s to the 410s and all the way down to 314? Most of us never gave up hope that the, Truth about gold as a store of value would not rescue the price, all the way down to the present levels.

Now, I am a gold bull!

Please extrapolate our plight to that of the average mutual Fund or go-go stock holder. If we are bulls, what are they??? They have had fifteen years of BULL MARKET ACTION! How hard do you think it will be for them to have a paradigm shift? How many, Sucker rallies, do you think there will be? How many did the goldbugs have? How much did we all lose? How frustrated did we get? To expect a sudden crash and for most stock holders to abandon all hope is not realistic. The dippies have to get burnt, and burnt bad! That appears to be the psychology to me.

For now, Id be happy to have a good trading gold market for the near term. The long term ( years ) is very bullish IMHO. Keep an eye on those currencies, the bonds will follow. Stocks? Theyre in a world of their own!

Lurker @Friday 23:19

Thanks for the info. The URLs didn't work though. I know Schwabee is involved in a class action lawsuit regarding their trading practices. My problem is that I like electronic trading, and they seem to have the best setup around. I'm slowly moving to another broker ( thanks D.A. ) , the only problem is that the new folks don't have as good an electronic setup. Life is tough and you've got to make choices. I prefer good execution, we'll see.

Glenn -- If we broke $332 I would be happy. A test of the $338 to $340 area would be great. If we broke $340, I would be looking to find the 'problem'. Be it a collapsing currency in the PacRim area, Middle East trouble, or inflation fears in Europe. I would then take it from there. IMO, gold needs the one percent of the stock money out there to really get going. For this to happen, we 'need' some 'news' to justify gold going up. Nothing could be worse for the paper hangers than to have gold slowly creep up with no explanation. This would be a sign of the lack of faith in the paper markets. This would be totally unacceptable to the paper hangers. A 'news event' would be something that they could hang their hat on and say, "Well, we didn't expect this!", a great face saving move. Some would call it an act of God.

Mornin Panda! ( 10:21 post ) A very interesting read and right on the money!
...I don't know if it's my computer but twice when I tried to access the rest of your 10:37 post my damn puter did a total lock-up and I had to shut it down...Anyone else having any problems??? Hammers I know...computers I don't!

Welcome back sailors!...Will be gettin back at ya and glad ta hear you had a good trip!

Tort: Glad to hear you got another bread maker but watch out fer "taco belt"...It's raining here ( as you can tell from Satellite image ) and I'll be gettin somethin off yer way in a while...

Donald: A bank is a place that receives money, not a place to save money. This one sentence says worlds. Now if we substitute the words "financial system" for the word "bank", I believe we have a one sentence defination of the greatest con game in the history of the world.

Panda - Your 10:21 also resonated with me. You have captured in words some things that have been rattling around in my mind lately.

Ted - You know hammers? I understand the MIR is taking resumes from carpenters. Apparently they need to renovate. Interested?

Savage - Dec Gold will find resistance between 334-335, if long I would take profits here and wait to see if the market can close above 336. If it can close above 336 the door opens to 360 basis Dec. XAU may stall right here for a few days, may even back up a few hundred points but should then rally to 110 - 112. ABX has held its long term support line and looks like its still going to 28-29.
Sept S&P with the big sell off yesterday the S&P did no more than drop back to the support line drawn off the Dec 96 highs. This area had been resistance has now become suport. I would suspect a rally from this area into option exp.. A close under 925 would target 890. I'm still long ABX, XAU calls, bought Dec Gold at 327 stopped at 325, re-entered at 323.

Your thinking is sensible, but markets are not. When the real estate market moves and a bull market takes hold you will not know till it happens.One thing you missed is 90 % of the wealth in this country is controlled by the wealthy not the poor and they control the markets. Who do you think controls the stock market? The middle class and the poor. I think not. Did everyone know stocks were going to do what they have done in the face of recession and no money around a several years ago. Where did the money come from, not the middle class or poor. They had no jobs and their home values dropped out of bed. No one here thought stocks would climb this far, say 5 years ago. Your friends would have thought you were crazy. Trillons of dollars are in equities right now and world wide the number is staggering. The money will find a home in hard assets, if not then the world goes completly to hell in a hand basket. Hard assets have been left behind and they too will rise up out of all the so called problems we face no matter what. No matter how rational you are markets are not. Every dog has it's day.

George: Of course you are correct it could go either way. However I strongly feel there must be a crash. If the fed gets involved ( as I feel they will ) it could be a controlled crash with a chart that looks much that of 1929-1932, with gut wrenching plunges followed by brief but powerful counter-trend panic short covering. In fact this will be a traders dream.

The reason I feel a crash is all but preordained is the widespread new era thinking ( more of a faith really ) which seems to be found everywhere today. I follow the thinking that all great manias ( and this may be the biggest of all times ) are really a variant of mass hypnosis. As long as the feeling lasts the market goes up. But at some point the masses "wake up" and find out in the cold light of reason, that ie fair value is somewhere around 2000 on the dow. Thus we either go up at a rapid rate or plunge with nothing in between.

DJ ( 11:29 ) Damn right I'm interested!...people always did say I'm a bit SPACEY....Tort:keep the crumbs off the keyboard....please!

Somebody mentioned 2000 on the Dow. We will never see 4000 on the Dow in our lifetime again. If the opportunity every presented it self 5000 would be a buy of a lifetime and I would back up the truck and load up. With the exception of a nuclear holocaust. Then you can kiss you and all your worldly possesions goodbye. You know, some inflation is good for the stock market long term. Without it, evaluations for everything from soup to nuts would fall and investing would not exist. Cycles must evolve for all assets classes, otherwise the system would collapse with no survivors.

These two giants alone have been powering much of current mania for stocks. Thirty percent per year earnings gains are projected for years to come in their stock prices. What could possibly go wrong? Well how about just so simple a thing as a stiff recession. Six months into the recession thousands of corporations discover their IT departments far from being profit centers, are in actuality incurring massive losses. But information is a product the chief says. Yes and no say the accountants right now we are not selling product and we are sure as heck not selling information. Cut the bastards says the chief. Hundreds of thousands of system people and programmers et al find themselves on the street. Also on the street, millions of powerful business type pc computers complete with all the latest software. The price since there is no demand at all, about 1/4 that of your local pc dealer. The production of new pcs is cut to the bone or less. Meanwhile the public, the ones who are not buying the cheap newly liberated bussiness computers, decide their old pc and software will have to do at least until the economy improves. New personal computers and new software for personal computers suddenly becomes something no one needs or wants.

Goldfinger: You may be correct, however the dow chart I have in front of me shows 3000-4000 as being the first good long term support. And the funny thing about this advance is that statement has been true for several years now.

As of yesterday, 1,896,600 rubles ( plus markup ) will now buy 1oz. of gold. Legal in Russia again now after maybe 70-80 years? What a bargain! The U.S. is on a similar slippery slope. Gold coin is the only insurance policy I've owned that retains worth 1 yr. from the time of purchase. It may be worth more or less, but unlikely it will go to zero every year as does my homeowner's, auto, etc. Patience until fruition is a virtue seldom denied. ( Is that an old saying or did I just invent it? )

I personally sincerely doubt and positively rule out that senerio. However, it could happen. I'm not that pessimistic. You might see 4500, but that would be about it. 15000 would be here sooner than 4500 in my opinion.

I won't mention any names but I've seen Dow 300 or so talked about here..
I'd really back a FLEET of trucks uo for that one!...BBL...important matters of state call....

UO=UP in Cape Bretonese....

GOLDFINGER: I can see the Dow trading down to the 5000 area over the next 12-18 months, but agree that a drop to 2000 is very unlikely.

Panda: Whether or not we crash, the market will be considerably lower in October than it is now. And gold will be considerably higher -- probably in the $350-375 range. Agree that a long grinding bear is more likely than a SUDDEN crash. But long grinding bears typically END with crash type action as the last of the bulls throw in the towel. Sort of like gold in early July.

7500 is now the crucial level in the market. A drop below that point ( decline of over 10% ) will get us down to 7000 or less very quickly.

