Earl,

I think I occasionally peruse this site to get a sentiment reading on gold.. Many
here believe that the Dow/S&P are topping and Gold is bottoming.. I will remain
contrary to that until there is solid evidence to support it.. I think both will overshoot
buy a great margin to the upside and downside. It almost seems inevitable, to me. I would no more go long gold than I would short the S&P.. Anyone doing this,
short term, is still buying a ticket to disaster.. Better to stand aside if these are your
only choices. I have said this many times in the past and continue to stand firm.

I saw a silver graph that indicated the large specs were more net short than commercials. The lines actually crossed. Has this ever happened before? I don't ever remember seeing that, but the chart only went back 4 years.

Bob:@13:28 Thanks for taking the time to answer my query. I'm sure
other readers were also enlightened.

I have to agree with Puetz, David and G.Cole. A crash is on the horizon this fall in equities and this could be a bear trap rally we're experiencing now. In fact money will be leaving equities right now to go into real estate due to tax breaks. Thank congress, it's just another way to spread the money around. Whatever the case a large sell off is close in stocks, pneumonia will set in before the year is out. There really is no way out.

NotaGoldbug: Interesting theory about sentiment here at Kitco. I've hung around here long enough ( I think ) to have gone through several short-term sentiment changes. Gold always seems to rise after the cat-fights break out. While tht's nto happening now, there are definite sentiment changes among the regulars. Most of the old-timers ( in experience, not necessarily age ) are now calling for a top and at the very least a slide down in the DOW. That's never happened before. The DOW's gotta turn somewhere and it seems to me that after this almost straight up rise the charts look like it can't sustain much more. Also for EVERY goldbug here to turn bearish, gold would have to be hovering around $25 an oz. and even then some would probably be screaming that it's a buying opportunity! Anyway, just out of curiosity ( and because I don't know much ) if YOU were going to short the S&P what would you be looking to happen?

NotaGoldbug: I don't think there are many that would argue with that point of view. For some, it's like spring/fall chinook fishing. Ya gotta get yer rig on the bottom or ya get left out. Lose a lotta rigs that way though. ...... BTW, was that your chart? The reason I ask is; why does it only include action from the 96 high? It's always been my impression that the current ewave action should be viewed in the context of the past.

old,old story but maybe new to some..
Stock broker talking to investor.--,and don't I have a good stock for you??
Investor-- OK, buy 2000 shares.
few days later..
broker--stocks doing great, you need more..
Investor-- OK, another 3000 shares..
later..
broker--doing great, ect.
Investor-- Ok, another 10,000 shares..
for days later repeat, repeat, ect.
Then..Broker--stocks still doing great, more shares??
investor-- No, please sell all my holdings..
Broker-- To Who???

Strad: "Also for EVERY goldbug here to turn bearish, gold would have to be hovering around $25 an oz. and even then some would probably be screaming that it's a buying opportunity!" ....... LOL!! .... Now you hush. You know that's only partly true. Most of us have already stated for the record, that we'd be long gone in the $35-40 range. ..... unless, of course the XAU made a move toward 7.50. ..... :- ) )

Goose, that's exactly whats ahead. You won't be able to give stocks away. My theory is now the bloom is off the rose and real estate is now a major, major player to compete for investment dollars with the stock market. They said the stock market is the only game in town. Not anymore with tax free gains in real estate. The tide is turning and fast.

DA: Trading Places is on my all time favorite list too. In USA Today, article on El Nino agrees with your scenario. I think I'll join you. Do you know a URL address where I can watch OJ options?************* Capnkev; Cherokee:FWIW During recent foray into E.Ohio, Penna., Md., & W.Va witnessed corn crop disaster. Midwest still thick.

Earl
Vertical asymptote. Cool.

Front @ 22:43
Given a set of assumptions, your scenario is very valid, however, I guess that most investors seem to be "convinced that the prices after ANY fall will go back up". Billions in new pension $ hits the funds every month, as long as this expansion continues, look for those $ to find there way into stocks. Look at it this way, if absolutely everyone goes broke, all debts will be canceled and everyone gets to keep what they have. Nobody will attempt to take from another, and a new "golden" age of enlightenment and joy will reign for the next millennium. All you goldbugs want to screw up this beautiful future by having more than others. Get with the program, isnt a little joy and enlightenment exactly what the world needs???


D.A. @ 22:14
Regarding continued CB gold sales. I believe that CB gold sales are insignificant from a supply/demand standpoint. We need not count the ounces to find the significance is not to be found in their number, and others here can quote the numbers better than I. The true effects of western CB gold sales are psychological. That these ( as they would have us believe ) bastions of stability and conservatism would even consider selling their gold !!!!! The very concept is abhorrent to many -- some here in fact. There seems to be a very deep and true feeling by many old time international gold traders, the "Mustache Petes" ( if I may borrow from Mario Puzzo ) of the gold world, that the role of gold is changing. Many feel that gold will only regain its allure with the next crisis, although none appear to be on the horizon. I know there will be some here who will have a field day with that last sentence, but I tend to view the world with a bit rosier glasses than standard Kitco issue.

Now, for silver: Hey, Im a realist. As Eldorado stated earlier, over 5.55 could spell a rally, but a failure here and were headed to new lows. I am possibly only ( Ill take a stronger stance by the end of the week ) bearish on silver short term. I too, believe in the fundamentals, and silver is very attractive at these prices. I bought some last week. That rounds it out, in the last two months, I have purchased gold, silver, and platinum. Hey, the stuff is pretty cheap now.

6pak @ 21:37
We do not agree with our expectations of the future, but I can find no other fault with your assessment.

nomercy @ 20:07
I have gone into some detail in prior posts, aside from that, further CB gold sales are written all over these pages. Gold will go lower before it goes higher.

REAL ESTATE. sold, sold and sold. It's already here. Just wait till 98. Things are just warming up. The train is leaving "ALL ABOARD".

Savage ( !! ) 00:50
Lets hope El Nino does not make a strong appearance this year.
I still have LOTS more I can say about hurricanes:
Ignacio is brewing off the coast of Baja.......
NOOOOOOOOOOOOO!!!!!!!

There is a small opening gap left on the Sept S&P chart at 956.25 which should be filled within the next couple of weeks. At that point a rolling over should occur and a downward move toward 6500 should begin. The question is how long will it take, a few weeks or several months. My guess is sometime mid 1998 when the 4 year cycle low is due to bottom. Any major advances to new highs will bw limited by this cycle until next year.
The XAU can be counted with 5 waves down or 3 waves down from the 1996 highs. Right now what I am watching is the potential of a 90 and 60 year cycle low due in Oct. 97. ( Past, Present, Futures editor: James Flanagan ) for the metals and gold stocks. If these cycles bottom on schedule a powerful rally into Jan. 98 is possible.

Help! I want to buy an option but I'm not sure what I should do... A Feb Gold Call with strike price of 330. @700.00 or a Dec S&P 500 Put with a strike price of 850.@1200. Any suggestions or other alternatives I might consider?

"Nowhere else for the money to go". But once people start to see their stocks drop, can't they can find another place pretty fast ( ? ) Getting +3% in the bank sounds better than -25% in stocks. If Graham and Dod were around today what would they say, yikes! If a person waits for convincing evidence won't it be too late, investing is based on forecasting not hindsight.

And remember the story of grandfather Kennedy hearing the shoeshine boy giving stock tips in 1929, then he sold all his stocks on the basis that if interest in stocks has reached down to the most unlikely participants in society then the market must be at a top. He got out just before the crash. Now last week on kitco someone was saying that their gardener was talking about shorting a couple gold contracts.........

RJ: If you're given a lemon...make lemonade. ( But, I hope it's not too bad; my mother in law lives on the Gulf coast. ) Although, even here in Indiana, it's been the coolest August I can remember...c'est la vie. About gold...RJ, do you still predict 300?.....short term?

RJ, without gold we fold. The U.S.A does not want gold to head south from here. Contrary to popular opinion. They want gold to remain at a fair value. If gold sells off from here it would be very negitive for the economy. This could start a panic out of paper into gold, because it is way undervalued in relation to all other assets. The government wants equilibrium but not to the extreme, one way or another. This is why they passed tax savings when you go to sell your home. Real estate will now compete for investment dollars having a drag on equities. The scale was tilted in favor of stocks, but not anymore. Gold is near it's low.

APH: Do you agree with James Flanagan?? Esp. about Oct lows??

Lurker: Go with the December 850 put option on the S&P. It has the highest probability of being a successful trade -- in spite of what RJ says.

Tonight on the Business channel ( LA #22 ) Market Chart by
Frank Barbera, he oultined an interesting observation.
Namely, that the Gold Lease Rate had a substantial runup
about three months in ADVANCE of the subsequent 93 Gold
rally. He then went on to point out that from May to now
Gold Lease Rates are having a big runup and are presently
at the highest levels in eight months.
This prompts the question, historically do Gold Lease Rates
LEAD the Gold Market?? Cole, Vronsky ... anyone???

Ah, good to be off after 12 hours. Looks like the apocalypse has been delayed for another day. We got it all at Kitco--D.A., poorboys, Thailand, Inflation, Aurophile, Tortfeasor, cherokee. In other words--Rich man, poor man, beggar man, thief, doctor, lawyer, Indian chief.

Goldfinger @ Gold is near it's low.
How do you define near? Inches? Meters? Light Years?

Savage
Either 300 or 304 or 296 or $308.05 or somewhere around there. The first dip to or below 300 wont last long. Gold will go lower.

ALL: Thanks....g'nite.

Just when I get home and ready to party, everybody goes to bed. Oh well. For goldfvr--I went to the link with the charts you posted. Your commentary on the "heartbeat of gold" really perked up my ears. Would you elaborate?

Steve Puetz: Re your $200 and gold kicking ass: "tis a consummation to be devoutly wished for.

ARK: Did you know that ( and this is true ) a recent poll found that 18% of the people polled thot Joan of Ark was Noah's wife?
Moral of this story - never overestimate the intelligence of "the people".

NotaGoldbug: Your 00:07 - I come to the exact opposite of your conclusions re gold and the market. Both from a technical and fundamental standpoint.If you wish to be a contrarian, the general market is overvalued and gold is undervalued. And I do not think it will take a crisis to reverse both. It could be a gradual reversal and may have already started. The idea already submitted here that the UPS "settlement" may well start wage inflation warrants some attention. This will be a gradual thing. But few can deny that the figures such as Price-Earnings ratio, book to price, sales to price, etc. all are historically way out of kilter. And take a look at a long term chart of the Dow http://www.cpcug.org/user/invest/djicon.gif which is in constant ( 1997 ) dollars, and you will see that the Dow is at the same top line as it was in '29 and '66 with the bottoms at '33 and '82. My "fresh" investment money is going into the lazy man's bear fund, Rydex Ursa, and a little into more gold, altho I have always had a fair percent in the yellow metal as insurance.

Thers's something bothering me- about the action of the Markets.
We all seem to agree that a top is being formed etc. However, in looking at many individual stock chart patterns, I've come up with many that seem to be making bottoms. Granted they are smaller second tier types, but never the less, they look more bullish than bearish.
Could it be that the market hasn't seen its top, and that a type of rotation may be taking place?

Next; when considering what the shape of a large, long term, PARABOLA should look like, couldn't the next portion be a continuing of the uptrend but with a slower pace? Making the topping pattern more like a parabola pattern, both up and down? We here are all looking for a spike formation, and maybe what's in the cards isn't a spike after all.

Just something to think about!

A better chart ref in my 04:24 would have been http://www.investec.com/mocharts.html
Great charts and free.

Reify: You know its the end when the dogs run a little. The lack of belief in this decline is astonishing. When we fell 7% before everyone got beared up. In reality the world economic situation couldnt be worse. We are set for a bear of historical and mammoth proportions. All areas of the world are having a currency crisis or econ trouble or slowdown. Largest debtor nation US has been winning by default. All aboard her majesty's ship Titanic.

RJ- after reading your recent posts, I'm wandering why you are buying into the precious metals now, even though they are cheap, when the prudent way would dictate to wait until a bottom has been confirmed,
this especially in light of the fact that you are short term bearish?

Do you have any comments re my earlier comments about many small cap
stocks making bottoming patterns?

Princeton Economic Intitute:very bullish on gold for 2003 at which time
they think it will reach an all time high. They suggest that it is not
unrealistic that we could see gold below $300.00 during the next year.
They say in conclusion that " only a monthly closing by year end above $365.10 will warn that gold may NOT continue lower in 1998".

Good grief how can they arrive at 4 significant digits when making such a crude arm waving forecast. How do they know that it is not $365.20. Just like when they estimated if the US sold all it's gold, the price would go down to something like 218 or such.

