Gold Discussion for Investors and Market Analysts

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(Fri Aug 22 1997 00:09)
@Haiku for today
Great Dow
stands against the wall
the night coming.

Yellow gold
floating beyond the mist
morning coming.

(Fri Aug 22 1997 00:18)

Try Tom's post of 16:02, that may make a believer of you?
GSC is correct about the banks, but I will not recommend puts on the bankers; because - if I say so - they will probably go up.

(Fri Aug 22 1997 00:26)
Thanx George Soros

Now why don't you convince Warren to use that approximate 2.2 billion to buy some stuff.

(Fri Aug 22 1997 00:26)
@ snake alert in Scandanavia

(Fri Aug 22 1997 00:31)

(Fri Aug 22 1997 01:14)
You Go Moon Man!
You're 23:40 is well said. You have a way about getting to the point, and Quick.

My ( SARCASTIC ) comment to 'Pitts' yesterday regarding the Dec. 850 Puts sparked some posts ( somone asked 'advice/comments' on shorting stocks or long gold ) . Some rather Zany posts, I might add. I would like to get this on record that I was in NO WAY serious and leaning heavily towards Biting sarcasm. I would not short the S&P or the DOW right now. The volatility for options is WAY TO HIGH! and WAY TO UNPREDICTABLE! for my taste.

I do, however, agree wholeheartedly with you MooneyManDude that if one is SOOOO certain ( I'm suprised we haven't had 'guarantees' ) that the Equities have topped that the BEST strategy ( in options ) is to SELL CALLS and NOT, NOT, NOT buy out-of-the-money puts that have Lousy risk/reward ratios and little chance of breaking even. Who's got the pelotas??? eh??

Puetz - with the money you're making from your book sales ( $29.00???/per and shouldn't you advertize elsewhere? ) and with all your knowledge about the imminent stock crash you must be shoveling money into out-of-the-money puts like there is NO TOMORROW, right? By this time next year you oughta be a gazillionare! The 'pundits' that really impress me are the ones that put MONEY on the line along with there 'predictions' many overpriced calls have you sold?? And you shouldn't be giving out advice to all the 'sheep-waiting-to-go-to-slaughter'...if I remember you're words to RJ...

Just say YES to selling volatility...

I'm going AWAY now...i get so wound up sometimes...


i will be watching those 850's like a hawk...prove me dumb...I eat my crow bbq'd over Red Oak...with a little '95 Martin Bros. Cabernet Etrusco...oh my!!!

Kommissar KGB
(Fri Aug 22 1997 01:19)
Vee pissed oft

I spend my vzacation vit vife and khildren in hidavay Dacha in Odessa; vil soon to return to USA.

Vee pissed oft that Kapitalist Gorilla Platinum Zalesman akkuse our daughta's ov being LA trash vomans and relatizes vit Kongressman Bob.

Vee hav good notzion to tell Kapo Godvater of Rocco's konnection vit kapitalist zalesman. Rocco iz protected by the vitness protection program guzs. Vee vil not report dis infohmation, so that KGB konnection with government vil not be hurt.

Zoviet satalites hav homed in on 4000 square kilometer area vom LA Zenter to check ver greedy kapilalist broker hide Zoviet Platinum.

Fireplug KGB Agent hot on trail.

The Last Goldbug
(Fri Aug 22 1997 01:51)
Bill Gates (win95)

Destroy the gold shorts and buy into reputed Central Bank sales and I will believe you.

(Fri Aug 22 1997 02:15)
Some Levity . . .
You fellows have provided me with so much information and entertainment, I feel obliged to reciprocate with a "late-nite joke."

A fellow walks into an empty bar, sits down and orders a drink. The bartender, having nothing better to do, stands alongside and engages in smalltalk. Suddenly the fellow says, "My gosh, I have an appointment with Bill tonite, and I'm going to be late . . ."

He brings up his hand, points his index finger up so as to resemble an antenna, and punches out a phone number on his palm. He then raises his hand to his ear, and speaking into his palm, says, "Bill - - I'm supposed to meet with you at 7:00, but I'm running behind and will be about an hour late. OK, see you then. Thanks and bye . . ."

The bartender just looks on. Suddenly the customer says, "My wife is expecting me for dinner . . . excuse me a moment." He then forms his hand, punches a number onto his palm, and begins, "Honey, I'm at the bar and I've got a 7PM with Bill - - - Yes, yes, I pad the electric bill, and please don't hold dinner for me."

He then turns to the bartender, and asks where the restroom is located. The bartender points, and the customer hurries in. After a bit, the bartender realizes the customer has been in the restroom for at least 20 minutes. "My gosh," he cries, "He'll be late for his meeting . . ."

The bartender rushes to the restroom, opens the door, and there is the customer spread eagle on the floor, buck naked, with a whole roll of toilet paper stuffed deeply up his butt . . . "My God, what has happened to you?" the bartender shouts as he runs to his aid . . .

The customer shouts, "Leave me alone - - I'm expecting a FAX . . ."

(Fri Aug 22 1997 02:19)
Japan Fun
Nikkei 225 closes at 18650.17. Down 506.95 or 2.65%, again. Buy gold or die you cross-eyed freaks.