BW, GOLDFINGER: I hope that you have saved the Dow/Gold ratio chart of bb fisher posted on 7/27/97 5:34 and 5:37 AM. ( Two charts pieced together to make one ) If you look at the Dow in that context you will get a better view of where we are going with the Dow in terms of gold. In 1980 the "real" Dow dropped below "real" 1932 Dow. The numbers you are using in your discussion are useless unless you adjust them to reality. At Dow 8300 or so of the other day you are still not back to the 1966 all time high in real dollars.

Was it ABX's CEO who said that European CB selling would drive the AU price down for the upcoming 6-9 months? Will CBs' continue plans in light of changing bond and stock conditions? Does this have any play
in current US stock market top? If world stock markets domino with US,
is gold THE HAVEN or a hindrance to coordinated CB efforts? Thank you.

Hey Ted... Watch out for that Screech !!! Blindness will affect your postings. I wonder if all the lemmings on Wall & Bay street are lining
up to jump ship yet??? If it wasn't for the gold & pm index on the TSE , it would have been alot worse yesterday.

I hear ya. Makes sense. It's not over till the fat lady sings. It is gonna be real interesting to see how the pieces fall into place. Could be alot different than any of us think. 10 years from now we could be living like the Jetson's or be eating out of garbage bins. Let's hope the later does not come true.

Donald: Your 1966 figure constitutes raining on the parade around here. The DOW isn't at an alltime unsustainable high? Next we will be hearing again that the 850 gold of 1980 is only worth 3-2-5 and 850's worth of Dow is now worth almost 3300. Of course 850 was a high and such a comparison is unfair. Next time anyone talks to a Chinese General ask him if they have figured out where the sky will land when it falls.

re: John N ( Retiarivs ) :
A neighbor who stopped by last evening called today to verify sighting "animated fuzzy things" on our journey to Margaritaville. We may get Tom Brokaw over here one Friday night to verify beyond a reasonable doubt as to what's going on. Go gold!

GOLDFINGER: I am 63, feeling pretty good, and will easily see Dow 4000 in today numbers in my lifetime. There is nothing but air below the Dow. America has no net worth. This is a credit created Dow. I suppose it could go higher from here but the downside damage will be all the greater in that case. An ordinary run of the mill bear market is 30%. That gets you back to 5810. No way will anyone get off that easy.

Pillbrain: Wonder if Peter Monk's talk about sub $300 gold gold was bait designed to lure the shorts into a killing zone.

FUNDY: I didn't mean to rain on your parade, I am only reading a number from a chart. It says you should of bought stocks in 1932, sold them in 1966 and bought gold which you held until 1980. Then you were back in stocks until now. The chart says sell stocks now, buy gold again and wait 15 years or so and you will be very happy you did. The stock parade is passing, it's starting to rain, gold is your umbrella.

Earl:

"outside of brothels in benighted regions. "

Jeez Earl, a simple "yes or no" would have surfeited ya' know! ( :- ) )

OK, so you want George to have it but first we have to purify it through a bath of acid. With that precaution in mind, perhaps we should have Mr. Sheller do an astrological sign/time search to find the best date/time to anoint George into his Kingly role. How about it Mike? The group needs a freebie. We, of course, wouldn't want to start celebrating too early so your assistance re the investiture would be invaluable. Of course, anyone who knows about the "brothels in benighted regions" can't be all bad eh! My guess is that his conscience forbids his assention to royalty only because he is such a humble soul. But then I read about brothels and wonder how humble one must be to enter?

As I said Earl, a "yes or no" would have surfeited ! ( :- ) )

P.S. Mike if you could, put a rush on it please! George could be all wet on this call, so we're under a bit of a time rush, if you get my drift! Thanks.

TTFN ( :- ) )

Donald: Although we are nearly opposite on where we see the economy going, we are intellectual twins on the matter of where to have ones assets for the foreseeable future: buy gold and sell stocks. In my own case I would add on real estate to the gold holdings to take advantage of general price inflation ahead. ( Actually the great cycle of wealth in America is from stocks to real estate and back again over rather long periods, even though gold is cleaner and easier to care for than real estate. )

Donald: If I'm in a parade everybody else must be lost. Couldn't buy much in 1932 but did buy stocks in 1981 and except for a false start in 1996 my gold buying days are still a few weeks ahead. Wonder if the Chinese Generals know where the gold in the pot at the end of the rainbow is. Even the sky falling could be a gold boom.

AUROPHILE: I have no objection to paid for real estate. I would not use leverage because it works against you in a deflation. I must be confused about where you see the economy going? I feel it is going down the tubes. What is your opinion?

Donald: Y.Auger has updated his charts as of Friday. Looks like he made some small change in the ratio charts. Ratio chart looks good for gold stocks. Indication that it wants to close that gap on the upside.
Y.Auger has commentary which I am not in agreement with. He does Elliot Wave analysis. But I am mostly interest in his chart and not necessarily the analysis part. http://www.mgl.ca/~yauger

The United States has plenty of assets to cover liabilities. If I had more time I would go into more detail, but don't ever sell America short in the long run because you will have your head handed to you, unless you die first. This is still the GREATEST COUNTRY ON EARTH. I remain.

FUNDY: I watched that Chinese military discussion yesterday but did not enter it because I don't know much about military matters. It seems to me it all depends on whether a future war is nuclear or conventional. If it is nuclear Nantucket Island could win it if they started first.

The government's principle was to treat war outlays as *extrordinary*
items, borrow for them, and raise taxes enough to cover the resulting
debt-service charges. In 1914-15, therefore, Sir Thomas decreed many
increases in customs and excise duties and in taxes on bank note
circulation, non-life insurance premiums, and the gross income of trust
and loan companies. As the dominion already had *full information* about
these matters, such new taxes had the additional advantage of requiring
*no new administrative apparatus*. In 1916, however, Ottawa had to move
into new fields, imposing a "business war profits tax" on profits taken
in 1915-17, inclusive. In 1917 the rates were raised. In addition, the
dominion introduced its *first income tax*.

This applied both to "individuals" and "corporations". The rates were not
high. Corporations paid 4 per cent; individuals who earned less than
$2,000 - the great mass of the Canadian nation - were exempt; there were
further exemptions for married persons; for the unmarried, rates
progressed from 1 per cent on the first $2,000 to 8 per cent on an income
of $25,000. Not very much, it would seem. Nor were the revenues great,
even though rates were raised in 1918 and again in 1919.

Revenues from the new income taxes did not materialize until the fiscal
year 1919, because at that time, and indeed until the Second World War,
dominion income taxes were never deducted at source, but were paid only
after the year to which they applied. Thus in the fiscal year 1919, the
dominion's total revenues were $312.9 million, of which almost every
dollar came from customs, excise, the post office, and dominion lands;
only 3 per cent came from personal income tax, 0.4 per cent from the
corporations tax, and 11 per cent from the excess profits tax.

In the Second World War things would be very different. The idea was to
repeal such new taxes once the war had passed. But the income tax is
with us still.

Furthermore, these wartime tax changes are important because they mark
the dominion's entry into the field of "direct taxation" a field which
Ottawa has constitutional power to use but where the provinces had
previously *browsed* as they wished.

The provinces had been taxing corporations since the 1890's, and by 1907
there was some form of corporation tax, usually on capital value in
every province; British Columbia first taxed personal incomes in 1876,
and Prince Edward Island in 1894, although other provinces did not do so
until the 1930's. The dominion had also left the provinces the field of
succession duties, another tax where collection costs were low and which
the provinces had been collecting since the 1890's. The dominion did not
levy succession duties until the Second World War.

Sir Thomas White was proud that he had not*financed the War through
inflation* by which he meant that he had not *printed money to pay the
government's bills*. Nevertheless, during the war, Canadian price levels
rose quite dramatically. The general wholesale price index, whose base
is 100 for 1935-9, rose from 85.4 in 1914 to 166 in 1918, and then went
on up to 203.2 in 1920, falling back to 126.8 in 1922.