Re:your post of 4:42--great charts--thanks. I wonder how many people who watch this site are putting their money where their mouths are?Stocks are greatly overvalued.Gold is greatly undervalued.Common sense dictates that equilibrium will eventually be established.I personally know a lot of "what if"ers. "What if" I bought S&P puts when Puetz was saying BUY!!"What if" I bought gold/shares/options/futures when George Cole said BUY!! So many people are afraid to put their gonads on the line when every fibre in their bodies is screaming at them to do so. They will soon be saying "I knew that!" when all is in chaos and will not make a cent out of the entire move.Forgive my ravings as in Oz we are on our fourth Victoria Bitters while you guys are on your first cup of coffee. By the way--The prestigious U.S. magazine-"Travel and Leisure" has just voted Sydney, Australia as the best city in the world for Yanks to have a holiday.SHHHHHHHH--please don't tell anyone as we already know this country is the world's best kept secret!! Also make sure you buy gold just before the 2000 olympics as we'll need a lot of it to hang around people's necks.

December gold off $1.30. World stock markets strong. Joberg gold index flat.

Shek: Thanks for the Strategic Investment info!

Today could be another good day for US. stocks, but a reversal is likely very shortly. Bad day ahead for gold, but here too a reversal is not far off.

6PAK, RJ: Re No place to put the money. My reading of history says that for the past 2000 years there has only been one time when that turned out to be true. That happened in 476AD. Are you saying that is what you expect?

Donald. I would say that 79 AD would be more appropriate!

As George said,equities rule yhe roost this mornin...Europe up accross the board; Hang Seng up378.41 ( 2.44% ) ; Nikkei 225 up 291.23 ( 1.54% ) and Malaysian composite up 44.26 ( 5.0% ) ...ABN Gold down 1.0; Dec. futures down .30...From Yahoo Hong Kong Gold report:"Hong Kong Gold dropped suddenly in the afternoon in aggressive European selling"....as more rumours of CB selling....London gold down 1.35 @ 322.10....Long Bond down one tick...

Donald--don't know if someone is paying you to sit there and feed us heaps of useful,enervating and downright interesting information but on behalf of all fellow lurkers I want to let you know how much we appreciate your postings. My 79 AD posting, by the way refers to Pompei.The inhabitants knew they were sitting on the edge of a volcano but did nothing about it. As in Martinique in 1949? when a nuee ardente descended on the city with 2000 degree hot gas etc. and wiped out 30000 people, the population of the good ol' U.S. of A. are sitting next to an over-ripe volcano and are blissfully counting their share market shekels every night before retiring. When the hot gas hits most will be immobilized, some will start to run--but all will be consumed!!--except of course the followers of Kitco, who have taken out golden volcano insurance.

All we hear about is rumors of CB sales. What about Bank of China sayung gold is important asset for a CB or RB India of India buying and Russia's prposed buying as well as Germany and Japan opposing selling.
Huh? Hello? Metinketh Wall St is behind the rumors to facilitate and provide cover for their control. From what I read the big countries are gold bulls/Aussies got a currency hit when they sold theirs. Just what the already questionable Euro needs LESS GOLD BACKING HA. The CB sales story is getting a little old and a little incredible.

Mornin Panda and thanks for the missive,which sounded right on the money....To keep the emotions out of it is the answer but often easier said than done...eh..Puetz ( 23:31 ) Thanks for the concern but.....I'm not sellin a share....

Paths and others. Re: Princeton Economics and Armstrong. I bet you did not know this. In the spring of '85, they were heavily SHORT gold. They lost a bundle for their followers on that one. Anyone watching care to research that to confirm or refute that?

Dec. Gold down 1.0 @ 325.5

Here is a great resource of current activity of volcanoes, seismic activity, oceanic and atmospheric conditions, etc. Also the latest on the El Nino of '97. Very easy to use and very comprehensive. http://hum.amu.edu.pl/~/zbzw/glob/glob1.htm

Everythings coming to a grinding halt! Technology is only a distraction
that has made a few very wealthy, and enabled me to invest in another toy. Well who needs it? Only our governments, so they can distract us
from what is really happening. What is happening? A greedy grab for all
that will only make humans obsolete. Any LIONS FORUM nut who comes anywhere near me better watch out.

HERE is the earth sciences link-- http:/hum.amu.edu.pl/~zbzw/glob/glob1.htm

Once more http://hum.amu.edu.pl/~zbzw/glob/glob1.htm

An exert from Jim Dines' 12 July 1997 newsletter.
"...Perhaps there is a 100-year cycle stretching back to the 1898-gold discovery in Alaska's Klondike by prospectors George Washington Carmack, Tagish Charlie and Skookum Jim in Bonanza Creek near Dawson City in the Yukon Territory. With its one-hundredth anniversary next year, much will be made about that Gold Rush and 1998's headlines might well stimulate renewed interest in gold..."

A little clarification!
Gold was discovered by Carmack & gang in 1897! ( not 1898 ) . 1898 is when the "Rush" eventually took place. Alaska does not and never did own ( and never will own ) the Yukon! Dawson City is in Canada believe it or not!
I just hope Jimmy Dines and Co. put more research into the rest of the "predictions" in his article as he did into his geography. The credibility of his cycle theory comes into question when it seems he does not even get his historical events right.

Just trying to keep people honest, and as usual not believing everything I read - even from fellow gold bugs.

It looks like another day of gold and silver dragging their posteriors through economic thorny marshes. My prediction still holds that the paper markets will be down today, Thursday and Friday. Hi, Ted, you must be busy--you see to be posting less. Here's a little something for humpday for all of you:

A pair of newlyweds arrive in the honeymoon suite and it is time for them to have a little talk.

The man says: "Honey, I've got to tell you something. I love you, but I am also crazy about golf. I like to play during all my free time, and that is not going to change. I'm going out for a game on the hotel links now."

"That's OK," says the bride. "I've got a secret too. I'm a
hooker."

She waits for his reaction.

He just smiles.

"Not a big deal," says her husband. "Just loosen your grip, open the club face, and concentrate on a clean, straight swing with lots of follow-through."

I took a walk lat night.
I looked up at the stars
To try to find an answer in my life
I chose a star for cherokee,
I chose a star for Mike Sheller
I chose 2 stars for my kids
And 1 star for my wife.
Something made me smile.
Something seemed to ease the pain
Something about the universe and how its all connected.

If you want to see the future, perhaps you must look to the past. Mike Sheller translates Fractual Theory into laymans terms - drawing prophetic parellels to the 1985 Gold market:
http://www.gold-eagle.com/gold_digest/astro818.html

George Soros comments, from Soros on Soros...page 87
"...because I saw a financial bubble developing in Japan in the mid-1980s and I speculated that it had to bust. I went short in the Japanese stock market because I expected the crash of 1987 to start in Japan. But in actual fact it started in the United States and I found myself short in Japan, and long in the United States, and I got badly hurt in the market at that time. But, the nature of the boom/bust process was very clear.

Japan had a very high savings rate, a strong currency, and extremely low inflation and interest rates, and a very highly priced stock market that enabled Japanese companies to raise capital at a very low cost, and gave them a competitive advantage. At the same time, Japan had a limited supply of land, which was reinforced by rigid regulations such as the Sunshine Laws, which resticted the building of high-rise buildings. So there a physical shortage and the cost of housing went up much faster than wages. This induced people to save more in order to buy a house. You had a self-reinforcing process at work to maximize savings and to minimize the rise in living standards. It was a machine designed to make Japan the leading economy in the world, while keeping the Japanese working hard with very little reward. It was a very efficient machine that did, in fact, give Japan a competive advantage in practically everything. But, like all these self-reinforcing processes, it had a flaw in it. It exacerbared the difference between people who owned houses, and people who didn't own one. This became a divise social force. The resentment against the system grew until eventually there was a political upheavel....

re: my 07:38 post.
The newletter I refer to was on Veronsky's site.
http://www.gold-eagle.com/editorials/dines712.html

"...I misjudged somewhat the timing of this bust, and I got hurt in 1987. There was an artificial extension of the boom after 1987. The Ministry of finance prevented a bust in 1987 by propping up the market. Then it embarked on a deliberate policy of providing liquidity to the world. I remember meeting a Japanese official who spelled out to me. He said that the crash of 1987 won't have any consequences similar to the crash of 1929 because Japan was ready to step into the breech of supply liquidity to the world. They wanted their financial clout to match their industrial clout. As you will recall, after 1987, Japanese banks become the major lenders in the world; Mitsubishi Real Estate bought Rockfeller Center. But this time the Japanese overreached themselves. The Japanese financial bubble continued to swell and the overseas lending and investment boom came to a bad end. Whe the Japanese Central bank finally deflated the financial bubble, Japanese banks were left with an awful lot of bad debts from which they are still suffering. Most financial investments abroad have gone sour, which has been an important factor in the recent large repatriation of capital. When the bear market finally came, we were still around to take advantage of it. It came in 1990, as I recall. But I must give the Japanese authorities credit: they managed to deflate the bubble without a bust. It was perhaps the largest bubble ever deflated in an orderly manner rather than through a catastrophic collapse..."

No website completely covers important world events and happenings like GOLD-EAGLE's "Global News." Therefore, we changed the section name from "Daily News" to "Global News" - grouped by continents:
http://www.gold-eagle.com/daily_news.html

Mornin Tort: Was just about to say the same thing about YOU...Good joke!
....looks like "paper" has the upper hand so far today.....

Will demi-god AG & Rubin be able to do the same? ...we are only in the beginning of the moment of truth! The next 6-18 months are going to be 'very interesting times'.
Yes let the CB's sell gold....thus far over 1000 tons have been dumped by Holland, Belgium and Australia ( 1996-1997 ) to 'contain' the contrarian element, and the effect has been minimal.
The heat is on....and its not on goldbugs!

Reify ( 4:42 ) Seems to me we've been having "sector roatation" for the past few years,instead of a general overall market decline....IMHO sector switchin in MF's is one of the prime factors in this phenomenon....

A man walks into a bar.There's a beautiful woman sitting there,and they sit and have a drink together.She leans over and says"I want you to make me feel like a real woman." So he takes off his shirt and says,"here iron this"

AMNESTY: Keep looking for the BIG answers. You will find the peace that passes all understanding. RJ: October Platinum may have to come back to 406-407 before completing its abc correction of this upwave. That may give gold time to come back to around 317-19. Perhaps all the metals will rally from there if PT is to start up again. 6PAK: "The war mentality" of central bankers today is a war on gold. It is not ideological, it is not personal. it is about "money." Central banking was founded on gold as THE asset. Just as western civilization was founded on certain spiritual and moral principles. Take away foundations and you get a mere grab for bucks. What is left when spirit and ideals are gone? Material expediency. Gold pays no interest. Paper do. Sell gold, buy paper. End of story. It's indeed a new "error". Enjoy. The paper WILL hit the fan in future.

Comex:Gold down 1.0; silver down 3.2 cents: PL @ unch; and PA down 7.50....

Trade deficit @ 8.2 Billion...narrowed by 14.2% ( much more than EXPECTED )

Earl....re yours of Tue 21:35. I agree with you, limited government
is the best government. I am simply saying let us do the doable.
We are not going to eliminate the corporate or individual tax
system. Let's change it!

Got a deal for you, let me know what I can do to bring about a
limited government, if you will fax our friends in Washington and
tell them to create a fair, simple tax system.

Silver Trading - The trade comment I made yesterday would still seem to be in effect for today. Amazing quiet sideways action after recent volatility!

Initial reaction of the S+P 500 to good trade number was to DROP...

The looming financial catastrophe in Asia will be witnessed by the entire world, and in real time. How can Latin America and EMU countries avoid this same fate? Answer-they can't. And what about Japan? Are they going to withstand as the economies of Thailand, Indonesia, Malaysia, the Phillipines, Korea, and Hong Kong are laid waste to? An economic tsunami, starting in the Western Pacific, will produce tidal waves that will affect us all.

Mike - did you get my e-mail? I have been having ISP problems and not sure if everything is being sent or received.

Good one Auric!

SILVERBUM: Thanks for the kind words. Nobody pays me, I do it for fun. We are all the same. I find myself with my red light flashing saying I am low on gas but I keep on going because there HAS to be a cheaper station down the road. Never buy gas right at the exit. Dumb, but its my nature.

On the news tonight, is it El Nino that's belting the crap out of poor old Chile, or is there a second brat on the other side of the Americas?. Ten years rain fall in TWO DAYS! Phew, that's some punishment.

RJ and Central Bank: The western CBs have been gradually reducing their gold holdings for many years. What is going on today really is not much different from the long-term trend. But what is new today is the unprecedented propaganda campaign ( really outright psychological warfare ) that major elements of the financial establishment have launched against the yellow as well as the huge volume of cheap gold loans provided by the CBs to the short sellers.

December gold now down $1.50 but Joberg gold index still flat.

Ted: 9.2 ( out of 10 ) .

Best non-Tortfeasor joke since 5/11/97

Play by play, minute by minute, second by second; sometimes watching this site is like driving a car while looking through a magnifying glass!
Guess were just impatient waiting for the inevitable.- Ditto that post on Donald; add G. Cole.- Auric! fine wit me lad, you slay us!!!!!!!!!!!