(Fri Aug 22 1997 02:20)
Shorts ... continued
Glenn - Re: your 19:23 - You write, "Gold will not go up simply because of a large short position from the funds". This may be true. However, if the graph Blanchard used is accurate, there is a 1:1 correlation between price moves in gold, and changes in the long/short position of the big Comex traders. This is not my opinion, I'm just taking this information from the graph. In fact from the graph it seems the swings in the trader positions slightly precede the moves in the gold price. Do the traders cause the price movement, do they perceive the changes in the fundamentals that cause the price change, or do they just read the tea leaves correctly. This I can't say. What I can say is every large rapid price change in gold is associated with major swings in the long/short positions, and there are no major swings in the long/short positions that are not associated with respective price changes. And the magnitude of the swings in long/short positions correlate very well with the magnitude of the price changes. All this is true for the ten year period the graph covers. I would challenge you to find any other chart, whether it is oil production, stock prices, or bond yields that shows the same strong correlation with gold price swings as does the long/short position of big Comex traders. See if you can dig up the August issue of Blanchard's Gold Newsletter and look on page 4. It is really quite an enlightening chart. And please don't interpret my humble observations as an attack on you! This is the farthest thing from my mind. I read your posts with great anticipation and place a very high value on your opinions. I wish you all the best in your battles on the floor, and I'm sure that goes for all here on Kitco. We are all rooting for you!

(Fri Aug 22 1997 02:32)
Kommissar KGB you have just taken your last drink! hahahaha. The spuds
we distilled your vodka from makes very good indetectable poison. The
break fluid we added for a kick should have your head spinning any
minute. After that you will be cured. You will never drink the vodka
again. By the way all the platinum you had stashed in the shed, is now
ours hahahahahahaha. You dumb ruskies.

(Fri Aug 22 1997 02:35)
Bill Gates, you are a puppet on a string. Thats all!

(Fri Aug 22 1997 02:42)
Fool's Gold

Books coming out on Bre-X. Seems a lifetime ago.

Strad Master
(Fri Aug 22 1997 02:44)
BIG money!
EB, MOONEY, and STEVE PEUTZ: All this talk of December 850 S & P Puts got me curious, so I called my broker yesterday to inquire just how much they were selling for. Answer: 1810 Points at $5 a point or $9050.00!!!!! That's an awful lot to gamble unless that kind of money is pocket change. I'd have to be ABSOLUTELY sure that it was going to work out before I tried something like that. Don't get me wrong - you've posted some remarkably correct calls here at Kitco - but my dear friend Steve, with all due respect, are you THAT sure?

Strad Master
(Fri Aug 22 1997 02:46)
PUETZ: Sorry for the reversal of the E and U in your name. A typo that slipped away.

(Fri Aug 22 1997 02:47)
@animal farm
Whatever happened to Socks the CAT.

(Fri Aug 22 1997 05:14)

German stocks down nearly 3%

(Fri Aug 22 1997 05:14)
R.J.O. says to sit on the sidelines Friday and see which way the market goes.

(Fri Aug 22 1997 05:31)
Just read today that there are five books coming out on Bre-X.Why buy the books? Just read this and send your $29.95 to Silverbum c/o The Wizard of Oz.

(Fri Aug 22 1997 05:56)
@not available for comment
"Bre-X president David Walsh couldn't be reached for comment." Just remember Kitcoites, when you have done your dough on whatever investment you fancy--the president/chairman/broker/neighbor/friend/adviser "will not be available for comment!" Take responsibility for your own actions!!!

(Fri Aug 22 1997 05:57)
wonder if the CME has the mini S&P going yet. $50 ( say 920 t0 921 )
looks quite managable, as it would seem a certain way to close
out at a loss is to be in too big a contract size.

well, no longer short in gold, spooked by the lease rate like
evrybody else I suppose, sounds like the swiss central bankers are
on holiday. Maybe also some short of perceptual shift ( paradigm
no longer seems to have the mint of freshness about it ) with
the price supporting a higher lease rate, has interesting ramifications
if you think about it.

has anyone stopped to think how good hepcats call of $325 was?
acclimatise was the word he used. Come back hepcat! For good
advice you can call me anything you like.

Steve, you have a fan, am following your posts closely, will
check out the mini S&P with my broker on monday.

(Fri Aug 22 1997 06:21)
@mornin after
Seein alotta RED....minus signs that is,for Asia and Europe! Nikkei 225 down 506.95 ( 2.65% ) ; Hang Seng Seng down 224.28 ( 1.43% ) ; Indonesia down 4.75%; Thailand ( haha ) down 4.02% and Europe don't look much better with the Dax leading the way down @ down 3.32%....Surprisingly Gold ( EBN ) is down 1.35 and Silver is down 4 cents...What the hell is UP this mornin??? sure ain't the weather! or Sean Whelan.....

(Fri Aug 22 1997 06:28)
@the future
Dec. Gold down 1.60 @ 325...3---2--5--- ( where have I heard THAT number before??? and Silver down 4 cents @ 4.465...Will the "dipsters" bail out the world and Wall Street today or is this goin ta be another grim Friday for paper???.....With almost all of Asia down ( equities ) and their history of liking gold,why is it down??? Am full of questions with NO answers and wish I could find my old "magic eight" ball to give me a clue...Maybe Globex has a few answers....