The Department of Labour's family budget index went from 100 in 1913 to
98.7 in 1915, then rose to 147.2 in 1918 and to 184.7 in 1920. These
price increases, whose causes were not well understood, provided much of
the fuel for two ( 2 ) successive *fires*; the attack on "corporate
profiteering" and the *wave* of labour unrest which swept the entire
dominion in 1917-20.

Why were prices rising ?? The causes were partly domestic and partly
international, but neither cause had anything much to do with
"profiteering" Not were they exclusively Canadian. From the outbreak of
war 1914 until 1920 the entire Western world experienced an *inflation*
the like of which had last been seen during the Napoleonic Wars.

The rate varied among the various countries. There was more *inflation*
in France than in Britain, and more in Britain than in the United States.
But the phenomenon was universal, and so was the basic cause: the
pressure of war demand on economies whose productive possibilities were
declining, as in France and Russia, or not growing proportionately, as in
Britain and the United States.

In principle, by following a really stringent policy of high taxation and
tight money, Canada could have financed her war effort without importing
this inflation. The value of the Canadian dollar, which was freed from
its link with *GOLD* in 1914, would then have floated up, offsetting the
effect of *inflation* abroad. In practice, of course, nobody in Ottawa
ever thought of such thing.

The dominion had long been accustomed to finance *extraordinary* outlays,
such as railway building, by loans. Surly the war was an *extraordinary*
event ?? Surly it was natural to finance the war by borrowing ??

Although some provinces and many municipalities and corporations were
accustomed to borrow within Canada before 1914, the dominion had not
floated a domestic bond issue for many years, and its informal or
automatic borrowings from the public through the post-office savings
system had for some years been falling. But because the London market,
on which the Canadian government had chiefly depended in peacetime, was
no longer readily available, Ottawa was obligated to explore the
resources of the domestic market.

White was surprised to find how much he could raise, and how easily.

The great chartered banks were natural channel through which the public
could subscribe. As Sir Thomas later explained, nothing could be easier
than to float a new dominion bond issue. One telephone call to the
Canadian Bankers Association sufficed.

If the banks found they were paying out too many notes they could borrow
some, cheaply, from the government; if they wanted to preserve some sort
of "window-dressing", maintaining some target ratio between their deposit
liabilities and their holding of *GOLD* and dominion notes, they could
borrow new notes for that purpose too.

In either case, the dominion government would be *happy* to print some.

Donald: As with all matters of information the first question to be asked is what is the source. After that is clear then the evaluation of it can begin. If China was a military threat to the US the Taiwanese would all be wearing Mao jackets and making keychains and pirated copies of Windows now.

GOLDFINGER: On balance, the individuals and corporations of the United States do not have enough assets to cover their liabilities. As the stock market declines that already poor balance sheet will deteriorate further.

The United States government and the individual state government are unlikely to dispose of their assets so their liabilities can only be met by the individual taxpayers. Perhaps the Postal Service or Amtrak or other things of that nature could be sold but only a fire sale prices. If a decision to sell were made it would be during a time of extreme hardship when few buyers were available with cash.

It is quite something to see the gold sector as the only Toronto sub index with a + sign. This has happened a couple of times recently, but I suspect more such days lay ahead......

Donald:I see the economy continuing to go UP the tubes and most likely accelerating to over 6% GDP. A younger person than I ( =nearly everyone ) could consider leverage in real estate since the payback will be in increasingly worthless dollars.

goldfinger,et.al. - Most of you probably remember this sobering chart posted many months ago. The DOW has now hit the blue line, maybe a bit over, as in 1929. If panda is right and it is a "grinding bear market", it will repeat the profile of the drop from the '60's top. Will blast thru goldfinger's 4500 in about year 2003 down to a low ( in 1997 dollars ) of around Dow 2000 around year 2013. ( How about a new chant " 2013 in 2013" )

If we get a crash, then it will fall like it did from the '20's high. Gets it done in 2 years and oscillates wildly for the next 17 years.

In either case, if this channel is valid, DOW won't hit 15000 until the top of the next cycle, 30 years from now.

http://cpcug.org/user/invest/secular.gif

According to the kitco gold/silver spot graphs, these metals went verticle in the last 1/2 hour of trading on Friday. The asent stopped when the market closed. Monday?

Lots of thought here lately about silver at 4.25, 4.00, 3.75 and 3.50. Buy the physical now and think instead of silver at 5.00, 10.00, 15.00 and 25.00.

DJ: How about 1000 in 2000!

Ted: You mentioned earlier so problem with the computer. Last weekend and this weekend I experienced a problem here at the library where out of the blue I would be kick out of the Internet for no apparently reason. Last weekend I tried going back to that certain spot, posting where I was kicked out previously and sure enough I would get kick out again. .... Don't know if anyone is experiencing the same problem. Mystery?

bw - This would be the crash scenario. However, unless we get an overshoot even larger than in 1930's, even the crash scenario would only take us down to DOW 1400. But "1400 in 2000" isn't very catchy.

BTW, one way to set a "reasonable" level for the DOW, is to draw a straight line up the middle of the channel, between the blue lines. This would say that DOW3500 would be a reasonable level today.

DJ: Those constant dollar charts use the government provided CPI figures as the basis for their adjustment. If you use those figure you are saying two things. That the government CPI numbers are honest and that they did a good job in collecting the data. I prefer to use the gold adjusted numbers because it removes the government and substitutes the market place. I recognize that it is not perfect but I don't know of a better way.

DJ: Since 3500 is at approximately the level of the previous 4th Elliott wave of similar degree, ~3500 would be an appropriate place to stop if this is indeed a cycle degree top. If 1994 to present is "merely" wave one of an extended larger degree fifth wave, i doubt we go much below 6500. There will be plenty of time to decide that issue. Or at least plenty of Dow points. A 28% decline to 6500 would be a typical bear market correction.

AUROPHILE: I did not realize we were that far apart on our economic outlooks. I feel that the worldwide credit cycle we are now completing must collapse due to the lack of future borrowing power. The use of credit requires that at some point in the future you pay back what you borrowed with a reduction in spending on consumption items. I feel we are at that point now. I don't see how it can be postponed. The soaring rate of personal bankruptcies is one of the signs. The election of 1994, where voters selected candidates who claimed fiscal responsibility is another. Attempts by corporations to downsize is a third. Attempts by the federal and state governments to balance budgets is a fourth. All those actions are deflationary.

Hi, I am new to this mailience

Has anybody of you read the Illuminati Protocols ?. It seems to give a
good understanding why gold may be the only material value to remain
Go: www.neo-tech.com/illuminati/front.html

Hamlet

DJ: Also since I believe that we are in the same place in the economic long waves as the US and Canada ( and Europe ) were in 1946,an approximatley 30% absolute decline or 40% of the previous rise ( as from 1946-49 ) would fit nicely with 6500 on the Dow.

Donald and aurophil;no argument with real estate or gold.I just debate if I could be burried in my backyard which I aready have title to or invest in a public plot where you pay once and stay there taxfree,or get dust to dust treatment and get strewn to the 4 winds of heaven ( also a once only admittance fee ) .In the meantime-IN GOLD I TRUST!

Donald: The disinflationary copings which you list are coming to an end. They were the response to the 1980's. That was the *last* war. We are now lifting off in economic growth, employment, and prices. That is the new war. The reason why stocks will falter and fall is rising interst rates and recrudescent inflation. That is also why gold and real estate will rise.

I noticed in the URL for the Illuminati Protocols there was imbebbed the word "front"!!!

"When Prices are up and the country is prosperous, it is always said that while preceeding booms have not lasted, there are circumstances connected with this one which makes it unlike its predecessors and gives assurance of permanency. The one fact pertaining to all conditions is that they will change."

For those interested: At the Yahoo quote site http://quote.yahoo.com one can see a short term breakout of the Toronto Gold and Silver Index on the 3 month chart and the 1 year chart. Its symbol is ^tgl Might also want to explore the Gold Option chart. The symbol is ^aux

July '97 give me the feeling that a coordinated strategy directed at global market and currency stabilization was afoot. As I remember they
didn't like Au in the mix. Can currency devaluations, market crises and
human nature ( fear ) overcome such schemes? Will they still
sell the metal as things go in the toilet.