Gold Economics & Demand Trends GDT Archive
Gold Demand Trends

Press Release
Gold Demand Trends No. 20
For release: 20 August, 1997 ( not before 1.30 pm London time )
Gold demand at record high level in second quarter 1997

Gold demand in the markets served by the World Gold Council - accounting for
about 80% of the global total - reached a record 723 tonnes in the second quarter
of 1997. That represents an 11% increase over the same period of 1996. Coming
after the highest quarterly demand ever recorded in the first quarter, the latest
figures bring the total for the first six months of 1997 to 1,493 tonnes, 14% ahead of
the same stage of last year and a record for the first half. Demand in the
developing countries of Asia, the Middle East, India and Latin America rose.

These are the main findings in the latest issue of the World Gold
Councils quarterly survey Gold Demand Trends, published
today. Commenting on the findings, a spokesperson said:

"Jewellery demand was once again the cornerstone of the
sparkling performance in the second quarter, with a gain of 9% to
600 tonnes. In addition, the continued revival in bar and coin
demand played an increasingly significant role, with bars and
coins rising 27% to 106 tonnes.

"Gold demand has remained strong into the beginning of the third
quarter. The record-breaking performance over the first half of
1997 provides grounds for optimism about the prospects for the
year as a whole. Increasing efforts to liberalise the international trade in gold, combined
with further growth in incomes in the key consuming areas, should bring another good
performance for physical demand in 1997."

Demand highlights in the second quarter of 1997 included:

In the developing markets, there was broad-based growth throughout the Middle
East, India, Asia and Latin America. The strongest performers among the leading
consuming countries included Turkey ( up 113% ) , India ( up 36% ) , Taiwan ( up 27% )
and Vietnam ( up 11% ) .
In the developed markets, overall demand was 5% lower. Jewellery demand eased
in the US, Europe and Japan, while investment demand rose 5%.
Demand in India reached a record level for any quarter.
Second quarter demand records were set in Hong Kong, Indonesia, Vietnam, the
Gulf States and Turkey.



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

World Gold Council
1 rue de la Rtisserie
CH-1204 Geneva 1
Switzerland

tel: ( +41 22 ) 311 96 66
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Contents and Web Edition

Gold Demand Trends No. 20
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20 August 1997
Copyright  1997 World Gold Council
All Rights Reserved
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Good Evening Kiwi,
You blokes sure have a good rugby side this year..Congrats on Dunedin
Now ... to Gold.

At 18:34 Tuesday there was some discussion about How much Gold there is
" in stock ". I went to http://www.gold.org/Pages/Gedt1.htm and clicked on " Gold as a Reserve Asset ", and it told me that Central Banks are estimated to hold 34,500 tonnes of Gold ( one-third of all Gold ever mined ) .
At US$323 per troy ounce, this is worth US$353 billion approx.

Just to put this in perspective, I then went to
http://www.publicdebt.treas.gov/opd/opdpenny.htm to find out how much paper money the good old US of A ( just ONE country ) had been manufacturing lately, and it showed US$184 billion more Government debt from July'96 to July'97.
Yes Josephine...in just 1 year.

It seems to me that some very powerful forces can't afford to have anyone thinking there is an alternative store of value to US Government Debt !
In the FWIW category, Australia's largest Gold Miner, Normandy Mining Ltd announced an annual profit of A$123 million ( US$91 million approx ) . It currently produces around 1.5 million troy ounces p.a..

The stock "bottomed" at $1.22 around July 7, traded up to $1.62 ,retraced to $1.47 ( approx 38.2% ) and closed today up 3c at $1.63 ,it's first close above $1.62 on this run up.
DISCLOSURE: I currently hold ZERO US Government Debt in my Investment
portfolio.

Happy Trading to all.

To get a near-term low... do we need an Institutional Panic? The very boys & girls that tell you not to panic, will panic. Then you'll see a real decline:
http://www.gold-eagle.com/gold_digest/inger818.html

Rich might get assets kicked. Good article.
http://www.smh.com.au/daily/content/970821/business/business10.html
To all: Am away for next week in Albany, on south coast of West Australia. Will pop back in then for a few days before the next trip off.
My call: If Dow exceeds 8300, gold PRICE is going DOWN, but gold stocks may not. A lot of bad news priced into gold stocks now ( looking forward ) . Re Asian currency problems. Stand by for more. This is Mexico ( 1993/94 ) revisited, but worse. We have been warned two years ago. The cracks are getting bigger. 4000-5000 on Dow looks right. Seems hard to see 300, unless we enter real dark ages. To quote Harry Schulz, the people that buy in at the bottom, are doing a moral favour for us all in establishing a bottom, rather than creating a bottomless pit. ( or something like that ) . They are not all crooks & thieves. What I wouldn't mind knowing, is when will Korea stockmkt bottom? If the currency stabilises, I wouldn't mind 20% return on cash. This, along with similar rates in Kenya etc, will eventually push US rates up, to at least 9% plus. THEN you will have "inflation" leading to a real depression. Remember, you don't detect the inflation that has been created afresh ( in the mkt ) , until you start PAYING for it, in the form of higher interest rates! Away!

CNBC -- MONEY WHEEL @ 11:30 ET. "The latest on gold, Which way is
is it headed?

John C: REF "US$353 Billions" - This figure is interesting correlation with Japanese US$385 billion ANNUAL liquidity, AS MENTIONED in Oracle's: "JAPAN BETWEEN A ROCK & A HARD SPOT."
http://www.gold-eagle.com/gold_digest/oracle714.html

In its 2nd Qtr 'Gold Demand Trends' World Gold Council, reports gold holdings of "All Countries" as published by the IMF.
1996 1997 1997 1997
Year March April May

All count. 906.1 894.7 897.5 897.3

Int'l Fin
Institut. 202.0 201.5 199.4 199.4

Total 1108.1 1096.2 1096.9 1096.7

Nomercy's Comments:
CB and institutional sales from 1995 to May 1997 have been 1.52% of reported holdings
http://www.gold.org/Pages/Gedt1.htm

Bernie: You'd like fairness in taxation and so would I. But that's where the similarity between us ends. Fairness to you -- and to all liberals -- is largely a matter of an ever increasing, punitive and confiscatory system of taxation on the very people in this society who are productive and hard-working. Why? Why, to pay for a looney, whacked-out, left-wing, hare-brained, immoral, theiving experiment in social engineering that has miserably failed in every single country of the world in which it has been tried.

Your call for fairness is clearly one to make corporations "pay" more, despite the very obvious fact that corporations in the end do not pay these taxes. We do. Yes we do, Bernie. YES WE DO! WAKE UP! Wanna pick my pocket to finance liberal pet projects meant to alleviate a f*****-up, hand-wringing, bed-wetting, social conscience? First clue: BYOB -- 'B' is for bandages.

As The Bard himself said of compassion, "The quality of mercy is not strain'd. It droppeth as the gentle rain from heaven upon the place beneath." We have NOTHING like true mercy and compassion emanating from Washington. Instead, what we do have is intimidation and a relentless hammering of propaganda crafted to mold public opinion and ensure compliance, whilst confiscating as much of the wealth of individuals as possible. It's a very ungentle rain, Bernie boy -- one of sledge hammers -- and it has nothing whatever to do with mercy or compassion or social equality. It is theft of the most egregious kind, pure and simple.

Hidden taxes on consumer products already make up 43% of the cost of beer, 31% of the cost of a loaf of bread, 28% of the cost of eating out, 50% of an average phone bill and 72% of the cost of liquor. These hidden taxes are regressive, and they must be eliminated, not increased. Got that? "Corporate taxes" MUST be eliminated to ensure fairness. Any individual, any business, any conservative, any liberal, any patriot, any lover of liberty, anybody and anything that can find a way to deny this tax-sucking monster of a government a single penny of revenue has my undying admiration.

FREEEEEEEEDOMMMMMMM !!! ( Thanks William Wallace, and thanks, Oldman, for reminding me. )

I AM fighting for a fair and simple tax system. What are you doing? You are getting worked up about corporate boogeymen who are just doing what we all should do -- RESISSSSSSSSSST!!! The very sad story of the Mom and Pops has much, much, much more to do with a brutally cold modern business reality -- you must grow or die -- than it has to do with some boogeyman avoiding his taxes. And in what kind of marketplace did this reality rear its ugly head, Bernie? In a marketplace that has been so hideously perverted and distorted by BIG GOVERNMENT, BIG TAXES, AND SUFFOCATING REGULATION, that it's a wonder it's not much worse. Government is your enemy, Bernie. Not business.

I'll take you up on your offer to Earl: I'll write my congressman asking for a fair and simple tax system -- though I'd have better luck asking him to commit suicide -- if you'll do just one thing, Bernie. Just one thing. One thing. VOTE LIBERTARIAN! Deal? I didn't think so.

Rant Mode OFF.

%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%

"I want to die peacefully. In my sleep. Like my Grandfather . . . Not like his passengers."
-Unknown

%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%*%

Even with the better-than-expected showing in June, the trade
deficit for the first half of this year is running at an annual rate of
$111.1 billion, putting the country on track for its worst trade
performance since 1988.
http://www.washingtonpost.com/wp-srv/digest/biz1.htm

Mr. Savage ( dude ) - I am Always a giver, never a taker, give, give, give ;- ) . And even though I haven't been following FCOJ ( another wink ) , I have this URL to share. It has been posted many times ( because it is so gooood ) :
http://router.minot.com/~bohl/#OPTION

And speaking of OJ and El Nino ( weren't we? ) the weather will probably be the wild card in Florida more than Brazil. But it will be enough to put some bounce in the price. Let us look for some gooood limit moves during frost season. And let us take goooood advantage of the current ( imo ) looooow prices to buy some options. Buy a few now and sit, then buy a few down the road, and sit, always saving your dough for the real coupe that is bound to happen this year. IMNSHO ( today anyway ) this is as good a buy-if not better-as that gold stuff. Don't risk more than 10% of your 'gamble cash'. Looking over risk/reward this is a 'no brainer'...but, then again, I could be totally wrong ;- ) .

One more comment on the weather... yesterday was the strangest day I have seen in my neck of the woods ( just above Santa Barbara,CA ) EVER. We had thunder/lightining watches, the wind was Strong and hot ( like the Santa Ana's ) and humidity was wicked. I thought I was in Kansas. My farming friend/neighbor said if he was in Nebraska ( where he lived for a stint ) he would have stopped work for the day and headed for the shelter to wait for the tornados...wicked, wicked, wicked is the only way to describe it. This is when all the kooky piro's come out with there zippo's...oh god.
We had two fires set yesterday.

RJ - the comment to Front was a gem. You couldn't just lurk either, could you? Welcome back, semi-demi-Newporter. Now go out and kick the crap out of PL. I have not been able to get in ( missed out last week-thanking my lucky stars ) and have been w/w. This a.m. I just got in ( broker-dude Just called ) ...now the the cycle begins again. I am going to SQUEEZE every last dime out of this 1-2 yr. move...oh my! Still not in gold or silver ( after my last loss ) ...watching and waiting ( w/w ) for the moves south...dum dee dum ho hum dee dum...doodle doo dee doo...

Donald - I agree with silverbum...thanks. And please forgive me about my comment a while back regarding your grandfatherish age. You are only my fathers age ( still young ) . It's just that many of your earlier posts seemed to suggest that you were around during '29. Sorry...anyway I am still serious about feeding you grandkids plenty of Bosco...it is good for the soul and tastes wonderful and they will love you forever. Now, what happened in 476AD...I can't find my encarta CD.

PUETZ - I sure hope you're wrong...do you?

all - more favorites: good 'ol Jake http://www.trade-futures.com/reports.html

GVS/GVC? posted this one a while back, only problem is that it's updated in the a.m. "day late and a dollar short"?
http://tfc-charts.w2d.com/

hours of fun here:
http://www.compassfinancial.com/charts.html

AWAY! to purchase more oj calls...and drink it by the 15,000lb barrel ;-$

EB

sorry for the looong wind

Story on TVX gold and a mine in Czech with about 100 tons of gold. TVX hasn't decided if it's economical to mine it though.

http://biz.yahoo.com/finance/97/08/20/tvx_z0009_1.html

Political tags - such as royalist, communist, democrat, populist, fascist, liberal, conservative, and so forth - are never basic criteria. The human race divides politically into those who want people to be controlled and those who have no such desire. The former are idealists acting from the highest motives for the greatest good of the greatest number. The latter are surly curmudgeons, suspicious and lacking in altruism. But they are more comfortable neighbors than the other sort.

R. E Heinlien

Is Indonesia under a curse, or what? Check this out...earthquakes! http://www.nando.net/newsroom/ntn/world//082097/world21_21699.html

Brazil stocks are down 2.51%; does anyone have any news?

Bangladesh devalues currency, drivers riot over 57% fuel price increase.
http://cnn.com/WORLD/asiapcf/9708/19/RB000858.reut.html

Foreign investors taking profits in Brazilian shares.

RJ -- Everytime you kick that pile of gold, a little more falls through the cracks in the floor!

"476AD are you saying that is what you expect"
Sorry but, I found this remark funny : ) : ) I surely, do not know what
will happen. Except for a lot of chaos, and the investors, will be
without direction. Investors bank on experts to guide them, consider
all the investment letters, and tv ratings of business reporting. Yes,
the army of uniformed ( suits ) experts, brokers, fund managers,
this and that association experts, etc, etc, experts, experts, experts.