(Fri Aug 22 1997 06:29)
TED: Still have a drizzle here; and a deluge in Europe you say? Just getting started this morning, still working on the first cup.

(Fri Aug 22 1997 06:32)
Globex report: S+P 55 @920.20 ( down 6.45 ) ...NSDQ @1112.20 ( down 9.05 )

(Fri Aug 22 1997 06:33)
Japan market, -506.95 ( -2.65% )
Germany market, -170.71 ( -4.01% )

(Fri Aug 22 1997 06:36)
Mornin Donald! Rain hasn't even gotten here yet but wind and cloud are here...I'd like to be working on my first cup but am afraid the coffee grinder will WAKE everyone up...The hell with em! off ta grind...and let the grounds fall where they may....Mornin Tort!!!!

(Fri Aug 22 1997 06:37)
TED: This is going to be a very serious day. That is the most red I have ever seen on Yahoo International Markets. Red is the color of deflation.

(Fri Aug 22 1997 06:39)
Dollar weak/Stocks weak/Gold down. If the first two persist our yellow and white should rally. Looks like there is some heavy manip to keep metals prices in check amid the growing turmoil. The latter should answer Ted's Query.

PS We Won!!!

(Fri Aug 22 1997 06:39)
ME Too
Ted, Everything was looking great until I look up Gold.
It just doesn't seem to fit in. I AGREE

(Fri Aug 22 1997 06:48)
BIS Press Release about Thailand.

(Fri Aug 22 1997 06:54)
Mernin all. Another nice day in the Wash DC environs. Looks like initial stk mkt rally over and leg three of leg one of the bear in full swing. Agree with WW that there is manip in gold when things get ruff. How long can it last? Maybe if stk bear overwhelms then gold bull will overwhelm. I think this could happen suddenly.

(Fri Aug 22 1997 06:57)
Hong Kong blames Wall Street "The region has been crushed"

(Fri Aug 22 1997 07:04)
@S&P options
A quick refresher course on S&P options for those with expendable $ and an opinion on market direction in these days of chaos.

(Fri Aug 22 1997 07:04)
South Korea says government making plans to stabilize financial markets.

(Fri Aug 22 1997 07:05)
Mornin WW! but in the LONG-RUN......YOU LOST! this manipulation stuff more of that paranoid conspiracy crap??? ...TGIF...Got a visitor from Vermont ( via Ireland ) WW and am gettin the LATEST warped news out of that state..

(Fri Aug 22 1997 07:13)
Large gold sell order when Europe opened this AM.

(Fri Aug 22 1997 07:17)
Let It Go
TW- I think your right on the money ( gold ) .

(Fri Aug 22 1997 07:17)
can anyone tell me what "plumb" means is it good or bad?

(Fri Aug 22 1997 07:19)
We did WIN. In the Long Run some Fat Cats in big Cos. might lose. This was a flat out victory for the progressive cause. The first of many I hope. I am glad Clinton didnt force a settlement. We owe him for that one. I suspect that Kennedy and other progressives in the legislature made sure the Administration did not intervene.

(Fri Aug 22 1997 07:23)
Jittery currency markets DETER physical buying of gold.

(Fri Aug 22 1997 07:28)
Lets Go
WW- Sorry about letting you out the last post, I agree.
It looks like Gold starting to climb up now.

(Fri Aug 22 1997 07:32)
STEVE: Plumb is a word derived from the Latin word for the metal lead. If someone says you are "Plumb dumb" you are lead headed and it is bad. If you are a surveyor using a "plumb line" a lead weight attached to a string, I guess it is good. A Plumber is one who works with lead. Water pipes originally being made of that metal.

(Fri Aug 22 1997 07:36)
Joke of the morn
Well the third leg of my market prophecy will come true today when the DOW and other paper markets will plumet considerably. Commodities as a whole will have a good day today. The glass gets cloudy now and I must post my joke and run.

A farmer dies and goes to hell.

While down there the Devil notices that the farmer is not suffering like
the rest. He checks the gauges and sees that it's 90 degrees and about 80% humidity. So he goes over to the farmer and asks why he's so happy.

The farmer says, "I like it here. The temperature is just like plowing my fields in June."

The Devil isn't happy with the farmer's answer and decides to get him, so
he goes over and turns up the temperature to 100 degrees and the humidity
to 90%. After turning everything up he goes looking for the farmer. He
finds him standing around just as happy as can be. The Devil quizzes the
farmer again as to why he's so happy.

The farmer says, "This is even better. It's like pulling weeds in the
fields during July."

The Devil, now upset, decides to really make the farmer suffer. He goes
over to the controls and turns the heat up to 120 degrees and the humidity
to 100%.

"Now lets see what the farmer is up to," he says. So he goes looking for
the farmer. He finds him sitting on the floor even happier then before.
The Devil can't figure it out. He asks the farmer why he's happy now.

The farmer replies, "This is great, it's just like working in the silo with my friends in August."

The Devil says, "That's it, I'll get this farmer." He goes over and turns the temperature down to a freezing 25 degrees. "Let's see what the farmer has to say about this."

The Devil looks around and finds the farmer jumping up and down for joy and yelling,


(Fri Aug 22 1997 07:38)
Globex Report
S&P 500 -605
NSDQ 100 -1725

(Fri Aug 22 1997 07:38)
Bonds and M3:
Bonds have not been acting well lately. M3 shows an increase of 10.3 billion in the latest week reported. M3 has been growing at a rate the fed can not ignore for much longer. Perhaps bonds are anticipating a move of some sort by the fed.