Given the unprecidented level of the overall stock market & multi decade lows in interest rates, I believe that gold by default should form a part of most investor's portfolios. I am very bullish on gold and have 25% of my liquid investments in gold stocks. 25% is allocated to specific value stocks & S&P put warrants and the balance is in cash. Is there a better home for the 50% in cash? I have read that managed futures have a low to negative correlation to the stock market.

Does anyone have an opinion on managed futures portfolios for a growth orientated investor given the current investment environment?

PILLBRAIN: When you say "they" do you mean the Central Banks?

Has anyone here dealt with Monex Gold Traders. They use leverage to invest in metals for you.

THOR: I like your portfolio but I do not agree that we are at a multi decade low in interest rates. For example in 1980 the inflation rate was at 14% and you could borrow at 13% ( without looking up the exact numbers ) they were paying you 1% to borrow the money. After your tax deduction it was even cheaper. Now we have a CPI inflation rate of 2% and you pay 7% or more ( depending on your credit rating etc ) that is a very high real, and deflationary, rate of 5%.

Charles Dow: Cool Charlie. I didn't realize you studied with Heraklitos...:- ) ) ) )

Thor: Your portfolio is an ideal one for the future I envision. As short term rates rise your income will climb but your gold will more than overcompensate for the loss of purchasing power of your cash. ( You could also conservatively write out of the money options on your gold position for extra income. ) You might want to consider diversifying your cash into part US and Canadian dollars, part Swiss francs.
As to your other question,in my experience, managed futures accounts have a negative correlation with everything. They are almost always losers. If you wish to pursue this area, I would recommend buying a CRB futures contract and rolling it forward every 4 months for the next 20 years.

aurophile - You give me way more credit than I deserve! I really am not qualified to post a prediction of the next move down. My DOW3500 was just an observation, based on the chart, that 3500 appears to be a good 1997 DOW level if one eyeballed a straight line through historical prices. The reason I posted this chart again is that there are a lot of pretty wild DOW predictions being thrown around, and I thinks it helps to give a historical perspective. Haven't learned Elliott Wave Theory, although I understand some of the basis for it and it seems reasonable.

Donald - I'm not sure how you could use gold as a correction factor over this long a period. As you are well aware, gold price wasn't set by the market for quite a long time, and when released, it oscillated wildly, now seeming to settle somewhere around cost plus a reasonable profit.

As a reminder, to those that don't have it handy, here is the historical gold price graph.

Larryn: The Monex corporate name has been around for a long time, but I have no knowledge of the program you mention. Based upon the sad experience of many gold investors in the last bull cycle, you would probably be better advised to purchase leveraged gold investments via gold stocks or futures or options vehicles rather than via off-exchange un-regulated sources, assuming you need leveraged gold at all.
With a gold option on Comex, for example, you are buying something which is backed by physical gold in a regulated warehouse. With a corporate leveraged gold product you don't know what you are buying, if anything.

Donald: As a follow-up on your suggestion last week here are a couple of Albert Jay Nock quotes sourced out from his writings in the early part of this century. 1. The simple truth is that our businessmen do not want a government that will let business alon. They want a government that they can use. - Letters, 105 .....2. The old proverb about politics making strange bedfellows is quite wrong; it makes the most natural bedfellows in the world. Crook lies down with crook in any bed that interest offers; swine snoozes with swine on the litter of any pen that interest opens..- Journal, 248...and last 3.It occurred to me then, how little important it is to destroy a government, in comparison with destroying the prestige of government. - Journal, 283 .... sorry for any typos on this "text" only computer.

Hi Mainlander! Thought you'd vanished from the face of the earth...Today is Saturday and have been seein "The Captain" for the past hour or sooooo!....Rain + wind here...but,hey who cares...eh...Am lookin forward to the Screaming Eagles first home opener....Yes to the QMJL!...and to Joe Sakic!...Things heating up in the middle East...Go Gold!

Evening Byron.....Sorry to hear you're having "puter" problems too but...
misery loves company....Thought I was singled out for past sins er somethin...Listening to the local news and it sounds like things are rapidly going downhill in the Middle East...Israeli planes went on another bombing mission in Lebanon....Retaliatory terrorist strikes next.
...

I agree with Donald's assessment of our current point in the long-wave cycle. However, I do believe it is possible to keep the end of the cycle going if the real return on money continues to diminish, i.e. stock investors are willing to accept a 0.5% rate of return rather than the current 1.5% or so. : ) And bond holders are willing to accept, oh, say, 5% rather than 6.5%. : )

Ted: Does anyone know what those people are fighting about anymore??

The banks made such loans in the ususal way, by creating additional
deposits. Further increases came from the banks' continuing willingness
to finance the "legitimate needs of trade". As prices began to rise, so
did the costs of doing business. The process was *circular*: by financing
the "needs of trade" in this way, the banks allowed businesses to compete
against one another for the limited supplies of labour and raw
materials, just as through financing the bond borrowers the banks allowed
the government to compete with private business.

In this process the money supply increased very rapidly indeed - from
$1108 million in 1914 to $1828 million in autumn 1918, and to $2091
million in 1920. Most of this supply was extra bank deposits, not extra
paper currency.

Even before the completion of nationalization in 1919, the railways
involved Ottawa in heavy financial burdens. For instance, in 1914 the
dominion had to lend the Canadian Northern $40 million so that
construction could be continued. However, the war itself involved very
much larger outlays.

The dominion found the money by borrowing not only in London but also
in Canada and New York, where dominion securities had not previously
been seen.

Up to 30 November 1918 the dominion spent $1,068,606,527 on the war.
Net debt increased by $971,429,661. Almost all of the war was financed
by borrowing. Some borrowing was informal, and there was informal lending
too. Although the London new-issue market was closed to Canada after the
loan of March 1915, the *imperial* government advanced hundreds of
millions of pounds to pay for the overseas costs of Canada's armies.
Similarly, Canada advanced hundreds of millions to Britain, and in the
*settlement* of the *accounts*, although there was some *perplexity*
as to the *rate* of exchange which should be used in the *calculations*,
no one doubted that so far as Britain was concerned, the Canadian
government had become a *net lender*

The government knew that it would have to plan for the return of service-
men into the civilian economy. Although Britain and other European states
had long provided *old-age pensions, unemployment benefit, and medical
insurance*, the government had no such plans for Canada.

The Liberal opposition said in 1919 that it wanted national health
insurance, but only in the 1960s did a Liberal government produce such a
plan.

There were plans to settle ex-soldiers on farms, though, as events
unfolded, it was not the best time to be setting up as a farmer.

The government, however, could not have *foreseen* the *slump* of 1920-2.
And, during that *slump*, life in the cities would be no easier, and no
more secure, than life on the land.

DJ: The problem with that gold chart is the assumption that gold fluctuates. It does not. It is dollars that fluctuate. Seventy years of propoganda by the inflationists has done its damage on all of us. You must learn to think in terms of "how many ounces does it cost now" when pricing anything. It is extremely difficult when all your bills come in dollars to know where you are. That is EXACTLY why we were taken off of the gold standard. So that you would not be able to figure it out. Inflation is not a natural event. It is a deliberate policy, a non-legislated tax which is imposed because, were the tax to be subject to a legislative debate, it would fail.

As in all inflations the citizenry, and its ally, the market, adopts strategies that outfox the inflationary tax man. Working off the books, barter, underground transactions and even legitimate activities such as riskier and riskier investments that provide returns beyond the inflation rate are employed. Eventually, perhaps in the 1994 election, the government gives up. The result is not zero inflation. The result is outright deflation as the illegal and excessively risky investments, those that were dependent upon continued inflation, unwind in failure. Gold is likely to be one of those things that achieves a lower dollar price. The main point to remember is that gold buying power does not fluctuate. It remains stable.

Who Cares: Despite our real differences, I find it fascinating that Donald and I could both live with a basic portfolio consisting of Tbills and paid-for gold. If I am correct and inflation revs up, short term interest rates will increase along with the gold price. If Donald is correct and we have a credit crash, the same will occur. There will be differences in timing to be sure, depending upon which event happens, but for a "set and forget" portfolio you can't beat cash and gold no matter what happens. Maybe we should debate the weather and forget "flation" altogether...:- ) Or maybe you have the ideal handle at Kitco...