The best I could reference your 476AD is:
The western Roman Empire founded by Augustus in 27 BC ends formally
August 28 at Ravenna, although the Germanic tribes have long since
protected and run the empire.

The emperor Augustulus ( Romulus Augustus ) is deposed by the Herulian
( Saxon ) leader Odovacar ( Odoacer ) ;because he is a mere boy, Augustulus
is sent off to Naples with an annual pension of 6,000 pieces of gold.

The eastern emperior Zeno is forced to abdicate by his wife's uncle
Basiliscus who usurps the throne. Dispite intrigue and corruption, the
eastern ( Byzantine ) empire will survive for another 977 years.

977 years, pension of 6,000 pieces of gold. : ) : ) : ) take care.

My spanish isn't up to par...but it sounds like a pre-emptive strike ( they referred to it as a 'structural reform loan from IMF ) ? following up on your earlier post...perhaps somebody can translate?

Mircoles 20 de agosto de 1997










 Copyright 1997
La Nacin On Line
All rights reserved


Acuerdo con el FMI antes de las
elecciones

Fernndez dijo ayer en Washington que confa en
que la Argentina firmar el mes prximo un
crdito por U$S 1000 millones para reformas
estructurales.



El Gobierno y el Fondo Monetario Internacional ( FMI ) alcanzaron ayer en
Washington un "acuerdo tcnico", que les permitira anunciar el mes prximo un
crdito de facilidades ampliadas de 1000 millones de dlares.

El jefe de Gabinete, Jorge Rodrguez, y el ministro de Economa, Roque
Fernndez lograron en un almuerzo con el director gerente del FMI, Michel
Camdessus, dar un paso fundamental en su bsqueda por alcanzar el acuerdo
antes de las elecciones de octubre.

En una conferencia de prensa en la embajada argentina en Washington,
Fernndez asegur que junto con el FMIpodran anunciar el mes prximo "los
elementos bsicos" del acuerdo.

El acuerdo de reformas estructurales girar en torno de la reforma tributaria;
fortalecimiento del poder judicial, y la reforma laboral y de las obras sociales.
Por otra parte, Rodrguez dijo que el Banco Mundial acord nuevos prstamos
y la extensin de los ya iniciados por 4500 millones de dlares entre 1998 y el
2000.

Esos programas sern destinados a la reconversin de las obras sociales,
reforma judicial, y la ampliacin de programas de obras pblicas.

"En las conversaciones con el Fondo hemos avanzado lo suficiente para ser
optimistas de que vamos a poder anunciar elementos bsicos del acuerdo con
Michel Camdessus en la reunin ( anual del FMI ) de Hong Kong", afirm
Fernndez.


Control de gastos y dficit


Camdessus y el subdirector del FMI, Stanley Fischer, pusieron como
condiciones bsicas para el "acuerdo tcnico" que la Argentina se
comprometiera a no aumentar el gasto pblico y a bajar el dficit fiscal de
3000 millones de dlares anual.

Los funcionarios del organismo internacional tambin exigieron que el
financiamiento del plan de obras pblicas anunciado por el presidente Carlos
Menem figure en el presupuesto, aunque los fondos provengan de la venta del
Banco Hipotecario Nacional.

Rodrguez y Fernndez acordaron que trabajarn a "todo vapor" con la misin
tcnica del FMI que llegar maana, para arribar a la asamblea anual del
Fondo, en Hong Kong del 15 al 25 de septiembre, con los elementos bsicos
acordados.

El requerimiento ms importante que exige el FMI a la Argentina sigue siendo
la consolidacin de su situacin fiscal, reconoci Fernndez luego de haberse
reunido con funcionarios del FMIy almorzado con Camdessus.

El titular de Economa dijo que la Argentina cumplir su meta ampliada de un
dficit presupestario de 4500 millones de dlares en 1997.

"Estamos cumpliendo bien... Las cuentas pblicas estn bajo control", asegur
el ministro.

Las negociaciones para el crdito de facilidades ampliadas se harn sobre la
base de una reduccin gradual de ese dficit en tres aos sucesivos.

Fernndez estim que el acuerdo sera por 1000 millones de dlares, pero
seal que la cifra final saldr de la negociacin.

Rodrguez, por su parte, traz un panorama alentador de las perspectivas del
pas al sostener que la Argentina cumple sus metas fiscales, crece a una tasa
superior al 8 por ciento y que el crecimiento est teniendo impacto positivo
sobre los niveles de empleo.

Fernndez descart en tanto que la Argentina o Brasil se vean afectados por
los problemas financieros en el sudeste asitico.

This chart link has been floating around a few places. It uses a Java applet and its free for now, but don't know for how long. You can access real time indices charts. Stocks and futures charts on a delayed basis. Charts range from 1 minute to quarterly. ENJOY IT WHILE ITS FREE!!:

http://www.quote.com/cgi-bin/jchart-form?genApplet=yes

2 ( 9:29 ) If you only knew WHO I got that joke from...hehe...

The Japanese were net buyers of $5.6 bln of foreign bonds in June. The amount of net buying plunged from $16.3 bln in May
and a record high of $21.8 bln in April. Trading volume of foreign bonds also fell sharply by 10.0% to $222.4 bln, from $247.2
bln in May, and by 19.9% from $277.5 bln in April. The drop in actual purchases was particularly noteworthy. The amount of
buying was down 13.5% to $114.0 bln versus May's $131.7 bln, and down 23.9% versus April's $149.7 bln, confirming that
the yen's appreciation from 127 to 111 against the dollar has reawakened Japanese investors fears of forex risks, which
reduced their pace of foreign bond purchases.
http://www.businessweek.com/bwdaily/mmsview.htm

The historic adage that an ounce of gold should be worth the price of a good man's suit still holds today. Never mind that many of us think the suit is underpriced. Anyway, as far as benchmarkes go, I have a new data point to consider. While in the golf shop yesterday, I held a Scotty Cameron - Teryllium / Newport putter, by Titleist ( Fortune Brands ) that retails for $500. The salesman said they cannot keep them in stock. This is the putter used by Tiger Woods. Shouldn't an ounce of gold be worth more than a golf putter, relatively speaking ??? The putter had a "good feel" to it, I must say.

Dow up 53...XAU up .56...again out-performing gold....and that makes George happy....

Join the dots on these three reports;

Austria refuses to hand over gold to Holocaust victims
US official tells Swiss to pay more to Holocaust fund
BIS to provide 3.3 billion dollar loan to Thailand: report

Theory; Real bankers love gold, if you have it in your fort you can give poor people paper which says they can go away and earn more money for them. When things get nasty you burn all the paper and keep the gold.
Things got really nasty back in WWII and a lot of gold "changed" hands. However there is a problem because gold is indestructible and cannot be "cleansed" through the books it isn't too much trouble to identify which gold was who's...what to do with so much gold?.
Set up an "International Mother of all Banks" and sell ( give ) them an accepted level of gold assets which has been thoroughly washed through official refineries and markets. First though the price on the market has to be low enough for the Bank of International Settlements to buy gold assets so that it can be given the cleansed article.
Finally there needs to be a purpose for our new International bank, well where's a good currency crisis when your need one, I'm a big bank, I can create a purpose for myself and make money on the currency market at the same time...poor, poor Thailand.

..same rhetoric...no mention of dollar appreciation over the yen = non-competitive...
http://www.yahoo.com/headlines/970820/politics/stories/trade_1.html

They're just as happy as a FLIES in SH*T; for every market correction, a step back, then two steps foreward.

Stocks paying much less than 2% dividends and price to book values well over 4:1. It seems that only the Tulip Seed Merchants will survive, for they're selling the SH*T that the flies are buzzing to.

Currencies are crashing and the dollar is king. This with huge interest debt due along with principal payback requirements on T-bills and bonds. Hell print up some more money, they love the dollar. We couldn't have it any better - BUBBA as "PRESIDENT FOR LIFE".

You dont want gold at the price of nice men's socks which are now going for .75 at Montgomery Ward down from 3.00. Deflation my friends.

FROM MOUNTAIN MEDIA
THE LIBERTARIAN, By Vin Suprynowicz
The tides of history
Correspondent J.P. wrote to ask if it's an official Libertarian Party
stance that "taxation is theft," reporting he has read one recent reviewer "using this argument to ridicule the Libertarian Party and to suggest that it has been taken over by anarchists."
Long-time Arizona Libertarian Party Chairman Rick Tompkins, who would
never claim to speak for the national Libertarian Party as a whole,
replied:
...Your reviewer, Mr. H., sounds as if he basks in the glory of agreement
with all the tyrants of history, from Pol Pot to Hitler and Mussolini, from FDR and Stalin to WJC. And let us not leave out our current Congress -- the Great Republican Revolution!
I take the term "taxation" to mean the confiscation of money or other
property from people without their express consent as to the amount, the
time, and the purpose. In other words, it is a classic example of the
initiation of force. To say that taxation is merely theft is to understate the issue, and to downplay the truth. A thief, in most cases, strikes a given victim very few times, most often only once. And a typical thief does not try to convince the victim that it's her patriotic duty to submit to the theft, or that it's for "the good of all" ( those who apologize for taxation are normally reluctant to say "for the good of the collective" which means, of course, for the good of those who wield political power ) . Taxation is far greater an evil than theft. It is a form of slavery. If you cannot choose the disposition of your property, you are a slave. If you must ask permission to work, and/or pay involuntary tribute to anyone from your wages, you are a slave. If you are not allowed to dispose of your life ( another way of defining money, since it represents portions of your time and effort, which is what your life is composed of ) in the time, manner and amount of your choosing, you are a slave. How is it that so many have so much difficulty with this?
And spare me the arguments that begin with, "But how could we
( whatever ) if there was no taxation?" If a person will not concede the
moral wrongness of forcible confiscation of property, no fruitful
discussion on this subject is possible. Without first getting an
understanding that taxation is wrong, no serious effort will be made to
find an ethical and moral way to do "whatever."

Though Mr. Tompkins needs no help, I took the liberty of adding: Furthermore, those who want to enjoy the "benefits" of taxation ( a "free"
school, a "free" highway ) generally prefer to do so without acknowledging
the uncomfortable fact that they supported the underlying, convenient
theft. Thus, the taxmen and their supporters inevitably drag us into a
culture of lies and deceit, which must in the end corrode and destroy all
that is good in any culture, finally rendering the language so twisted and full of euphemism and misnomer that it becomes almost impossible to even DESCRIBE a moral system of exchange and equity, let alone claw our way up out of the pit to rediscover one.
"But all taxation is based on voluntary compliance," we are often told.
OK: Let us pass ordinances that dictate all tax collectors, from your
local town clerk to the IRS, may only open the envelopes that arrive in the mail, deposit the receipts in the government accounts, and report the
totals to the appropriate spending body -- be it City Council or Congress. They shall no longer be allowed to carry guns, knock on doors, issue liens or levies, send threatening letters, order cowering citizens to report "under threat of compulsory process," buffalo any employers into the form of third-party tribute extraction known as "withholding," operate kangaroo "tax courts," seize and auction off homes, cars, and bank accounts, suborn bank clerks into spying on and reporting our transactions under threat of "license revocation," etc. etc.
What do you think would happen to your level of "voluntary" compliance
after one year? After two? ( Frankly, I believe it might remain surprisingly high, when it comes to LOCAL levies to support the local firehouse, or snow-clearing by the local township, or whatever -- proving that the citizens WILL voluntarily pay reasonably realistic fees for necessary local services without coercion. But I assume the FEDERAL government, as we know it, would be gone within three years, at least west of the Alleghenies. While it might receive the same approximate percentage of the GNP as it received in the years 1790-1825 -- plenty to maintain the kind of small, defensive Navy that won the War of 1812 -- can anyone imagine the kind of wailing and rending of garments this would bring from the modern-day Potentates of the Potomac, and their lapdog press? ) "Voluntary" payments for goods or services received is indeed the answer. But by corrupting the very meaning of such words, the taxmen land us in a morally topsy-turvy purgatory, where we're too busy racing to the front of the trough before the gruel runs out to even recognize how wanting to feed our own family with our earnings has been redefined as "greed," how "rights" have been redefined from things the government can't interfere with into various forms of succor the government is "obliged" to provide to the protected classes through income-transfer schemes, etc. If you take my property by force, or under threat of force, that's theft. If you get 51 percent of my neighbors to "vote" that it's OK with them for you to take my property by force or threat of force, that's still theft. Constitutional republics sharply limit the possible government actions that can be "put to a vote," granting government only a short list of proper functions, while acknowledging private rights, uninfringeable by government ( even by a vote of a million-to-1 ) , which remain virtually innumerable.
Totalitarian slave states allow the gang in power to tax anything it
wants, at whatever level the "traffic will bear," to raise funds for any
purpose they can dream up, and cloak it all in legitimacy with vague
phrases about "the greater good of the people." The individual's life and
labor belong to the state, which informs him what portion of his time and
earnings he is allowed to use for his own purposes ... THIS year.
Totalitarian slave states are characterized by maintaining registration
systems for compulsory military service; by progressive limitations on the rights to self-defense and "dissident" speech and religious practice
( including the use of "forbidden" hallucinatory sacraments ) ; by the
operation of ever-expanding archipelagos of mandatory government youth
propaganda camps to break down the intergenerational transfer of the "old
ways of thought" about morality and the like ( turning the younger
generation into a legion of spies on their own parents ) ; by the gradual
conversion of banks and other previously "private" institutions into de
facto agents of government supervision and administration; and by the
increasingly sophisticated and intrusive numbering and tracking of all
citizens, who can be called in on pain of arrest at any time and required
to prove that they've been "contributing their fair share" to the state.
Totalitarian slave states and their adherents are also characterized by
a progressively more irate refusal to acknowledge that "taxation is theft."