(Fri Aug 22 1997 07:39)
A close over 330 and we are off to the races. Silver should break through 5 by year end. Any thoughts on silver?

(Fri Aug 22 1997 07:41)
STEVE: An afterthought, if someone says you are "plumb on" that would mean that you are thinking the right way, in a straight way. Probably originated as a surveying term. If your plumb line was right on the mark you would shout "plumb on!" to the person sighting through the transit.

(Fri Aug 22 1997 07:44)
RE:x@animal farm
What happened to Socks the White House cat?

The same thing that happened to HEPCAT, and CAPON. And that we hope happens to his master, Bill.

bok, bok, bok,.....BAAWWKKKKK!!!!!!

(Fri Aug 22 1997 07:44)
What kind of Friday will this be?

George Cole
(Fri Aug 22 1997 07:45)
market manipulation
Just coincidence that we got a large gold sell order from Europe when turmoil in global markets is accelerating rapidly? Not bloody likely.

The western CBs and gold shorts will not lose control until investor demand for gold moves up substantially. And that won't happen until they are convinced we have entered a BEAR MARKET for financial assets, not another brief 10% correction.

(Fri Aug 22 1997 07:47)
It will be interesting to see the demand figures for the new Platinum eagle in a couple of weeks. If the mint is oversubscribed, where will they get more? Will they?

Donald: If the currencies are weak in the Pac-rim countries, why don't they buy gold? It would seem the logical thing to do.

WW: UPS lost market share, unions lost jobs, welfare workers recently hired are the first fired under new union tenure rules, so the poorest and weakest lost first and most. UPS cut stock price so share holders lost. Small business customers lost money because they couldn't move their product. The union is losing 15,000 jobs in what can only be described as a pyrrhic victory. Wage increases of 3% per year are hardly fodder for a victory dance. But hey, ole ron carey can still loot and pillage the pension plan! The only good news is that several new delivery companies ( non-union ) have entered the arena. Fedex ( non-union ) is stronger. Rumor is that former UPS employees and Fedex will team up to form a new company called FEDUP.

(Fri Aug 22 1997 07:50)
GSC What type of action do you expect in the metals today say between 2:15 and 2:30 PM EDT. Maybe another big sell order on another CB sell rumor.

(Fri Aug 22 1997 07:54)
Globex Report
Going Down- S&P 500 now -805

(Fri Aug 22 1997 07:58)
World stock markets-
...more to come?

(Fri Aug 22 1997 07:59)
SPEED: We are having a deflation. People need their currency to pay down their debt. There is no money left to buy gold, they are tapped out. This is the time for those who are debt free, and have currency, to meet the currency demand that the debtors have created. As debtors are the majority, and debt free creditors the minority, the demand for each group will be working toward a balance, wherever that might be. That is the basis for my Dow/Gold Ratio Theory

(Fri Aug 22 1997 08:01)
The great corporate profits mystery:
Where are the grand corporate profits that we have seen over the last few years coming from? It has to be increased productivity say some. Funny thing all the measures of productivity show no great increases. It must not show but is occurring anyway they say. Now we learn the great corporate profit machine is simple. You steal the pensions of 10 million long term employees. Lay them off, call it "downsizing", replace them with young workers who have low pension costs. This is possible because the current pension laws allow a corporation to heavily backload their pension costs. For each worker downsized about 100,000.00 to 200,000.00 ( my guess ) can now be flowed into profits over the next 10 or so years ( my guess ) . Mystery solved the great corporate profit machine is in large part simple theft. This theft required the cooperation of that former friend of the working man, the democratic party. The hundreds of phd economists in dc know what is going on. Another reason for the massive bribes, er contributions showered on dc lately.

(Fri Aug 22 1997 08:04)
Thailand: Central bank admits debt of $23.4bn

By Ted Bardacke in Bangkok and Leslie Crawford in Washington

Thailand's central bank said yesterday it had obligations of $23.4bn, equal
to about three-quarters of its foreign reserve holdings, due for payment
over the next 12 months.

The bank's admission is the strongest indication yet of the severity of the
country's currency crisis.

The bank said it had $14.8bn in offshore obligations, consisting of forward
currency contracts used to defend the baht before it was floated on July 2,
precipitating currency instability throughout the region. Some of these
contracts could be rolled over but at a high price. The remaining $8.6bn
were onshore obligations. The bank said these were normally rolled over
and would not adversely affect the international reserve position.

The Thai central bank is trying to be more financially transparent after a
$16.7bn International Monetary Fund rescue plan was formally announced
this week.

In Washington, Michel Camdessus, director-general of the IMF, said he
was encouraged by the bank's decision to be more open. He said it would
strengthen the bank's credibility internally and externally.

Mr Camdessus praised the speed with which Asian countries, led by Japan
and multilateral institutions, had clubbed together to provide the $16.7bn
emergency aid package. But he berated Thailand for failing to address its
economic problems sooner.

"The Thai authorities did not have their priorities in order. They were more
concerned with the country's economic slowdown than with the risk
embedded in running high current account deficits," he said. Chaiyawat
Wibulswasdi, central bank governor, said a bridging loan, announced
earlier this week, of $3.3bn from the Bank of International Settlements
would help immediate funding needs.