Does it make sense to commit about three k a year to out of the money silver options with the belief that when the mkt forces asset themselves you will do well ie you will be there?

Fidelity Select American Gold & Precious metals Charts
5 Years, 30 day and hourly charts at:
http://www.geocities.com/WallStreet/5969
Click on Gold Sectors

FSAGX UP 12.5% in past 22 market days.
Time to scale UP?

DONALD : CB'S ARE PART OF THE WHOLE. WHO MAKES UP THE WHOLE? THEY DON'T FREQUENT MY FAVORITE WATERINGHOLES. THE QUESTION REMAINS "WILL THE SALE OF AU DURING A PERIOD OF EXAGGERATED CURRENCY AND MARKET FLUX LEND ADVANTAGE TO THE POWERS THAT BE?"

Donald - With all respect, how can you say that "gold buying power does not fluctuate. It remains stable." Are you saying that if I went to the store in 1977, I could buy the same amount of groceries with an ounce of gold as I could in 1980 when the price of gold was 5 times higher? I don't think so!! The amount of real goods you could buy with the dollar equivalent of an ounce of gold has varied widely. I'm quite sure that you would rather have the goods you could buy in 1980 with $800 than the amount you can buy today with $325. In 1980 I could buy an average car for 5 oz. of gold. Today it would take 50 oz. Is this stable buying power?

AUROPHILE: Well said. The difference is that you will owe a capital gains tax on your non-gain. I will get a tax credit for my non-loss.

Donald: Oops cap lock was on. My apologies.

PILLBRAIN: Central Banks that sell their gold for paper weaken their currencies. Individuals who buy the gold they sell are the winners. The holder of the gold is "the strong hand" the seller is "the weak hand"
The problem is that this fact is not always immediately apparent to the market participants as we saw in the recent Australian announcement. The market fell on the news, not on the sale. Many players in the gold market are highly leveraged and can not sustain themselves through these adjustment periods. I would never use credit to buy gold, or stocks, or just about anything else for that matter.

DJ: I am sort of saying that. If you went into the store in 1932 with a St. Gaudens Twenty you could buy a real nice suit. If you went in with one in 1966 you could buy a pretty good suit. If you went in in 1977 you could buy a real nice suit. If you went in in 1980 you could buy two nice suits and a tie. Today with the same St. Gaudens twenty you can buy a real nice suit.

One last Nock quote for the day: ( Promise ) ...What was the best that the state could find to do with an actual Socrates and an acutal Jesus when it had them? Merely to poison the one and crucify the other, for no reason but that they were too intolerably embarrassing to be allowed to live any longer. - Memoirs, 274

BYRON: Substitute the word "gold" for Socrates or Jesus and the quote is still valid.

FRONT: I would be happy to try my best to analyze brother George's horoscope. If he would be so kind as to get me his date, time, & location of birth. My email address is above.

DONALD: ( 18:56 ) Blessed are you Donald, for flesh and blood hath not shown you this.

From July's Bull and Bear Financial Report: Adrian Day: "John Templeton advises buying at the point of "maximum pessimism". Baron de Rothschild advised to buy "when blood is running in the streets". Many investors must feel these investing greats were describing junior gold stocks. Against the background of a solf gold market and, in many cases, unrealistic stock prices, the Bre-X fraud has taken a severe toll on the market. Gold funds are being hit with massive redemptions daily and have no choice but to liquidate. Individual investors, seeing former high flyers down, are dumping before they collapse more. Now, the summer, always a quiet period for buying in this sector, has arrive early and with a vengenance. It is not a pretty picture. .... If you prescribe to the contrarian's motto-"buy when no one else is buying"-you should see this as your labaratory market. Many good quality junior resource stocks, already down sharply, are bidless. Pessimism.... blood...yes,it's a time to step up to the plate and buy. As always, stick with the best and try to buy cheap. In one year, you'll be happy you brought todya ( the quote goes on... ) 7/97.

From July's Bull and Bear Financial Report: Adrian Day: "John Templeton advises buying at the point of "maximum pessimism". Baron de Rothschild advised to buy "when blood is running in the streets". Many investors must feel these investing greats were describing junior gold stocks. Against the background of a solf gold market and, in many cases, unrealistic stock prices, the Bre-X fraud has taken a severe toll on the market. Gold funds are being hit with massive redemptions daily and have no choice but to liquidate. Individual investors, seeing former high flyers down, are dumping before they collapse more. Now, the summer, always a quiet period for buying in this sector, has arrive early and with a vengenance. It is not a pretty picture. .... If you prescribe to the contrarian's motto-"buy when no one else is buying"-you should see this as your labaratory market. Many good quality junior resource stocks, already down sharply, are bidless. Pessimism.... blood...yes,it's a time to step up to the plate and buy. As always, stick with the best and try to buy cheap. In one year, you'll be happy you brought todya ( the quote goes on... ) 7/97.

Sorry about the "double". Finger "slipped"! : (

DJ: I just did a quick calculation about car prices from my personal experience. In 1955 I bought a 1953 Chevy 2 Dr sedan for 28.5 ounces ( $1000 )
From today's paper I can get a Chevy Lumina LS '95 All Power, excellent condition, 67K ( highway miles ) asking $9500/BO call 860-276-9403. That is 29.23 ounces. ( my '53 Chevy was standard shift, no power anything )

Ted: That's OK to mention my name. I was the one predicting DJIA at 300. Ditto all of Donald's remarks about deflation. The rapidly accelerating deflationary forces will cause the Dow to crash to 300 -- maybe by the year 2000!

How does one be an individual who can think independently, while
immersed in a sea of overt media propaganda, educational disinformation ?

Read as much as possible in areas that will enhance personal sovereignty,
not only financially, but psychologically. Be discerning about what you
read and what you chose to read.

If you have allowed yourself to become apathetic about the government and
those who wish to control elements of your life, you are a perfect
candidate for complete control.

To live in a free society one must participate in government, at all
levels. Become aware of what your city, county, state, province, and
federal governments have done to take away the freedoms guaranteed to
you by the Constitution. Few people are really aware of the rights they
are guaranteed in the Constitution.

Control, is to give you only disinformation to make judgements with, or
to keep you from thinking clearly, it is your *responsibility* to do
whatever possible to maintain your own individual consciousness.

Alcohol, and over-the-counter depressants and stimulants that are avail-
able are indeed mood or behaviour altering methods of distraction. There
are myriads of mood-altering prescription drugs such as valium, librium,
etc., that are easily obtained through a doctor. Add to this the
extensive use of illegal drugs such as cocaine, morphine and its
derivatives, plus LSD, mescaline and their derivatives, and you have a
large, if not total, segment of the population perpetually ingesting
some form of mood-altering substance.

*Modern Artificial Control*
Ritalin drug----Sit down..Shut up...Drug ( for children )
Be quite....Consume.....and Die

Business is Business *You do away with your passions*
A Muslim Expression..Roughly Translated....
"If you have an interest,you will not find the truth"

Thor:

Managed futures accounts do tend to be uncorrelated from the stock and bond markets and there are successful long term managers. The company that I work for has one of the longest running successful track records of any firm in the business. The oldest Limited Partnership is now almost 15 years old and has had compound annual returns of around 20% per annum to the investor. If you drop me an e-mail I can have someone get in touch with you.

BTW: You must be a qualified investor in order to participate in the funds. I don't know the exact numbers offhand but believe that your net worth must be around $1MM or an annual income of somewhere around .25MM.

Aurophile:

How are we ever going to get any more assets under management if good folks like yourself cast such doubt upon our 'industry'?

Bank of Japan receives new powers for dealing with failing financial institutions..
http://www.nikkei.co.jp/enews/TNKS/page/index.html

If someone has the URL for the Illuminati Protocol would you please post
it for me. Couldn't seem to find it. Thx

Does anyone know if there is an Aussie gold stock index available on the web?

Thanks mates!