Surely you won't deny that feeding my family is one of my "legitimate
functions." Send me your home address, and I'll stop by shortly to borrow your ATM card and access code number.
Don't worry -- I'll only take out of your bank account the amount that I
need to supplement my "legitimate functions" as a breadwinner ... each
week. If I don't have a right to arrange said transaction at gunpoint --
because it's "theft" -- then how can I delegate to a group of men who we
call "government," the right to do something which I, myself, have no right to do?
And if no individual citizens can "delegate" such a right to government,
because they do not HAVE such a right in the first place, where do we
suppose "government" gets the power to leech from our paychecks ( without
asking our deniable permission ) those sums to which it alone decides it has a "legitimate right?" Does our government have some rights, which are not delegated to it by the people? Where did it get those rights?
Or am I free to withhold all "requested" tax payments, other than those
which I decide are for "legitimate purposes?" Please explain how that would work, without resulting in the levying of my bank account and paychecks, and the seizure of my car by armed men, holding "Get Out of Jail Free" cards, and charged to arrest or shoot me should I resist.
Yes, minarchism verges on anarchism. I acknowledge the need for a minimal
system of courts, where property rights can be defended, contracts
enforced, and so forth. Is it impossible to fund such a system through
voluntary subscriptions, premiums and fee structures? How can we know until we try? Certainly many civil arbitration systems do indeed survive by such fees and assessments, mutually agreed upon, right now.
The key to your argument is: "While it would be nice if government could
be funded by donations, I am doubtful that it would be sufficient to fund a government able to protect individuals and their property. Even if it were possible to fund government through donations, there would still be the problem of free-riders benefitting at the expense of others."
The "free riders" don't bother me a bit ( how often have they been trotted
out now, anyway? ) -- they're inevitable up to a point. Though certainly a
system dependent on voluntary contract and voluntary charity couldn't do
any worse than our current scheme of ever-ballooning "entitlements" funded by taxes seized at gunpoint ... which only attracts and BREEDS dependent leeches, erecting an ever-more-rickety scaffolding to support an ever-growing mendicant class, until the whole shebang threatens to
collapse, on the "worthy poor" as well as the others.
In fact, tax-funded fire departments offer the identical services to
taxpayers, as to welfare leeches. The volunteer fire department in my
hometown has a much better system for dealing with free riders: Those who
pay a subscription fee of 100 dollars or so each year get their fires put
out for free ... and are welcomed as friends at the annual firemen's
barbeque. Those who decline to sign up in advance can still call to have a fire put out .. for which they will receive a bill for thousands of dollars ... at which point most sheepishly ask if they can start paying the annual fee. Which system better encourages forethought and civic participation, do you think?
Yet you contend: "While it would be nice if government could be funded by
donations, I am doubtful that it would be sufficient to fund a government
able to protect individuals and their property."
Similarly, "While it would be nice if a large enough army to defend
democracy could be raised through accepting volunteers, I am doubtful that it would be sufficient without the aid of conscription."
And, "While it would be nice if we could depend on the common sense and
decency of the populace to remain sober enough to safely staff the
factories and raise the children, I am doubtful that it would be sufficient without the threat of jailing anyone found consuming opium without a prescription."
How far, then, to: "While it would be nice if an armed populace could be
trusted to maintain a peaceful and civil environment, I am doubtful that it would be sufficient without armed government SWAT teams authorized to break into private homes with blank search warrants, seizing all private weapons and killing anyone who resists such a seizure ..."
and: "While it would be nice if we could depend on enough people
volunteering for vital defense work, I am doubtful that mere self-interest and happenstance would be sufficient to meet the needs of all the factories without some central government commissariat assigning and delivering workers, by skill category, to the industries where they are most needed...."
Once we accept the use of force for any purpose which government deems
"legitimate," with said legitimacy to be decided by a majority vote of any given group of political functionaries ... or even by a majority vote of the whipped-up mob as a whole ... where do we think it will end?
The Russians found out in the 1930s. The Germans found out in the 1940s.
The Chinese found out in the 1950s. The Cambodians found out in the 1970s. And it appears we are about to find out, too.
The alternative to attacking the legitimacy of this whole structure of
coercion AT ITS DEEPEST ROOT is to argue, "OK, let's be reasonable.
Obviously government has to be able to use force SOMETIMES, to perform a
few BASIC functions which we can all agree are "legitimate." But surely we can all agree government today has gone a bit overboard. So, where can we prune back some of its powers? Can we eliminate the ATF? What? Your
compromise offer is to combine the functions of the ATF under the FBI? OK, at least with that compromise offer we're talking, which is always a good start, so let's talk about that ... and increase the ATF budget by 20 percent next year so it can buy more machine guns and combat aircraft while we're talking? Well, OK, I guess so ...
This "moderate, gradualist" approach supposedly triumphed with the
ascension of the "moderate, Leadership Council branch" of the Democratic
party, promising to "reinvent government" and "end welfare" in 1992. This
approach was further endorsed by the triumph of the "radical" Republican
"Contract With America" and the election of the "wildly right-wing,
budget-slashing," Republican congressional class of 1994.
Well, it's been either three or five years, depending on how we count. Is
government engaging in far fewer blatantly unconstitutional activities now than it was in 1993, or 1991? Do fewer agencies have SWAT teams, with fewer members, less well-armed? Has the so-called civilian "assault weapon ban" been repealed, along with thousands of other laws that violate the 2nd Amendment? Have they given up passing laws designed to make it easier for government to track and monitor us ... not to mention all our transactions and "transfers of funds"?
Have many, many unconstitutional government agencies or departments been
completely closed down, starting with the EPA, the DOE, and the other DOE, as promised by the Republicans for 17 years? Are property seizures without due process DECLINING? Is the federal budget SMALLER? Since we're now told the "federal budget is balanced," has the Treasury department stopped issuing and selling new debt instruments?
Gosh, what a "revolution." Want to play the "politics" game some more?
If people won't voluntarily pay for enough "government" to protect the
innocent, and to help enforce property rights, then they shall not HAVE
enough government to perform those functions. The alternative -- "forcing
them to pay us to keep them good" -- will fail, with all the good and noble functions of government being torn down and thrown on the pyre along with the evil. In Paris from 1789 to 1793, did the mob carefully discern and preserve the king's "good works"? Did they spare the tax collectors who had only collected enough to fund "legitimate functions"?
Having seen what it is to live without that much government -- after the
systematic hunting down and mass execution of tens of thousands of past and current government employees, deserving and otherwise -- the people can then be expected to voluntarily gather together and re-establish such
minimal functions, and delegate to a few men the power to carry them out,
voluntarily subscribing to pay their salaries and costs. Then ... for a
time ... we shall again have a constitutional Republic.
Blood will be shed in the process. Jefferson warned us that we must be
willing to pay this price if we are to have freedom. I am willing to shed
my blood -- to give my life -- if it means my family can again live in
freedom. How many others will? One need not ( start ital ) favor ( end ital ) anarchy, to predict that anarchy is the inevitable result of the current relentless growth of faceless tyranny. Though, mind you, if I be branded an "anarchist" I won't lose an hour's sleep.
Our government schools teach us to define anarchy as a state of stark,
brutish violence and disorder, full of smoking ruins and random pain and
maiming. But this is only the propaganda of those who would have us believe that -- without the daily intercession of the Holy Mother Government -- we would devolve overnight to the status of grunting, lobotomized troglodytes. They might as well try to tell us that if we do not pay them a special tax each night at sunset, the sun will not rise again at morning. When Congress and the president stage their occasional dumb-show "standoff" over the federal budget, and the government "shuts down" for a day or a week, crime rates do not skyrocket. When a power failure knocks out the traffic lights, we all adopt the courteous fall-back decorum of the four-way stop, with hardly any running gun-battles breaking out over the right-of-way.
Are you really willing to concede that you only refrain from bashing the
fruit peddler over the head and stealing $3 worth of plums and peaches,
because you fear an armed policeman might hie into view in the next 60
seconds?
The marketplace, the cacophonous open-air bazaar operating without
government regulation, may appear unsightly and disordered to the
simpering, pasty-faced bureaucrat, with his cherished vision of humbled
subjects queuing up silently in long, shuffling lines at the counter of
some chilly, gray-green monopoly government store, each to be issued the
same, one-size-fits-all ration. But in fact, the bazaar is an example of
( start ital ) spontaneous ( end ital ) order without government ( anarchy, Greek; an-, without, archos, leader: ( start ital ) anarchos ( end ital ) , without a leader. ) The hagglers, the buyers and sellers and browsers, are not unhappy and wishful of the strong arm of "regulation" -- they are all there, laughing and haggling, shouting and gesturing, ( start ital ) voluntarily ( end ital ) .
And when they're done, by and large ( and this is what the bureaucrat
really hates ) , there is no "victim" in need of compensation -- buyer and
seller are both pleased.
The notion of a violent mankind awaiting the first opportunity to rape,
maim and plunder has no place in a republic based on our founding
principles of freedom, natural rights, and the consent of the governed. It is a corrosive, alien vision.
Not only that, it is a vision so paranoid, so pathological, as to be
self-fulfilling. Treat people long enough like criminals, like animals, to be manipulated and leashed and spied upon, and then .. only then ... will they eventually stoop to meet your expectations.
What government irrationally fears, it inevitably creates. As one harmless militia leader after another is framed by government agents provocateurs, railroaded, and imprisoned for decades, does anyone really believe the public -- particularly in the West and South -- will become LESS restive, LESS prone to acts of defiance and rebellion, MORE docile in their "voluntary compliance"?
Eventually, one who wonders whether or not he is a thief need only answer
one question: "Has your hand been cut off yet?" Eventually, one who
contends he is not a tyrant need rise in answer to only one question: "Have you not yet been hanged?"
Let the most skilled lawyer or pedagogue stand before the rising tide,
and try to convince the ocean by clever definitions, rationales, and
syllogisms not to wet his knees, not to finally rise to his waist and knock him from his feet.
The tides of history will decide who has been a "thief" ... and from that
judgment there will be no appeal.

Jack ( 14:57 ) Thank you very much for your kind and might I add,astute comments.

Really, let's put this "buys one good suit" thing to an objective test. After extensive research, here is exactly what one ounce of gold has been able to buy for the last 28 or so years:

1971 - The coat
1972 - The coat and the vest
1973 - The suit
1974 - The suit, a spare leisure suit and some bellbottom pants
1975 - Same as 74, without the bellbottoms
1976 - The suit
1977 - The suit, plus a pair of Earth shoes
1978 - The suit, and tickets to Cats
1979 - Two suits
1980 - Three suits
1981 - Two suits and a medium-quality trenchcoat
1982 - Two suits, alterations extra
1983 - Two suits
1984 - One suit, two shirts, a pair of Bass Weejuns
1985 - One suit, one pair of Bostonian wingtips
1986 - One suit, plus a new alternator ( installed ) in a 1976 Buick
1987 - Two suits, during 10% off end-of-month sale
1988 - Two summer suits
1989 - One Brooks Brothers suit, one Geoffrey Beane
1990 - One suit, 12 pairs of top-of-the-line support hose
1991 - One suit, two heavy LL Bean wool sweaters
1992 - One suit and one ticket to a local political fundraiser
1993 - One suit, one rush-hour parking ticket ( includes towing )
1994 - One suit, one pair Reebok crosstrainers
1995 - One suit, one Pierre Cardin belt, one off-the-rack knee brace
1996 - One suit with a Rush Limbaugh No Boundaries tie
1997 - One suit, if purchased at the right time
1998 - Three suits

can we put a size limit to a post. some of these copied news stories are getting to be a bit ridiculously long. why can't they be linked to , rather than copied? kitco is slow enough to load as it is!

The ignorant continue to hope beyond hope while the rest quietly start to act upon their fear!

I took you for a Robinsons/May-Co. sock-shopper. They have Monkey-Wards in your neck-'o-the-woods? btw, what's for lunch?

away...to get a good deal on socks...a good pair of socks is kinda like Gold...no?

EB

GVC: Regards your 14:40 post on that quote.com chart site: that is truly a "cat's meow" chart : ) http://www.quote.com/cgi-bin/jchart-form?genApplet=yet

Lurker909 -- I definitely agree with that assessment! Posted links are cheap! No copyright infringements either!