But European central bankers said the BIS money was subject to certain
conditions and was not ready to be disbursed. Mr Chaiyawat repeated
that the IMF package would not be enough if foreign banks failed to roll
over their short-term loans to the Thai private sector.

Many foreign bankers say that before they commit to roll-overs or extend
new funds they want to resolve the problem of approximately $2bn already
on loan to 58 finance companies suspended by the Thai authorities in the
past month. Creditors of 42 finance companies have been assured their
loans will be guaranteed by the government. Commitments on the other 16,
where the bulk of the foreign lending is concentrated, have been vague.

Siri Ganjarerndee, assistant central bank governor, said the government
was required by the IMF to run a Bt50bn ( $1.53bn ) budget surplus next
year to begin to pay for financial restructuring.

(Fri Aug 22 1997 08:15)
...more 'ball juggling' for the 'backroom boys'...
D. Brown, a former Arkansas state trooper who worked
on President Clinton's security detail when he was
governor of Arkansas, is prepared to tell independent counsel
Kenneth W. Starr that a man offered him $100,000 and a job
to influence his testimony in the Whitewater investigation.

(Fri Aug 22 1997 08:16)
Donald -- What's wrong with the story you posted at 07:23??? Currency instability causes gold price to fall? My, my. The spin masters are hard at work on this one!

(Fri Aug 22 1997 08:19)
Globex Report
Great Start, Now. S&P500 -1165
NSDQ100 -2125

(Fri Aug 22 1997 08:22)
Stalder--have you got a site for the Globex Reports? Thanx.

(Fri Aug 22 1997 08:22)
@leaving for work
Donald: Thanks

S&P futures are down 12-15 and fluctuating. It's going to be a down open for paper! Jimmy Rogers is doing a special at 4:50 EST on El Nio this afternoon on CNBC. If anybody can watch and report, it would be appreciated.

(Fri Aug 22 1997 08:25)
Early morning sell-off in the Long Bond!

(Fri Aug 22 1997 08:29)
Thailand- authorities underestimate seriousness of problem (IMF)
No one trusts the system here enough [to fill it with
money] because the money would just disappear."

The authorities' apparent lack of a plan to deal with
the mountain of bad debt in the Thai financial sector
remains the main worry of concerned observers.

The IMF has confirmed that none of the money can
be used to bail out bankrupt companies whose
expiration would probably tear great holes in the

(Fri Aug 22 1997 08:29)
Globex Site
Silverbaum- http://www.cme/cgi-bin/gfash.cgi

(Fri Aug 22 1997 08:32)
Stalder: Your GLOBEX location not working

(Fri Aug 22 1997 08:33)
@Globex site
Stalder--that one doesn't seem to work. Is it my server?

(Fri Aug 22 1997 08:33)
Silverbaum- Im in rush to go to work.

(Fri Aug 22 1997 08:39)
For those who care about such matters, TRADING LIMIT HALTS...

(Fri Aug 22 1997 08:40)
What a morning! Limit down open on the Globex...

(Fri Aug 22 1997 08:43)
Speed: Thx for the "UPS employees and Fedex will team up to form a new
company called FEDUP."

(Fri Aug 22 1997 08:43)
@S&P 500 quotes
Panda or anyone else got a site for live S&P 500 quotes???

Stalder Wife
(Fri Aug 22 1997 08:47)
Globex site.

(Fri Aug 22 1997 08:47)
US Long Bond not doing too well this morning.

(Fri Aug 22 1997 08:49)
Silverbum and

I gave these to you earlier in week, bookmark 'em Aussie!

Let's go currencies ( for. ) ! buy S&P puts...whoa Friday...Puetz, I hope you sold some calls, or bought puts

(Fri Aug 22 1997 08:50)
@Stalder Wife
Many thanks to the better half.

(Fri Aug 22 1997 08:50)
Silverbum ( @S&P 500 quotes ) : REF: Panda or anyone else got a site for live S&P 500 quotes??? Try:

(Fri Aug 22 1997 08:53)
Silverbum -- $spx at will get you the S&P 500 cash index quote. Indexes are real time. Globex on the net is delayed. I'm getting fifty basis uptick in Prem now. Wonder when the 'Big Boyz' start buying stock index futures????

Gold up $1.35 on EBN

(Fri Aug 22 1997 08:54)
Sheller & RJ/DJ/Disney...
Today would be a nice day for a PL run...looking bright as shiny white so far...we shall see...back to bed...

Shell, as usual, nice call for PL on that retracement's time for shoulder rides again?? me the money

(Fri Aug 22 1997 08:54)
S&P quotes
Thanx EB & vronsky. My quotes runneth over!

(Fri Aug 22 1997 08:56)
Life is tough when no one wants to accept your exported inflation anymore. :- ) Looks like a rough open.

(Fri Aug 22 1997 08:58)
REF: bw ( Bonds and M3: ) : Would you pls give the net location for M3 Thx

(Fri Aug 22 1997 08:59)
@GOLD stocks
Even though the Gold stocks contained in the S&P-500 index are a small percentage of the index, the senior golds may take a hit. This should be interesting to watch. Buying and selling pressure. Who will win out?