Aurophile - I don't find it suprising in the least that both
you and Donald have similar portfolios. You just have to
adjust your frame of reference from an axis of


inflation {----------------------------} deflation

to an axis of

status quo {--------------------------} non status quo.

I reached many of Donald's conclusions in 1992, but I didn't
act on them until 94. I buy the "relative value" idea, I
believe that all investments will lose relative value, but
gold is likely to lose the least. ; )

The long term trend of the XAU is now bullish while the short term trend for the XAU is extremely bullish. The Monthly CCI has now crossed upward to a point that the shorts will begin covering and going long. The moving averages are extremely bullish short term.The XAU is now at a resistance level while at the same time being at the top of it's Bollinger band; however, despite the same, other evidence, as listed above, indicates that we will have a strong upward move in the short term. The stock market still appears to be in an uptrend both short and long term, as of the moment; however, of course, that can change too.

George Cole:
http://www.the-privateer.com/chart/g-ind.html

George S. Cole, Puetz, D.A., Front, Donald, and all goldbugs.
I am interested in your opinions on how would you invest $10,000 on Monday ( 8-11-97 ) . Just a hypothetical exercise to see everyone's investment direction.
Thanks

SHEK: $4000 in 1oz gold maple leafs, $1000 in 1oz silver maple leafs, $5000 in Echo Bay Mines ( ECO ) , $2000 in Sunshine Mining ( SSC ) . Now what about Tuesday?

Shek: It would depend on the 10K. If it were pension money, senior and producing junior gold mining companies. Gambling money, probably some gold calls like Dec 360's, and LEAPs on Newmont.

Watchin a classic....

6PAK: Very deep 19:43. I would only say, re the last observation you made, that one MUST have a passion for something to really find the truth. Perhaps that must BE a passion for truth itself.

TED: The Shining? Isn't that about a pile of Maple leafs beside the fireplace? By the way, we never made it to Montauk today. Wound up at the Roosevelt Field Mall. Go figure.

Shek -- Hope you are a day trader! Else WaiT! Some serious volatility happening at this time. Potential trend changes beginning, but it won't necessarily be pleasant for many. Trend changes mean a lot of upside and downside as the markets adjust. I would simply say that what ever it is that you are looking to buy, try to identify a support level to put a purchase price in at. The corollary to this is to sell at breakage of those same support areas! No guarantees given. I will say that the paper will more than likely take a bounce up shortly. Perhaps even sometime Monday. Just beware and aware. I do believe that the papers won't go down without a fight! But when they do, it'll be as in the toilet! FLUSH!!! The metals will go in the opposite direction and WILL BE MEANINGFUL! There won't be ANY 'late' comers coming aboard! This is not meant to say that gold and silver do not have more down side potential to them. They certainly do! BUT, most certainly, pay attention to the 'details'!

Shek, if you "have" to commit $10K on Monday, 8/11, and high-risk/high-reward trading/speculation in options doesn't scare you too bad, here is an option 'portfolio mix', you might consider:
a ) 20% in Gold calls, such as the Dec. 360's, trading Fri. @ $130/$150;
b ) 20% in Silver calls such as the Mar $5.50 strike, @ $.07 ( cents ) Fri.;
c ) 20% in Dec. calls, of Sw Franc, &/or D-Mark, &/or J-Yen;
d ) 10% in NEM/$45's, &/or ASA/$35 calls, exp. at yr.'s end, or so;
e ) 10% in a 3mo. call in Cocoa;
f ) 10% in a 3 mo. call in Sugar;
g ) 10% in an OEX 100 call, exp. in at least 3 mos.; or save that last 10%
for your next trip Vegas.

Shek after much reseach I have taken someones advice and propose you do the same.
Namely, i am loaded to the gills with worm futures! Yes worm futures...I may be a little
early but after the market crashes and then gold...people will be going fishing for
quite a while...and i will be there to captialize....get in now Shek before its too late.IMHO

Hi Mike!...The mall???...We got em here too....Movie kinda reminds me of my winters......BBL...

George Cole ( or anyone else )

I would very much like to lay my hands at the end of each day on daily indices and key precious metals prices all on one page for that day - e g. London fixes ( Au & Ag ) , NY cash and actve month settlements, and gold share indices: XAU, HUI, Jo'berg, Australia, FT Gold Mines index, and the top ten world gold stocks. Currently I can collect these by assiduously searching different sites but it is a drag. Does anyone know of such 'one stop shopping' or should we suggest a page like this to Bart..?

Is there an objective reason for one to prefer Gold Maple LEafs to lets say Krugerrands?

Shek, why don't you just give me the $10,00.00, and I'll give you a really great massage ?!

TED -- I've been having some problems posting at Kitco recently, so you're not alone! I tried for ten minutes this morning to get one more post in. I finally gave up in disgust! High Tech? Increased productivity? ??? ??? ??? ???

panda- I also have had trouble and it takes forever to load, sooo ssslllooowwww. Also think that was the reason for so few postings
after the positive action in our markets last week.

James Flannagan's Saturday FAX flash calls for a possible upward bias in the precious metals now through September with a final liquidaation into 60 year low on October 24.

Tally Ho

Goldfinger -- While scrolling through todays postings, I came across your 14:23 post. I must ask, What assets do you claim that the US has to cover 'its' liabilities? They wouldn't be mine perhaps, would they?

George S. Cole and all -- I can't remember all of the folks who brought up the labor issue, but I did have an interesting conversation with a guy who works part time in a Home Depot. It seems he also works for the Post Office, full time. I was looking at some tools when he came over and we started talking. One thing lead to another, and the UPS strike came up. We got in to an interesting discussion about the U.S. Post Office and the unions there. I don't know why, but when he mentioned that one million people ( give or take ) work for the Post Office, I was surprised. This is but one branch of the government. What was really interesting, is the story he told me about one of the union stewards there. No surprise, but he ( the steward ) was telling all of the USPS people not to cross the picket lines at the UPS locations. No real surprise there, although whatever happend to, "Neither rain, nor gloom of night....", but what was interesting was that the steward was calling for 'support' of the UPS strikers. To paraphrase the third hand statement, "We are all brothers in this thing and you should go and picket with your brothers to show solidarity." This guy couldn't believe his shop steward was talking like this. He said the steward went on to say how any wage increase for the UPS people meant a stronger bargining position for them. It was along conversation, and I am abreviating here, but I think you get the gist of this issue... and it's implications...

Gold, platinum, or silver, anybody?

Panda: good to know I ain't alone cause it's gettin spookie "out there".
....BBL...

Shek:

Come Monday morning. I'd short the S&P using spiders's.

They don't need an uptick to get in and I would think the S&P is in the mood to drop. If not that sure of the drop, I'd put it into Gold Mutual funds as I've always considered myself like Jimmy Rogers, A LOUSY TRADER but a good spotter of trends. Of course, if it was my 10K and I had it to invest, I'd buy my pontoon boat instead of waiting till next summer. That way I could get in the fishing ahead of the hoard that will be using the worms in the future as proposed by Paul at 21:40. If he's correct, then there will be no fish left when everyone goes fishin' at the same time, especially with worms as bait!

Always thinking ahead .... Makes the present go by quicker!

Earl:

Ya you're right! My mistake. I even went to my big book because I wasn't sure either! Maybe we've got the same big book haha!

George:

OK, George, in order to not jinx the site and the Gold run, we must now ask you to send the information required in Mike's 19:03. If all is appropriate for coronation, then we will move with all haste so as not to let the Dow have time to go back above 8300 and screw up the investiture ( :- ) )

MIKE:

Thanks so much for the freebie. George will remember you in his will! Please suggest an appropriate date and time and we will ready all just before the DOW rises again above 8300 ( Don't tell George OK! He's still only 99% sure! Must use IVORY soap or something! ( :- ) ) .

TTFN

Ray -- Sometimes I just can't make up my mind as to who is slowing whom down! Is it the server at Barts' site? Some intermediary in the Internet? Could it be my ISP?

A few weeks ago, I was having a devil of a time trying to get to the EBN site. Others at this site had no problems with accessing EBN. I E-Mailed my ISP, and they reported back that they 'checked out' the URL and found it a little slow in loading, but there were no problems! As if by magic, I no longer have problems with the EBN site. Go figure!