Keep on keepin' on!! Let's start using some 'line-item' power! You the Man! But don't start gettin' religious on me...and next time you and M.J. are in town, look me up and I'll set a tee time. Dig?

Away...to contribute to my IRA...viva la 18% and the rule of 72!

EB

The symbol for the XAU at the chart site I just posted is $xau.x

Jack -- It's a hell of a game, isn't it!

Lurker 909 -- I feel your pain.

Let's get ready to RUMBLE!!!!

AwAy$$$...to Mir and beyond...$$$$

EB ;-$ )

Thanks for the challenging thoughts from my college buddy Vin Suprynowicz, syndicated Libertarian columnist, whose thoughts can be found at http://www.nguworld.com/vindex

The arguments are compelling. Taxation, however, is strictly associated with residency, citizenship, purchasing, and certain other optional activities. Historically, for freedom from taxation it has been absolutely necessary that you or your Dad have absolute military authority within your sphere ( as Jesus said, Kings, and their children, don't pay taxes ) . If you don't like taxes, become a king. In America, the Constitution is the law, and the people are king, and theoretically, they can do whatever they want, including amending the Constitution ( or allowing an activist judiciary to amend it by stealth. But that is for another day. ) All of our country was ripped from the hands of King George III by military might and then handed over to "the people" corporately.

Are taxes too high? Well, too high is not the issue, the issue is, What are they being used for? If we had to pay 90% of our income to have a military adequate to keep our wives and daughters from becoming the playthings of invading troops, we would all pay gladly ( Yes ladies we live to protect you, so great is our esteem for the glorious essence that is womanhood! Although some of you are hellbent on cheapening it, nay, annihilating it! My wife and four daughters look, dress, and act - usually - like women, and by the grace of God my daughters will not be kissed on the lips until the day I give them away, presumably to someone who cherishes them like I do. ) So "high taxes" are not necessarily a problem ( except as in the case of arguably "inefficient" spending ) , but using tax money for purposes inappropriate to the government is the problem. The proper role of government is "to punish the evildoer," and our governments ( mostly US, Canada, Australia, and SA for this site ) do not limit themselves to that role. Obviously, this doesn't leave much for the Fed, the FEC, the ICC, the FDA, the FTC, etc. It is expensive to create and maintain that synthetic social fabric we call modern democracy. And, somehow, that has a bearing on investment in gold and gold stocks, I believe.

Vin and I attended Wesleyan University in the late 60s. We shared front desk duty at Cannata's Motor Inn in Middletown, Connecticut during winter break 1969-1970. I worked, I believe, all 24 hours New Year's Day. Mr. Cannata was kind enough to give us a room to sleep in. In return, we were each given 10 ounces of gold. Actually, we were paid in cash, but if we had bought gold ( this would have been difficult, but if accomplished, fiscally prudent ) we could have acquired approximately that amount with what we earned. Or, three nice suits and two pairs of shoes.

I assume you know to set the "Medium text" button at the top of the Kitco page to load only 25 words per post? I would not post long if I thought it would appear on anyone's screen without request ( 9743 words follow )

Dow up another 100. Is this 3 days in a row. God Bless America ( and this includes North, South, and Central America ) . WE ARE GOING TO THE MOON!! Whether we want to or not := )

Dow up another 100. December gold down $1.80. XAU and HUI up slightly. Joberg down slightly. Gold stocks continue to act very well all things considered. When the turn comes, the meltup in gold shares will astound.

Those who predicted a crash this week obviously jumped the gun. But watch out below when this upthrust exhausts itself, probably by Friday.

When Central Banks awake from their stupor & stop giving away their GOLD for free, supply side of metal fundamentals will develop an immediate vacuum & Gold prices will SOAR:
http://www.gold-eagle.com/gold_digest/butler816.html

NOMERCY: I reserve the right to be wrong but your ppost of 14:18 says that Argentina has reach an agreement in principal with the IMF for a 1 billion loan to be used for judicial, labor and social reforms. In return Argentina agreed to reduce its budget defecit by 3 billion. The agreement is subject to final approval by the full IMF at their meeting in Hong Kong on Sept 15 through 25th. Additionally, Argentina reached agreement with the World Bank for an extension of 4.5 Billion to be drawn starting 1998 and ending in 2000. I hope someone else can do a better job of translation. Hace cinquenta anos desde aprendo espanol.

Millennium bomb: Insurers act to stop
claims

WEDNESDAY AUGUST 20 1997

By Christopher Adams, Insurance Correspondent

British insurers are trying to prevent a flood of claims relating to the
"millennium bomb" by writing exclusion clauses into thousands of policies
that protect customers against the failure of electrical products.

Cornhill Insurance, which underwrites much of the extended warranty
cover on electrical goods, has forced several big retailers to accept
changes in policy wording.

Among the retailers affected are the Co-operative Wholesale Society,
Argos, John Lewis and House of Fraser.

Cornhill is thought to be the first insurance company to take action to limit
liabilities expected from disruption to computers' clocks at the start of the
new century.

Others are considering following its example and the Association of British
Insurers has commissioned solicitors to draft exclusion clauses for its
members.

Several insurers, including Royal & Sun Alliance, one of Britain's biggest,
have also introduced exclusion clauses into contracts covering computer
consultants for professional indemnity.

Insurers fear that many companies may seek to recoup the cost of
disruption by claiming on commercial insurance policies. The ABI
distributed a report to its members from solicitors Cameron & McKenna
which warned that insurers were likely to face a wide range of claims.

Insurance companies are likely to be most vulnerable in the areas of
product liability, professional indemnity, consequential loss and machinery
breakdown.

The millennium bomb will affect computers primarily. However, many
electrical products and machines, such as washing machines and
microwave ovens, also rely on so-called "embedded chips" and these are
also expected to suffer from the problem.

Cornhill said it had written the exclusion clauses into policies because it
was concerned that suppliers were not taking the millennium bomb
seriously enough. "What we're trying to do is make the manufacturers
wake up to the problem and do something about it."

It added that none of the retailers had opposed the exclusion clauses.

The Association of Insurance and Risk Managers, which represents
commercial insurance buyers, said it was deeply concerned by the insurers'
actions.

EB ( 15:31 ) Weren't me dude...I ain't TER....and no Monkey-Wards here but do have TWO Walmarts...can life get any better???...Bein on Atlantic time lunch is long past but for dinner is Confetti Spaghetti...

Jute: India acts to stop falling prices

Originally published: THURSDAY AUGUST 14 1997

By Kunal Bose in Calcutta

India will export raw jute in the current season ( July to June ) to arrest any
further fall in prices in the domestic market.

The collapse in jute prices has been triggered by a bumper Indian crop for
the second consecutive year. The 1997-98 crop is estimated at 10m bales
of 180kg each, compared with 10.2m bales last year.

The Jute Balers Association said that India would be able to sell jute in the
world market, in competition with Bangladesh, provided the government
sanctioned "an export subsidy as is available for non-traditional jute
products".

However, the Jute Corporation of India, a trading organisation owned by
the federal government, is confident that the country should be able to sell
a "reasonable quantity".

The total world trade in raw jute last year was more than 2m bales and the
leading importing countries were China, Pakistan, Brazil, Cuba, Belgium,
Russia, the UK and Ivory Coast.

Bangladesh raised its jute export to 2m bales in 1996-97 from 1.2m
bales a year earlier. The country will be an aggressive seller in the current
season as its crop is estimated at 5m bales, up by 500,000 bales over
1996-97.

But the emergence of China as a big importer of raw jute will help both
Bangladesh and India.

"China has drastically cut production of jute and the mills there are now
dependent on imported fibre. The Chinese import this year could be
around 1m bales. We should principally target China and Pakistan for
selling jute," an Indian trade official said.

The low prices of jute will lead to the revival of some of the spinning and
weaving capacities lying idle in Europe, Africa and Latin America.

The JBA said that even though India will be exporting jute this year, local
mills, which make fine yarns and fabrics for export, will still be importing
high quality fibre from Bangladesh. Last year, India imported 240,000
bales from Bangladesh.

The price of TD-4, the Indian benchmark grade of jute, is selling at Rs700
a quintal ( 100kg ) , against Rs1,100 a quintal a year ago.

The government is supporting jute prices in all growing centres so that the
minimum prices fixed for this season are not breached.

News on gold & silver demand in Pakistan.

Sorry. Here it is.
http://biz.yahoo.com/finance/97/08/18/z0009_47.html

Is rise of stocks inflationary?
http://www.phillynews.com:80/inquirer/97/Aug/15/business/CASS15.htm

2,how much of a suit.In 1970 an ounce of gold was an ounce of gold-the same quality then and now! I don't think you get much of a suit for what an ounce of gold brings.So lets compare quality to quality to get a true picture.The 5c chocolates were made thinner and thinner untill they had to raise the price.the quality of suits got worse and worse.Only gold kept the same quality!I bet,if it would not be for the increase and improved production in the gold mining industrie the gold price would be much higher now then 30 years ago,notwithstanding the political sculduggery going on.

Hong Kong: Authorities on alert over
threat to currency

Originally published: MONDAY AUGUST 18 1997

Speculators are eyeing the territory, says John Ridding

Hong Kong's financial authorities are on alert following signs that currency
speculators are turning their attention towards the territory.

After currency turmoil and de facto depreciations across south-east Asia,
the Hong Kong dollar stands alone in resisting the domino effect of falling
currencies.

"The Hong Kong dollar is now the last currency to be linked to the [US
dollar]," says the head of treasury at one European bank. "An assault is a
very different proposition from an attack on the baht or the ringgit, but the
signs are that some are willing to try."

Those signs were clear last Friday. Following selling pressure in London
and New York on Thursday, overnight interest rates reached 8 per cent -
some 150 basis points higher than on Thursday - as investors demanded
increased returns to offset currency risk.

Interbank rates rose to their highest levels since the 1995 Mexican peso
crisis, the last significant test of the Hong Kong dollar peg.

That peg, introduced in 1983 at a rate of HK$7.80 to the US dollar, has
become a pillar of Hong Kong's economic policy. Staunchly defended by
the territory's authorities, it is also backed by China, which regained
sovereignty over the territory last month. Joseph Yam, head of the Hong
Kong Monetary Authority, the de facto central bank, says the sacrifice of
autonomy required by the peg is a small price to pay for currency stability.

The authorities' determination is backed by economic fundamentals and
ammunition against speculators. While the economies of south-east Asia
have been weakened by fading export performance, over-extended banks
and foreign debt, Hong Kong's fundamentals are robust. Its balance of
payments current account is set to be in surplus this year and next, while
bank balance sheets are healthy.

Although depreciation in the region could erode the competitive edge of
Hong Kong exports, the territory's manufacturing sector now represents
less than 10 per cent of GDP, having shifted production across the border
to China or to south-east Asia.

In addition to foreign exchange reserves of just under US$70bn, Hong
Kong has been promised the backing of China's central bank in battles
against speculators.

Dai Xianglong, governor of the People's Bank of China, has said the
country's foreign reserves of more than US$120bn could be used to
defend Hong Kong's currency.

Unlike the south-east Asian economies, there is a relatively small number
of Hong Kong dollar market makers with large exposure to the currency.
That increases the HKMA's control and reduces the incentive for banks to
lend to speculators.

That all makes an assault on the Hong Kong dollar a tough proposition.
But the most important factor will be whether confidence in the exchange
rate system is maintained outside the money markets. The Hong Kong
public has shown few qualms about the currency. Jan Lee, chief economist
at Hongkong Bank sees little economic reason for that to change. "In the
short and medium term the threat to the Hong Kong dollar is political, not
economic," he says.

Others are less sanguine. "The dollar link is an oddity in today's markets
and was always likely to be tested after the handover," says the head of
treasury at one US bank. "The upheaval in the region has put Hong Kong
in speculators' sights."

When should I place my order for December S&P 850 puts? I do love a high probability trade... NOT ( this one ) !

AWAY...to cash in S&Pcalls $$$...and buy on the 'dip'...I live for what many, in this group, call 'lunacy'...here we come 8300, 8400, 8500, etc.

eb

Canadian owner shuts down Kazakhstan gold mine.
http://biz.yahoo.com/finance/97/08/19/y0023_z00_25.html

3 Stories of interest
Japan worries about Year 2000 problem
Lost clout of weak banks in Japan
Businesses plan 22% capital spending reduction ( Japan )

Albania seeks IMF bailout of Pyramid schemes.
http://web.albaniannews.com/albaniannews/headline/d1/text001.html

Germany: Rate rise less likely

WEDNESDAY AUGUST 20 1997

By Andrew Fisher in Frankfurt

Germany's money supply grew more slowly than expected in July, making
the chances of a rise in interest rates less likely when the Bundesbank
holds its first council meeting after the summer break tomorrow.

The central bank has already held off once this week from a possible
increase, leaving its regular securities repurchase ( repo ) rate unchanged
yesterday at 3 per cent.

But it is maintaining flexibility by deciding each week whether the repo
tender will be at a fixed rate - as at present - or variable, which would
allow the rate to move up.