(Fri Aug 22 1997 09:01)
S.Korea-huge conglomorate bankrupt?
Stocks fell yesterday, led by Haitai Group
companies, amid concern the company was nearing

Shares in Haitai Group, one of the country's top 40
conglomerates, tumbled by the daily limit of 8 per
cent even as the group denied the speculation.

"We sold Haitai stocks a few weeks ago because
of concern the group's finances are deteriorating," a
fund manager at Korea Investment Trust said.
"When there is bankruptcy speculation, you sell first
and ask questions later."

(Fri Aug 22 1997 09:02)
COLES MARKET INSIGHTS - When You're Right, You're RIGHT!
Internets Prophetic Resident Economist, George S. Cole, shares insightful & incisive views on all markets. Hes bullish GOLD & bearish common-stocks - Sees severe bear market in equities:

(Fri Aug 22 1997 09:05)
Thailand- Reserves dwindle
Thai stocks fell yesterday after the Bank of
Thailand said net foreign reserves plunged to as low
as US$6.6 billion from about $40 billion in October
last year.

The amount of net reserves raised "a considerable
concern about Thailand's potential to turn around
from the bottom", one analyst said.

(Fri Aug 22 1997 09:11)
@gold stocks in the S&P-500
Here are the tickers for the mining stocks in the S&P500;


(Fri Aug 22 1997 09:14)
Long Bond at 6.646%
PREM at -1230

Looks like chip stocks to open lower. This means the tech sector is going to take a hit at the open. This has been the engine driving this stock market, if these stocks go lower...

(Fri Aug 22 1997 09:18)
REF: Date: Thu Aug 21 1997 21:59 Donald ( @Home ) : ( Vronsky: That URL might be too long?? ) -- many thx

George Cole
(Fri Aug 22 1997 09:22)
gold action
TW: I cannot predict the daily movements in gold, much less the hourly fluctuations. But I'm sure the western CBs and their allies will be doing all they can to keep the yellow down. Gold will break out when investor demand increases enough to swamp these efforts. We must expect the anti-gold forces to persist until the bitter end.

On a brighter note, the gold breakout will be much more violent than it would have been without these massive suppression efforts and the resultant huge short position. Once the yellow's downtrend is decisively broken, $400 should be taken out within a few months and $500 approached within 6-12 months.

(Fri Aug 22 1997 09:22)
PANDA: It could be that the local gold dealers in many currency problem countries do not want to sell. Could they have decided to sit on their inventory? They see local problems firsthand and may have decided it will be worth more as the local economy unravels.

(Fri Aug 22 1997 09:23)
Dont Delay EURO, but... (August 22, 1997)
Tlaga has a somewhat extreme view of the Federal Reserve monetary system and the EURO. You may NOT agree, but his depth of research is admirable:

(Fri Aug 22 1997 09:32)
Donald -- Quit probably...

(Fri Aug 22 1997 09:35)
It sounds that the loan approved by the IMF, has a clause, which vetoes said loan if "Si la inflacin recalienta la economa no podrn
usar los fondos del BHN. Rodrguez pide IVA para

(Fri Aug 22 1997 09:36)
NDX getting pummeled. BBL.....

George Cole
(Fri Aug 22 1997 09:39)
Merrill cut Intel this morning. But I'll bet Merrill stock goes down more than Intel before this nascent bear is over.

(Fri Aug 22 1997 09:40)
Toronto Stock Exchange down 80 ( six minutes ) gold mining stocks hold!

(Fri Aug 22 1997 09:55)
@ The Titanic
Looks like we're havin a slight downdraft at the opening in the Dow...Gotta play Rome only down 94....go "dipsters" go....XAU up .88

George Bernard Shaw
(Fri Aug 22 1997 09:55)
If you must choose between placing your trust in government or placing your trust in gold, then gentlemen, I strongly advise you to place your trust in gold.:

(Fri Aug 22 1997 10:01)
Strad - Did you follow my S+P comment last night? It would have been a perfect trade to institute on the close on Wednesday the way things are going Thurs.-Friday! BTW - When are you in Toronto next. Perhaps I'll splurge and take the wife!

(Fri Aug 22 1997 10:02)
Brazil down 2%, Mexico down 1%

(Fri Aug 22 1997 10:07)
@just a thought...


(Fri Aug 22 1997 10:13)
How's your portuguese? CB Gustavo Franco...high deficit? high currency reserves?

George Cole
(Fri Aug 22 1997 10:14)
Dow/XAU ratio
After a savage 18 month bear market, the gold shares have never been in stronger hands. By contrast, most stocks have never been in weaker hands. The relative action of the gold shares and the overall stock market will reverse over the next 12-18 months. The Dow/XAU ratio -- currently around 80 -- probably will fall to 25-30.

(Fri Aug 22 1997 10:17)
NOMERCY: It seems that the IMF has included a contingency clause in the terms of the loan to Argentina. They get part of the money now but it can only be used for specific items permitted by the IMF. Then, if the inflation and defecit numbers meet certain future standards set by the IMF, they get the rest. ( As always, you are warned about my lack of expertise in translating Spanish. Its been 50 years this September since I took Spanish in high school! )

(Fri Aug 22 1997 10:20)
NOMERCY: I can't get the Oglobo URL to work.