So if anyone becomes delusional, and thinks that the Internet represents, 'freedom from government'. Be forewarned, in the best of times it is becoming a dicey proposition, and don't think that the 'plug' can't be pulled either! ( It becomes easier to explain as the system becomes more OVERLOADED than it is now. Just think, when all of those grade school kids come on-line, to "learn", courtesy of BC and the extra tax on your phone bill. )

Shek: If you have $1,000, $10,000, $100,000, $1,000,000, or $10,000,000, my advice is the same: Put all of your assets into gold and silver coins -- money that is external to our financial system. Weight silver heavier than gold -- say 70% silver coins, 30% gold coins.

6pak -- Your postings lend credence to the very real possibility of war in order to re-inflate the currency system. Wouldn't hurt in the 'jack boot' scenario either I might add! Thanks for the great posts!

panda- I do not think the problems I mentioned are mine. I have had a technician over to check, Kitco is the only URL that is slow.

Goldfinger: ( 11:46 ) Can't disagree with you on where the mass of the wealth is held.
Big money normally starts a market run, and this one is a humdinger.
The result after 1982 has been a steady increase in market investments by the general public; and reaching its heights in the 1990's, with IRA's and self directed 401-k's; not to mention foreign investors who have added to the fire.
When these paper profits finally burn, I wonder who will be want to drive up the price of real estate. A few may get it for pennies on the dollar; that is if they have the means and really want it?
I realize that this talk is that of a deflationist.
In a runaway inflation; gold will probably make a bigger run in an inflation, but then fall to a more normal levels relative to the inflation after the governments intervene.
I imagine gold would see heavy investor demand in an inflation, but it should have a better overall purchasing power in a deflation. My best quess.

Hi everyone!! I wish I could post more, but I try to get it all read. Alas, I end up skipping some days as the volume is just too much to keep up with. I think I need to emulate Ted to keep up with things here!

Anyway, I was watching one of those "Treasure Hunting" shows on cable. Usually it's the boring story of the usual undersea exploration or the expedition in search of some Mayan loot. This one was different: it focused on a hoard of Roman coins found on a British farm by the farmer using a metal detector. By the time the archeologists and all the rest were through, they found something like 15,000 items including coins, bracelets, spoons, etc. But they focused on all the gold coins ( around 300 ) found - and the good state of preservation they were in ( oh, duh! ) . And they speculated that these particular coins were used for large transactions such as buying/selling property or livestock.

But it shows what us gold bugs have been saying all along: gold has a long history of commerce and value. Although I don't agree with the dooms-day'ers posting here, I do agree that things have a very strong potential of heading straight into the toilet in the near future.

There's a time and place for everything; and all things in moderation. I'm buying gold in moderation! As George Cole ( et al ) have posted, there is little downside risk at long term gold investing these days.

Ray, Panda --- WWW = World Wide Wait. Not that I have particularly been experiencing those particular problems, but I probably wasn't posting at that time. The problem does show up from time to time though, but not too often. I generally have a bigger problem with quote services than I do here. NOT nice!

You make note of "Passion for truth itself"

Gold is the truth, as I accept it, in economic terms.
Yet, paper currency is an accepted truth as per, institutions of commerce
and the majority, of each others, countries, citizens.

So, the rough translation of the muslim expression:
"If you have an interest ( re: gold - paper ) you will not find the truth"

Likely, a reference to a section of the Muslim Koran; like a quote from
the Bible RE: making many books there is no end; and much study is
a weariness of the flesh.

Complex and deep, to be sure, lighten up and go for the journey, eh! : ) : )

George Cole: what is your read on mutual funds for the short, medium and long terms ( long term being defined as the turn of the century ) ??

GO TEAMSTERS!! Their fight is the fight of all working people who have been relegated to no benefit low paying jobs while the FAT CAT CEOs pay themselves handsomely and make big bucks from stock options by destroying the lives ( economically ) of the working people to benefit the almighty bottom line. UNIONS UBER ALLES!! NEWT/TRENT and their conservative anti working people clique be damned!!!

Speed: excellent retorts to those that think that the Chinese are going to lay waste to our "fleet." What your detractors don't realize ( or they believe what the press tells them ) is that the US Navy has more than one fleet. If your detractors define "fleet" as all US Navy ships afloat, then they are sadly misinformed. And I don't understand what the hang-up with the Exocet is. That's old news. The Navy has automatic guns that fire 20mm rounds ( tipped with depleted uranium ) that can zoom in and pretty much blow that stuff out of the water. ( !! ) Sorta the sea-going equivalent to the Patriot missile. Sheesh. For Spudmaster: 200 surface skimming targets is not problem. All you gotta do is go into the Jane's homepage and see for yourself. And they only report the stuff that's unclassified.

Oh, did I forget to mention that the US Air Force might have something to say about all of this? Has everyone forgotten the precision weaponry they have laying about? We would not loose a single capital ship or even a garbage scow, and here's why:

One small tactical data point: we would not have to deploy a single surface ship to handle the Chinese. A couple attack nuclear-powered submarines would do the job quite nicely. ( Not to be confused with the nuclear powered submarines that carry SLBMs ( submarine launched ballistic missiles ) . "Attack" subs attack surface ships. The missile carrying subs are a different class of sub, and are called "boomers" -- for good reason. ) Afterwards, we would bring in a carrier ( or two ) to perhaps perform an airshow for those Chinese sailors getting ready to eaten by the sharks. SemperFi to you, too!

6pak - "Read as much as possible in areas that will enhance personal sovereignty, not only financially, but psychologically. Be discerning about what you read and what you choose to read."

There's usually something reposing on a waiting room chair at the dentist's office that should be picked up daintily between two fingers and deposited elsewhere's lest something unclean be imparted-- the morning newspaper, Newsweek, etc. Constantly feeling irked and irritated can be addicting in my opinion, much of mainstream press as a category
serves to feed that monkey. A day of news cold turkey is refreshing, a week's blackout like a new lease on life. Either Will Rogers or that
old radio comic - 'Ain't whatcha know what hurts, it's whatcha do know that ain't so.' I'm sure most everyone has experienced the reporting on
some issue or event with which one is intimately familiar and seen how
one at a distance from the matter would be far better off by not having
had one's head filled with such guff.
addicting in my opinion,

Go UPS!...

D.A.: Clearly I believe in physical assets. And I have no doubt that there ARE some managed commodity firms which do a better job than the two year treasury note. But there are damned few of those which are readily available to the small and/or unconnected investor. Look at the ratings tables. In general if one believes in the future of commodities--pun unintended--one would do better with a CRB futures contract or option. Indexing for the commodity-enabled. Or better still, my 50% tbill, 50% gold portfolio. But there are so few inflationists left on the gold channels that I wonder you have a market at all. Isn't it a kick to live long enough to find all the goldbugs are deflationsts?!?!?!? The VERY idea..................

6pak - old Turkish saying, when speaking the truth have one foot in the stirrup. Like incest and matricide, the naked truth is taboo for good reason. Anything nearing it strikes a nerve, the nearer the louder
protestation.

WW -- While I DO have a mind of 'pay the laborer his worth', I do also have to say two things about laborers. One ) They hired in there full knowing what they were getting! 2 ) The door swings both ways!. What more is there? In all that, I'm not saying a thing about whether or not they should be paid more, or that more of there people should be 'full time & permanent'. Only that they DO have the option of going elsewheres. So what's the beef? Hey, maybe they can all pool their resources and start some more competition!

Could the current currency problems ( Dollar in over supply and potential bear in US financials ) be a forerunner to a challenge to US as the Reserve Currency? Thoughts!! THAT WOULD BE INFLATIONARY!

Hi Scotty!..Emulate me...god forbid!...Agree with ya that there is little downside risk to LONG-term holdin of gold....like to set my own time limits and feel very confortable in ABX.....The Hang Seng will tank at least to start the night tomorrow...Right JIN???...Will Monday in NYC be black or will the "dipsters" be back....