The bank said M3 rose at an annualised rate of 5.7 per cent last month
against 6.4 per cent in June and 7 per cent in May.

For the second month running, it was within the Bundesbank's 1997
target range of 3.5 per cent to 6.5 per cent.

The slower growth rate reflected weaker bank lending to companies and
stronger monetary capital formation in which funds are moved to
longer-term securities outside M3.

Despite growing concern at the Bundesbank about inflation as a result of
the D-Mark's weakness against the dollar, economists generally expect no
change in interest rates at tomorrow's Bundesbank meeting.

This is partly because a rise could add to the markets' volatile mood.

Otmar Issing, a senior Bundesbank council member, has twice warned
that price trends were moving in the wrong direction.

The bank's latest monthly report also pointed to the need to watch
inflationary trends in view of the sharp weakening of the D-Mark.

But several regional members of the council have argued against a
precautionary rise in rates at present, saying this would disturb the
economic recovery, which has yet to make a dent in high unemployment
levels.

The repo rate, unchanged for a year, is generally thought by economists to
be the most likely one to change when the Bundesbank decides to act.

They do not expect the discount and Lombard rates, respectively at 2.5
per cent and 4.5 per cent, to be increased for some time.

Crash of 87: Lessons for the market virgins

SATURDAY AUGUST 16 1997

Those flush with windfalls may have forgotten Black Monday. Don't,
warns Gillian O'Connor

The Gadarene rush of mutual societies to the stock market this year has
created an estimated 6m extra personal stockmarket investors. Their free
shares in the Halifax, Alliance & Leicester, Woolwich and Norwich Union
are all worth considerably more than the original estimates. What a
pleasant place the stock market is.

These investment virgins may well have forgotten - or never knew - what
happens during a stock market crash. This article is designed to remind
them. What happened in the 1987 crash? On "Black Monday", October
19 1987, the FTSE 100 index fell by almost 250 points to just over 2,052,
a drop of nearly 11 per cent. The next day, it fell by just over 250 points, a
drop of more than 12 per cent. These were the worst two single-day falls
the London equity market recorded, in both absolute and percentage
terms.

Share prices finished that first week 22 per cent below their pre-crash
levels. By November 9, they were 32 per cent down.

And although the market finished December 1987 higher than it had been
at the beginning of January, anyone who bought when share prices were at
their peak in July 1987 had to wait five years until they rose substantially
above their buying levels. What happened to other world markets? The
UK crash was preceded by two days of falls on Wall Street at the end of
the previous week. The London stock market had been unable to respond
on the Friday because a freak gale closed down much of the City.

Most world markets were infected. On Black Monday, Wall Street fell by
over 20 per cent, Frankfurt by 9 per cent and Paris by 10 per cent. Hong
Kong, which dropped by 11 per cent, promptly closed down for a week.
Only Tokyo was relatively resilient. Did any types of security hold up? In
London, all sectors joined the fall. Although prices of some of the smaller
companies initially appeared to be holding up, this was because the large
investors concentrated their early sales on the large companies, where it
was easy to sell in size. Eventually, smaller company shares joined the rout.

Prices of gilt-edged stocks, which had been sliding earlier in the year,
initially fell further but then rose strongly as central banks pushed interest
rates lower.

The gold price, which had been rising strongly before the crash, continued
upwards but peaked at the end of the year. What caused the crash? Still a
very moot point. At the time, some economists put the fact that it occurred
when it did down to some awful US trade figures and an international
squabble about the Louvre currency agreement.

Others use hindsight to point to the "inevitability" of a correction of the
irrational exuberance of world equity markets before October. Share
prices on leading exchanges had roughly tripled in just five years and
looked high on conventional yardsticks. Warning indicators, such as a
wobble in UK share prices in August and the turn in the bond market, had
been ignored. Why did prices fall so fast? Although the UK market did not
touch bottom until around three weeks after Black Monday, the worst of
the damage was done in just two days. This was unprecedented: most
previous bear markets had developed over a period of years.

Again, no one is really quite sure why. At the time, though, some
commentators blamed computer-based share trading systems for the
speed of the collapse in Wall Street. How badly did private investors get
hurt? The speed of the crash, and busy telephone lines, meant that many
individuals found it impossible to sell their shares on the first day and very
difficult on the second. And, since many newer investors had started
buying shares only recently, many incurred large losses. The penny-share
speculators were particularly badly hurt.

To add insult to injury, some private investors did not receive any money
for their shares until weeks after they sold them. There had been a huge
log-jam in the stock exchange settlement system since the spring because
of the unusually heavy turnover during the boom.

This paperchase meant that some people who sold penny shares in the
aftermath of the crash had not yet received the share certificates they
should have got when they bought them. They then discovered to their
dismay that they would not get paid for the shares they had sold until the
certificate worked its way down the chain.

A few speculators who had traded on margin in options were wiped out.
What about unit trust investors? They also had some nasty surprises. Some
management groups suspended dealings temporarily. This meant that
investors were unable to sell their units, even if they could get through on
the telephone.

Suspension was particularly common among managers who had
traditionally priced their shares on an "historic" basis: ie, the investor could
check the selling price before he sold. Other managers allegedly failed to
answer their telephones.

Gold bears sense something is on the nose
http://www.afr.com.au/content/970821/market/markets5.html

Govt denies Wharf Union Strike breaking plan.
http://www.afr.com.au/content/970821/news/news3.html
Like saying the Pope denies he is Catholic.
Remember fight of bulls vs bears in Feb 96 ( when I started getting concerned abt the market ) . Quite possibly we will see a repeat. All eyes will be on the movement after the fight.

http://www.inven.com:7000/ Some good indicators, and fun too! Let us continue to share good links...yes? You're GrOOOvy BaBy!! That's FrEEdom, yeah!

away
eb

Vronsky - Ted Butler : August 16 1997, material is great, informative,
and a very clear explanation of the 15 years, of distorted, idiotic,
gold bullion "loaning"............Business, taking care of business, eh !

Ted Butler sent a letter to Honorable Allen Greenspan & Honorable Robert
E. Rubin, on April 08 1997. Has correspondence been received, by Ted
Butler, regarding his letter of April 08 1997. Thanks, Take care.

This gold/stock trends need some help to change. Hm .. let me see. On
Monday, I pulled the rest of my money out of stocks and stocks went up.
Now, if I bought some stocks back, I am sure the market would crash
before Friday!
If somebody can give me some assurance that the gold WILL rise in such
event, I am ready to deploy my successful timing of investment
strategies ;- )

Donald, would you please send me URL which contains "Japan worries about
Year 2000 problem" I can use that info in my real work.
If you don't want to polute Kitco, send me e-mail at medek@mitretek.org

TAKE A PEEK - If you'd like to see copies of the actual wills of some of the ( deceased ) rich and famous, go to
http://www.ca-probate.com/wills.htm. From Elvis to Richard Nixon to Ben Franklin, Babe Ruth, Jacqueline
Kennedy Onassis and John Lennon, they're there.

MIRO: I sent the whole story by e.mail.

Three Japanese stories. Sorry about the URL
http://www.nikkei.co.jp/enews/TNKS/page/ecoset.html

Dec. Gold up a DIME...time for a movie....ta ta

Problems in Brazil will not bother Argentina ( Heh, Heh )
http://biz.yahoo.com/finance/97/08/20/z0009_117.html

EB -- I'll give you a guess, if you only treat it as such. Just before labor day. Else, if we don't see new highs this spike up. That might be 'worrisome'.

Japan worries about "shaky" economy and impact on stocks.
http://biz.yahoo.com/finance/97/08/20/ntt_z0009_1.html

Donald, Argentina has a currency board. So does Hong kong, it will be interesting to see if these countries decide not to have currency boards.

JKSDJL: Honk Kong with 70 Billion in reserves will last a lot longer than Argentina. But I have the feeling that HK will not want to squander its reserves that way. They do a lot of business with countries in the area that have all devalued and have problems already. This thing is a real virus, Dollar Ebola.

EB: Buy that S&P December 850 put immediately. This is a normal bear market rally -- and it's essentially over. It's all down-hill for stocks for the next 2 weeks. Awaaaaay!

Danger signs seen in US economy.
http://washingtonpost.com:80/wp-srv/WPlate/1997-08/19/010l-081997-idx.html

Donald, you've herd I'm sure of Jim Blanchard III?, He's hawked Kazakstan Goldfields Corp. for a while there and I wonder if you've any thoughts on their prospects, ( E me if you like or I'll understand if you proceed on your Don Quixhoidal journeys!,it's great to have a true eccentric on our page ain't it? ) .

Duhhhhhh?????? Here's me E adress.....

EB ( dude ) : Thanks...it IS better to give than receive!

For what it is worth Jerry Favors told subscribers to go 50% short on a rally to 8022 on the DOW. We closed today exactly 8021, so according to him the next wave down should start NOW!

Savage - Sorry for the delay in answering your question. The last week of summer vacation for the kids and they're running me all over the place. Flanagan's newsletter "Past Present Futures" as a source for exit and entry prices on trades... I have not found to be very good. A few years ago when I followed him for a while I felt his drawdowns were to large. But he does extentsive work on cycle analysis and its fairly decent. If I remember correctly he picked the day of the low in silver in 1993 by one day and that call was made several months in advance. So I think its worth while watching for an Oct low.
SPZ7 - The S&P is within spitting range of the objective, the gap at 956. If you are a put buyer start scaling in over 955. Flanagan also has a top date in the S&P at the end of Aug or early Sept.

Japanese stocks which were up 135 at the open are now down 27.

Glenn: Thanks for the Jerry Favors info!

Miro: The bear trend in gold will change to bull when the masses see that the stock mania is over. This probably will require a lower high on this Dow rally followed by a lower low on the subsequent decline. If the next drop gets more than 10% below the 8300 peak, that would also convince many that a fundamental shift is taking place. Of course if the Dow blasts to 9000, new lows in the yellow can be expected.

This relationship does not necessarily apply on a day to day basis. Gold will not go up every time stocks fall sharply and visa versa. But the TRENDS in gold and stocks will continue in direct opposition to each other.

In view of Fridays 247 point plunge in the DOW, AUROPHILES prophetic erudite & incisive analysis is a must read by serious market students:
http://www.gold-eagle.com/gold_digest/Aurophile810.html

SANTIAGO, Chile ( CNN ) --
Skies were clearer in central Chile
Wednesday, after a deadly
four-day storm dumped up to 10
times more rain on the region than
it usually gets in a year. At least eight people drowned in churning
seas or flash floods.
http://www.cnn.com/WEATHER/9708/20/chile/

Robert Metz says Year 2000 will cost 20% more than the Viet Nam War.
http://www.talks.com/moneytree.html

6PAK, RJ:
USA Today thinks they have an answer to your question, if not stocks, Where?
http://www.usatoday.com:80/news/comment/colhenr.htm

Speaking of Jim Blanchard, in his August newsletter, there is a very interesting chart. I wish I could post it.

The upper chart shows the London PM gold fix for the last 10 years. The bottom chart shows the net Comex positions of large traders. It isn't clear what units these are in ( tons, koz, contracts, etc ) . Anyhow, the correlation between the moves in the metals prices and the level of shorts/longs is incredable - and very consistant. For 6 years, through about 1993, whenever the net postion of large traders moved from short to long by about 30,000 units, the price of gold would move up by about $50, and vice versa.

Then something happened! From 1993 on, the swings in the large trader positions became gigantic, roughly 2.5 to 3 times the size of the swings in the prior six years,however the impact on the price of gold associated with these swings was dramatically smaller. For instance the largest swing was around the beginning of 1996, when the trader position went from about 40,000 short around the end of 1995 to 80,000 long in early 1996, a total move of 120,000. The movement of gold price during this period was only about $30 up. Thus it seems like the impact of changes in short/long positions of the large traders was reduced by a factor of 6-8, and this change happened in a period of about a year.

First question for the experts - Can anyone tell me what happened to the market dynamics around the end of 1993 that would cause this major change? One explanation, though I am just guessing, is that this is when gold loans and leasing by the central banks started, thus increasing the available gold pool to be used for shorting etc., maybe by 10x. This availability could be the reason the magnitude of short/long swings increased by a factor to three. It could also explain why the sensitively to these swings decreased by a factor of 6-8, i.e. just too much of the stuff to push the price around.

Continuing, the whole point of Blanchard presenting this chart was to show that the short position now is at a record level, roughly -70,000, and that when this record position unwinds, the price of gold will soar.

My first comment. Shorts may be a record level today, but not impressively so.

Second, when the big traders position last went from -40,000 to +80,000, gold price only went from around $380 to $410. The implication to me is that when the current -80,000 short position unwinds, we can expect about a $20 movement in gold price. Not bad, but nothing to write home about. I seem to recall some on Kitco giving this massive short position much more significance than it seems to actually have. What am I missing?