(Fri Aug 22 1997 10:26)
Former Central Bank president warns of fragility of foreign exchange mechanisms

SO PAULO, 08/22/97 - The futures market projected a devaluation of the Real by 0.77% in
August and 0.74% in September, but futures trading indicates a monthly devaluation of 0.84% for
both November and December. This increase in dollar futures negotiated on the BM&F
commodities and futures market, was attributed to the warning made by the president of the BBA
Banco, Ferno Bracher, regarding the fragility of the current mechanism of financing foreign
accounts and the risks in maintaining a deficit in current accounts over the long term. His point of
view has been aired by others before, but it assumed a special importance because Bracher is a
former president of the Central Bank. ( Gazeta Mercantil ) ( SB )

(Fri Aug 22 1997 10:27)
George S. Cole: I have been reading your "gold is going up and stocks are going down" theme here and elsewhere for almost a year I believe -- and I think you are getting close to becoming a prophet

(Fri Aug 22 1997 10:31)
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:

(Fri Aug 22 1997 10:36)

To the Goldbugs..

I understand that most goldbugs would love to see the overall market correct,
in hopes that this will stimulate the depressed ( understatement ) gold market.
Technically the Dow could correct to the 7500 area and the S&P 880 before
"any" damage is done.. Don't count your chickens...

(Fri Aug 22 1997 10:38)
Donald- Brazil
Tnx for the translation. I tried the URL and it was ok unless it was in my cache...anywhom here's a link to World newspapers, which O'globo is included
and here's the O'globo story
Franco: os juros altos so culpa do dficit pblico

BRASLIA. O presidente do Banco Central, Gustavo Franco, atribuiu ao dficit nas contas
pblicas a culpa pelas altas taxas de juros cobradas no pas. Em debate na Comisso de
Economia da Cmara, ontem, Franco disse que, enquanto o pas precisar captar no
mercado R$ 45 bilhes por ano para pagar os juros da dvida interna, no ser possvel
reduzir os juros para os patamares dos pases desenvolvidos. Em momento algum, Franco
admitiu que os juros se mantm altos tambm em funo do rombo nas contas externas
provocado pela poltica cambial pilotada pelo BC.

- Os juros altos so resultado das contas pblicas em desordem. O Governo tem que
buscar R$ 45 bilhes no mercado para pagar juros, afora a rolagem da dvida. Por isso,
precisa manter os juros atrativos. O juro cair, mas s quando houver melhoria da situao
fiscal - alegou Franco.

O argumento de Franco esconde uma realidade que os prprios diretores do BC, como
Francisco Lopes, e at o presidente Fernando Henrique Cardoso j admitem: diante da
queda da inflao, o banco s no reduz as taxas de juros em funo da crescente
necessidade de atrair dlares para o pas. E para manter a atratividade das aplicaes no
pas,  preciso manter os juros altos.

A preocupao com as contas externas foi exatamente o que levou o Banco Central a
manter inalterada, pelo sexto ms consecutivo, a taxa de juros bsica da economia. Numa
repetio do que vem ocorrendo desde abril, a Taxa Bsica do Banco Central ( TBC ) de
setembro ficar em 1,58%. Com isso, o Governo mantm a rentabilidade lquida dos
investidores internacionais na faixa de 8% a 8,5% ao ano.

Aos que acusam o Governo de acumular um nvel excessivamente elevado de reservas
internacionais, Franco argumentou que os mais de US$ 60 bilhes acumulados em ouro e
dlar so um seguro contra crises cambiais. Para o presidente do BC, o Brasil paga hoje
entre US$ 1 bi e US$ 1,5 bilho por ano para ter reservas.

- Ter reservas  como comprar um seguro. Estou satisfeito em pagar este seguro para
termos tranqilidade - disse.

Franco defendeu o fim do limite de juros reais de 12% ao ano imposto pela Constituio.
Para ele, a limitao deve ser substituda por um artigo assegurando ao BC o papel de
guardio da estabilidade da moeda.

Durante o debate, Franco e o deputado Roberto Campos ( PPB-RJ ) discordaram quanto ao
tratamento a ser dado pelo Governo  lavagem de dinheiro.

- Depois de tantos anos de Governo, o senhor desenvolveu um travo policialesco, ao dar
grande importncia  lavagem de dinheiro - provocou Campos.

Para o deputado, num pas onde no existe liberdade de movimentao de moeda
estrangeira, seria absurdo o Governo criar mais um instrumento burocrtico para dificultar a
vida das pessoas. Segundo o deputado, quem quer mandar dinheiro para fora do pas tem
que se submeter s "humilhaes burocrticas" impostas pelo BC. Para ele, s existe o
doleiro porque a moeda brasileira no  confivel. Quando houver confiabilidade na moeda, o
doleiro deixar de existir.

Com elegncia, Franco garantiu que no Brasil o cidado comum pode mandar ou trazer
qualquer valor do exterior, desde que se identifique. Franco voltou a atacar os doleiros,
considerados como os responsveis pela lavagem de dinheiro.