Ray: I have the same problems down south here in Southern Louisiana. Kitco is the slowest of all the sites I look at. Sometimes it hangs up at the top of the home page and won't go to the postings for a couple of minutes. I often tire of waiting and look at another site with no problems. So, I think the problem is limited to Barts server or serve location. I've often wondered if this problem depends on which direction you are coming into the server from or whether it happens to everybody. Bart if you are reading, please take no offense. This is the best chat line on the net. However, you might want to check this problem out if others are having similar delays.

WW: Have you ever been an employer? Do you know the government requirements that must be observed if you are an employer? Do you know why most large corporations are down-sizing? Do you know why most new jobs are low-paying service-sector jobs? Do you know why the stock market is soaring? Do you know why CEO's are compensated for profitability?

If you answer these questions, then I'll continue your discussion on giving power to unions.

ELDO: Anyone who is a progressive and can see the imbalances growing between the wealthy few and the ever more insecure workers has to support the Teamsters. The Republican Party and its conservative allies are nothing more than front men/women and slavish apologists for the filthy millionaire elite ( not all, some millionaires like B. Streisand/Jay Rockefeller/The Kennedys et al are progressives ) . Go AFL-CIO/Sweeney and God Bless the Teamsters!!!

Mike Sheiler; 21:32 Roozewelt Vield is bad place. Is Kapilatist Pigg Entriprize Zone to sell foreign goods to Amerikan Worker vit Kredit Kard.

Shek - I did invest $10k early last week - in RSA platinum stocks. If I hadn't done it then I would still do it on Monday ( though prices are higher ) .

Donald - How many oz. would it have taken to buy an '82 chevy in 1980 with gold at $800? Still, I get the point, and really am not arguing it long term. My only point was that there had been enough variation in gold value over the years that it wouldn't be a better correction factor for adjusting for inflation than those used in the chart I posted. I could be wrong. Do you have such a gold-adjusted DOW chart?

Aurophile -- Oh, we'll get inflation for sure! Not that much of it will get down to the 'real people'; Those who the economy depends on for its sales. Can't be done. The people are basically tapped out. The 'inflation' will be seen more in the 'non-ability to buy'. One can call it inflation or deflation. Amounts to the same thing in the end, and the particular way one looks at it. I view it from the perspective of a consumer. Others view it from the perspective of the number of dollars in circulation. Funny thing is that unless those dollars are in the hands of the 'consumers', it equates to deflation for all practical purposes. Falling prices in the midst of lots of dollars! Amazing, ain't it. I don't mind having a rebuttal on this.

I recently did some research. Looking at the gold and platinum monthly charts I noticed that the two have always tracked each other fairly close. However, this year that has not happened. Gold has some catching up to do if that trend is going to continue to happen. I suppose its only a matter of time.

Any comments!!!

WW - Cool it! I'm trying my best to become one of these "filthy millionaire elite".

Ron Carey is a sleeze...The Teamsters are sleeze....A cheap political game to stay in power and the workers are THE PAWNS...as usual! No corruption in the teamsters...no sir...the workers best interests are always of utmost importance to the teamsters...hahaha..they've rippep em a lot worse than any management,let alone the management of "union friendly" UPS....Go Replaement workers!!! it's a big world "out there" and unforunately ya gotta COMPETE ( a dirty word to some ) ...The teamsters..
..hahaha....Where's RR ( and I don't mean RUBIN ) when we need em....Was anti-union ( how surprising ) before movin ta Cape Breton and after livin over FIVE years in one of the most unionized areas of Canada I can't say I've become any more impressed by unions...This is a test laboratory and the grades are in kids....Unions=F.....Management=A+.....go capitalism and down with government....and crooked cynical unions!....

Eldorado: I too look at it from the view of the "consumer" since that's my primary profession at the moment. This is when the consumer normally takes back some of the controll from the producer. This is why the UPS strike is more than an isolated incident. Are we all to continue to be the prisoner of the banks and the lean and mean corporations? Not that I am out on the picket line mind you, but I am extremely interested in how it turns out. Will the middle class continue to take it on the chin or will they demand some equity as in 1945????????????? This is crucial to all investment decisions for the next 20 years.

Steve:: Most corps are downsizing b/c of the corporate welfare where the govt uses the US dollar to support third world economies so US companies can safely invest their to take advantage of the slave/child labor. This is why the panic over Mexico and MFN with China.

The whole right wing propaganda campaign to make people hate govt is at the very root of destroying individual rights and taking benefits like SS and Medicare away from those who have paid for it. Without the development of this cult the elitist's investment and financial picture would deteriorate. Starting with FDR up until Reagan the financial and living stds of Working Americans were improving. Reagan started the decline for most and the benefits for the relatively greedy few. The end of the Bull in financials will bring on a new PROGRESSIVE ERA!!

HERE'S JOHNNY.....

WW -- The Kennedy clan is almost broke because they squandered the oldmans loot. They haven't got a clue as to how you create wealth. They only know how to feel guilty about it and punish it. As for B. Streisand, well if you can't say...

As for the UPS union thing, isn't the real crux of the strike over control of the pension fund???? Does the union retain control or does UPS get to manage it? BTW, many of the UPS strikers are unhappy about the strike. It seems that everybody didn't get included in the vote. What a surprise. The rest of the stuff is B.S. ( Barbara S. )

I ain't a "gold bug"....I'm a "money bug"....Please god,make me a filthy millionaire......

Hey what can I say I am just a big Kennedy/Roosevelt/Gephardt Labor Union fan and Proud of my Progressive roots!!!

The platinum metals are supposedly in a squezee, due to Russia's inablity to make up the present requirements.
Gold is being held down -until recently and who really knows what else?- by a strong dollar, a stock bull market and a whole lot of negative press, probably payed for by those who are benefitting. As for the present state of their relationship with gold -IMHO beware.

The teamsters are a fun loving bunch. Just asked the hundred or so casino owners in Las Vegas were they got there capital to invest.

Nite...

WW - Progressives-- savers, inventors, producers. In that order.

tired: LOL!!!!! I'm thinking of hiring the Teamsters to manage my retirement fund. Or maybe Hillary. Isn't it weird that all the good movements are run by crooks? Or maybe not.........

Aurophile -- I DO know where you are coming from! There are, as usual, two ways look at it. The consumer continues to take it on the chin and we wind up in a very serious depression as they cannot be the 'consumers' of today or tomorrow, much less pay the bills of yesterday. Or, the third world nations hike their pay to their people to the extent that they too may become major consumers, thus we too can hike the pay here also for the same reasons. There is a third alternative that the one worlders won't like and that is to declare the borders as being inviolate and putting tariffs back in place. I'll simply put it this way: they can't have it ALL ways! Option 1 means deflation, even though ther may be more dollars about. Option 2 means growth with a bit of inflation, if THEY can pull it off. Option 3 might mean salvation before the end. But I'm thinking that even 3 might be a bit late since so much has been transferred abroad. Personally, I'm thinking foxhole!

Hey, 6pak ( ur 22:59 post ) , & Mike S.,
Since you guys are getting woo-woo spiritual & philosophical, thought I'd risk 'diving right in':
What about Passion for own's own dream, one's own passion in life...in other words, what about 'settling' for the passion for one's own unique, individual passion in life. When we get caught up in trying to identify, and/or pronounce "Truth", we are headed in the wrong direction, esp. if we intend to educate/enlighten someone else to 'our truth'....which may not be 'their truth', at all. We are, each and every one of us on this earth, inherently made of 'the stuff of integrity', just like gold is. And each of us creates our own reality perhaps, and our own truth. So maybe our integrity is assured, if we each but live our dream, our passion in life, passionately. Like Joseph Campbell said it: "follow your bliss". ... And here are a couple lines from ( Christain Bible ) Revelations, chap. 3, verse 18 ( -since you're referencing the Muslim Koran, & the Bible...in kitco's discussion grp., already! ) : ""I advise you to buy from Me gold refined by fire, that you may become rich...""

Hey most of the rich and privileged earned every penny of that inheritance and educational and career advantage from their family's wealth!! HAHA!! Savers/inventors/producres give me a break the goal of capital is to screw and steal from the foregoing!!!