George Cole: I hear you and agree. I just thought that I could speed up
the reversal process by buying some stocks back - with my luck
stocks would drop right that afternoon ;- )

Fidelity Select American Gold & Precious Metals Chart.
Ten market days ( seven hours / prices per day )
http://www.geocities.com/WallStreet/5969/agpm70.htm

DJ -- Possibly one major thing that you might be missing. Your evaluation depends on the shorts 'finding' the gold to cover with. Suppose none will be available?

Is this the Kazahstan Goldfields that you're interested in?
http://biz.yahoo.com/finance/97/08/20/y0023_z00_20.html

Eldorado - Wish I could post this chart so you could see it! In 1995 traders were 40,000 short. In less than 6-months they were 80,000 long! They found it then. Gold only moved $30. Currently they are short 70,000. It seems they will also find it now with no problem. If my analysis is correct, around 1993 the available gold pool grew by around 8-10x, maybe more. I'm a novice in all of this. Can anyone confirm when leasing/loaning started?

Eldorado: your comment on "shorts 'finding' the gold to cover with.
suppose none will be available" I am not so sure about it anymore. It
seams to me that in the "new era" nobody needs the "stuff". Stocks,
metals, commodities. Its all just trading, everybody taking bets that
itll go down or up, nobody asking for real delivery. We may as well
play virtual reality games. I think that is the biggest problem with
today markets - total disconnect of market from the reality and
underlying products it represents.

DJ -- Another thing that didn't happen was a bad stock market crash, or currency crisis happening. No real war conundrums either. No big public participation. Shoot, hardly anybodys participation. Gold could be found! Easily! Now, start adding up ALL those things that were not there then, and assume most of them will be there this time. And through in the thought that perhaps the CBs might close the spigot out of necessity! Now what might happen to the 'price'?

Miro -- Your assumptions are based on a continuation of 'confidence' in the papers. As has happened elsewheres, we see how rapidly this can and does evaporate. And, if there is any one country with a bad bottom line, it is US! We've simply been in the fortunate position of being the 'reserve' currency. A temporary respite!

Eldorado - Bear with me. I am only trying to make sense of this one issue, and get some feed back from those that may have some insight into it. Of course things can change in the future, for a variety of reasons. But if we have a better understanding of the markets dynamics today, we will be better able to predict the impact of these new events. Do you happen to know when loaning/leasing started in a big way?

Dec. Gold down .20

Hey Steve Puetz- you reckon another 200 pts straight up on the DOW tomorrow should do it?

Tally Ho

Tally

I don't know if it means anything but if you looked at Kitco 24 hrs gold
chart, gold traces yesterday's chart down to the last dot.
In addition, gold went pretty much flat across all markets - very little
up or downs. Does this mean that we reached a turning point ( again ) ?

ANYONE: What is the significance of the open interest drop in Dec. Gold from 120K to 116K.....??? ( during last two days )

DJ -- Futures markets are just such. CB lending/selling seem to be more of a recent activity, for 'political' reasons. But I cannot put any date on this. The way I basically trade, these kind of facts do not seem to be particularly pertinent. Perhaps someone else here can more appropriately answer that question. That was some interesting fact finding by you though! Thanks!

Savage -- Weak longs bailing! What else could it be? Can't say I blame them. There's money to be made in 'paper'! Interesting that open interest is only down by that much. I think more will be bailing out before this move down is over! I'm kind of looking for a nice deep spike to support! Perhaps a small bit beyond. That should give us 'propellant' for a few days up! Then we see where we're at.

RE your 21:14-That's an interesting read; not to change the subject, buton the subject of Blanchard and his letter could you comment:as I told Donald earlier, He's recomended Kazakstan Goldfields Corp, Standard Silver etc..,I follow what I can, What of the past recs of his letter and your faith in his recs?

IMF Approves $3.9 billion loan for Thailand.

http://canoe2.canoe.ca/BizTicker/CANOE-wire.IMF-Thailand.html

Loan package almost $17 billion - Contributions from - Japan - China -
The Bank for International Settlements ( the central bankers' bank )

I like golf and EB,but not gold.

6pak -- IMF money coming from US. Congress tacked 4.2 Billion on the annual foreign aid appropriations bill and earmarked it as 'special quota' for the IMF. Don't you just love it when the tax-payer here picks up the tab? Ah what the H_ll. It's just paper!

DJ: The COMEX short position of 80,000 is only the tip of the iceberg according to many. In 1993 the commodity and hedge funds had not been shorting gold to the extend they are today. Could it be that there is much more than the 150-175 tons shorted by large traders..how about 1500 tons and more. That is the number I read. Had to this the 3000+ tons borrowed for forward sales and the several hundred tons borrowed for gold loans and you get the idea... Of course forward sales and gold loans will be covered from future production...so they would not affect the price if a squeeze would start tomorrow... however over the long term, fabrication demand ( which is still expanding ) will do it.

badger - I have only been receiving the newsletter for a few months, and really haven't formed any opinion re: Jim's recommendations. It seems he is knowledgable and well respected. That why I subscribed. Sorry I can't be of help.

WJC@the White House -- Bet you got a BIG horde of it! Don't drop it on your foot.

6pak -- 4.2B - 3.9B. Wonder who got the 300M difference?

Canadian tax payer, also, paying the freight. USofA maybe exporting
it's debt. USofA may have a reason to bail out the Central Bankers.

Explain, why the hell Canada has to bail out these bastards. These
International Bankers have been the cause. Now they step in, an appear to
be the saviours, of free enterprise, sick eh!

Multi-national and Corporate welfare bums, eh!

Mom and Pop business are destroyed, yet, no salvation for honest folks.
These honest citizens, are forced into suicide or welfare, because
the free enterprise system states:" welfare is an evil."

DJ,

You've hit the nail on the head with your association of metal leasing with the "smothering" of the markets. It's obvious that bigger and bigger changes in net position movements by traders have been having smaller impacts on price changes. This, while the real deficits in gold and silver grow more extreme. It's totally insane. The leasing phenomenon can be the only logical explanation. While leasing came into to being 15 years ago, it's intensified from around 93, as you suspected. Remember, leasing is really selling, only the CB's don't have to report anything. That's why you'll never see a CB admit to leasing and why it's very difficult to quantify.The fact they they don't receive the proceeds of the sale probably doesn't bother them because it's not their gold and silver, it belongs to the people of the countries involved. The CB's do get the income, which they make sure to spend and brag about. They figure by the time their scam is discovered, they'll be long gone from office. In the meantime, they are dispossing of national assets for pennies on the dollar, and partying with the proceeds and the markets are severely out of wack due to their uneconomic dumping of gold and silver.

Eldo - you're right it can't last forever ( if I got your drift )

6Pak - I posted a couple of months ago I got replies from the Fed and Treasury, sort of what you'd expect. They thanked me and the Fed made a weak attempt to refute my contentions, but nothing to be proud of. As a coincidence I did get another letter dated Aug 7 ( which I didn't expect - coming three months after a follow up letter and phone conversation ) which they just thanked me and didn't bother attempting to refute anything. I guess that's why I wrote that recent piece on gold eagle. I don't think it's right to just reprint their responses, but I'll be glad to give you the names and dates if anyone wants to ask them directly.

Eldorado: I am into paper but thank you for the concern about my foot. As long as I am President gold will go nowhere and the stock market will continue to be the place for Americans to put their hard earned money. Thanks to Bob Rubin,gold has become a relic of the distant past and my advice to you would be to smarten up and invest in the "real" America.

WJC@Martha's Vinyard -- Oh, I have invested in middle America; Guns, gold and grub! I know the writing you all have put on the wall. It's just a matter of watching the BS fly now!

CC - I'm sure you are right. In fact Blanchard estimates there are currently 2,000 tons short. However, the graph shows the traders flat at the top of the Feb/Mar rally. So the 80,000 shorts are associated with a less than $30 drop in the price of gold. Doesn't it make sense to expect that we will get this $30 back when the short positions are unwound? Sounds reasonable.

Ted Butler -- You got my drift Juuuuust Riiiiight!

Eldorado: In such a great country how have you gotten so negative and hostile to our government that really does represent the middle class and the "small people". Buy some stock in America and reap the benefits as millions of other proud Americans have done.

WJC @ MV -- HAR! And HAR! Invest in a third world country to be? I DON'T think so!

WJC @ MV -- Wouldn't that be like investing in Cuba just before 'the revolution' happened? On top of that, Batista and his so-called corruption doesn't even come near what yours and your ilk does! Amazing, ain't it? Also, why would one want to invest in a plantation anyway?

DONALD: A real quick question. How many "Bernie Cornfelds" need
hangin'?

Edorado: No Eldorado,the USA will remain the best country in the world and to equate our great country to pre-revolution Cuba only shows your warped bias to everything that is good in our country. For the life of me I can't understand how you have developed such a negative attitude and I can only surmise that you were abused as a child and I feel for you if that is the case but don't take out your frustrations on our benevolent government.

While gold is now both long and short term in a bear market, the xau is still long term bullish and short term extremely bullish. All though this seems contradictory, that's the way I see these markets technically. The crb/bond ratio is now long term bullish which has negative implications for stocks. I agree with those who state that this is a short term bear market rally in stocks which is now about over.

ted butler - Thanks for your input. What you say makes sense to me. The irony of the whole thing is that traders make money on big price swings. Before the increase in the gold pool in 1993, they could make big money with small short positions. Now that there is all this gold available for shorting, and they are shorting in massive amounts, there is so much gold available that they can't make the price swing much. Much more must be invested for a much smaller return. There is some humor in this. By convincing the CB's to lease/loan more gold so they could make a killing, they actually killed the golden goose. Now there is just massive amounts of this stuff churning around the market. In electrical engineering, they call this an eddy current. It goes around and around, does no work, and just creates heat.

If anyone has sent me an e-mail lately and wondering why I have not replied, I would like all to know that I have been having computer problems recently and that is also why my messages have been so short and sweet ( ? ) in the last week or so. Keep getting cut-off ( Bobick syndrome ) . Will be fixed when I can get my son's computer genius friend over here! :- )

Do what I say, because I said so. Otherwise your liable to get rubbed out. Sell America short and go long and hard on GOLD. Do it, or answer to the King. Ya, you got it, the one and only Capon can take out many. Now hang your head down and go out and do what you have to do, otherwise face off with me.

Now I know we are close to a bottom! I've actually seen two golden colored bugs of the six legged variety in the last 3 days. I can truthfully say that I've never seen these bugs in the 15 years I've been here! Interesting that they show up now! An omen?

WJC -- NAH! Just bought up to know the difference between liberty and slavery. 'Course I understand that you camped out in a tree on campus for a week, mattress and all, smoking dope and trying to piss on some of those that happened to be in range. Interesting behavior, I must say! What the hell kind of up-bringing causes this kind of behavior?

Eldorado @ 23:09: After, reading my post, in reply to yours of 22:15.
It may appear that I was directing my remarks to you personally.
I was not, and sorry if it suggested such.

I was commenting on the central banks actions in the world. The central
bank issue, is as much a sore spot, for USofA citizens, as it is for
Canadian citizens. No, the USofA will not become a third world country,
nor, will Canada, both country's have good people, and honest people.
Thanks,take care.

Ted Butler @ 22:46: Thank you for your reply, and I am sorry, that you
did not get a positive response. I thank you for doing the letter thing,
Hell, I wish more of us would do such, yet, we do not. We say we will,
and that we should, but, we don't. We need more people that will, such
as you have. Thanks again. take care.

Act or get acted upon. Ya you got it. The one and only.

Al Capon:You can't even spell your own damn name right and the correct spelling IS CAPONE.

The "E" is silent, so I removed it. It's my name, I'll play with it if I want to. Now go run along before you get rubbed.

And don't talk back to me !

Now it's COPON! Will coupon be next?? Take a hike buddy!

DJ: That single post on Blanchard's chart created an interesting thread for the evening. Your last post ( 23:30 ) hit an important nail squarely on the head. The CBs, forward sellers and spec shorts have, in the space of 3 or 4 years, driven a single trading idea completely into the ground.

Now the question is: How long will it take them to recognise that their strategy has reached the point of diminishing returns??? Surely, it must be more and more apparent, as a greater number of short positions is showing less return. At the same time, the overall risk involved is at least as great and perhaps greater than it was even 1 year ago.

We may not need a calamitous event to change direction here. Merely, a recognition on the part of participants that the short horse has been ridden as far as it will go. If they are a lemming like bunch, there may be crush at the door to get out. ....... Thanks for the posts.

Your history, now stand aside Smuck.

6pak -- No offense can be taken when none was given. Actually, I don't know what you are talking about in that regard. You must have slid something right by me. In any case, no problemo. As far as a third world nation status goes, you may be right. That is something that time will tell. But third world status goes much further than how many bombs one has. I submit that our 'standard of living' will fall to near that level. I have no idea what may happen in the current so-called third world countries in that regard, whether they improve or get worse. I call it the new world odor syndrome, plantation style. And you can't say, with a bit of studying, that their goal is much other than that.

The gold market is not moving boys. Get off the pot and move the market fellas.

Ray: The DJIA will be lucky if it rallies 50 points any time tommorrow. Buy the S&P puts at your first chance. The next 2 weeks should be down very hard for stocks.

Hey Coupon,stick it!