Apesar de defender punio rgida para os doleiros, Franco no pensa em mudanas nas
chamadas contas CC-5, as contas de pessoas fsicas e empresas que no residem no
pas, pelas quais os dlares obtidos de forma legal ou ilegal entram e saem do pas.

 tarde, Franco foi ao Senado trabalhar pela aprovao dos nomes de Sergio Darcy e
Demsthenes Madureira Pinho Neto para a diretoria de Normas e de Assuntos
Internacionais do BC, respectivamente. Primeiro, a conversa foi com o presidente do
Senado, Antnio Carlos Magalhes. Depois, Franco foi ao encontro do presidente da
Comisso de Assuntos Econmicos, Jos Serra, com quem tem srias divergncias.


(Fri Aug 22 1997 10:42)
@dumbing down
Could someone explain this article, please. What are *RPs*?

NEW YORK, Aug 22 ( Reuter ) - The Federal Reserve was expected to remain out of the open market on Friday, as
operations this week were said enough to cover the Fed's weekend add need.

Some, though, said there was a chance the Fed could come in with a round of over-the-weekend system RPs.

On Thursday, the Fed executed four-day fixed system RPs, totalling $6.9 billion, which remain in place.

Federal funds were soft, providing another reason for the Fed to pass up open market intervention.

In early trading, funds were at 5-7/16 percent, below the 5-1/2 percent target rate.

Meanwhile, as the Fed's add need continues to grow heading into the Labor Day weekend next week, analysts said an outright
purchase of bills -- a bill pass -- could occur at any time.

Bernard Baruch, a 1929 and aftermath winner
(Fri Aug 22 1997 10:43)
Gold has worked down from Alexanders time... When something holds good for two thousand years, I do not believe it can be so because of prejudice or mistaken theory.:

(Fri Aug 22 1997 10:45)

(Fri Aug 22 1997 10:46)
Re: vronsky, M3
vronsky: I got my M3 figure from Marty Zweig over the phone. Barrons should have it on the net I would think.

(Fri Aug 22 1997 10:47)
Do any of you follow the markets closely? Do you see that the volume in golds on the up side is low? The near term pattern on the XAU calls for a correction, maybe as low as the gap up. Unless there is a decisive break through 104 on XAU, I see this filling of the gap as a distinct possiblity.

Are you watching what's cooking in the silver pits? Up over ten and moving. Anyone know why?

(Fri Aug 22 1997 10:50)
Lurker,could it be RePurchases of???? Thats a guess thats probably not right.

(Fri Aug 22 1997 10:54)
Lurker -- I believe that 'RP' means Repos or Repurchase agreements. Essentially what they are doing ( and have been doing for some time now ) is monetizing the debt.

(Fri Aug 22 1997 10:58)
lurker -- Post the URL for that story.

(Fri Aug 22 1997 10:58)
Major Markets index
...sea of red ink

(Fri Aug 22 1997 11:00)
Steve Puetz:
I learned a lot from reading your book and recommend it to all whom I come in contact with. Regarding the S&P puts, I was just quoted approx $14,000 price tag to get in. Gold/silver calls in the $100-$200 range. I can afford the calls - but how does a small investor ( and new to options ) like me get into S&P's????? Am I missing something? HELP! ANYBODY! I want to get into the market very soon, but can't justify $14,000.

(Fri Aug 22 1997 11:04)
In the height of summer them bares come out of the woods.

Casual - To a Degree - in Markets
It's a hot Friday and ``dress-down'' day -- but some banks in
London worry that high temperatures might prompt traders to bare
it all -- well, almost. Traders have been looking forward to
today's ``dress-down'' day with temperatures hitting 90 degrees
in London this week. But some worry that standards could slip. A
bank in London advised employees to dress casually but smart
today -- despite the hot weather. The bank forbids tank tops,
ripped jeans or shorts and sandals.

(Fri Aug 22 1997 11:05)
we surrender
Thai finance minister buys white Lacoste jackets for budget committee:

BANGKOK, Aug 22 ( AFP ) - Thailand's finance minister has
purchased white Lacoste windbreakers for the 57 members of a
parliamentary committee who are due to vet his budget, a newspaper
said here Friday.
The move comes two days after Thailand agreed to adhere to
strict austerity measures in line with a 16.7 billion dollar loan
brokered by the International Monetary Fund to resurrect its
devastated economy.
Thanong Bidaya gave each committee member a white Lacoste
windbreaker jacket, worth 1,950 baht ( 61 dollars ) , The Nation daily
said. The total cost was 111,150 baht ( 3,474 dollars ) .
"The government is calling on the public to tighten their belts
but fails to practice the policy itself," opposition MP Sathit
Wongnongtoei told the paper.
One of the minister's aides said the gifts were given with no
conditions attached and were accepted by all the politicians, the
paper said.
Noppadol Pattama, one of the 57 committee members, said the
presents were a token of Thanong's appreciation for the hard work of
scrutinising government spending.
The Thai cabinet Tuesday agreed to 59 billion baht ( 1.86 billion
dollars ) in tough budget cuts for the fiscal year to September 1998.
It approved heavy cuts in investment, transport and communications,
and defence. Health and education escaped with only slightly lighter
The budget goes before the committee for approval before a full
parliamentary debate.

(Fri Aug 22 1997 11:05)
Reify -- silver is like that! :- ) )

Lar -- To trade options, most brokers will require some minimum income level and net worth. The want to make sure that you can afford to lose the money! Some brokers require a $25,000 minimum in your account before they will let you trade options. The requirements get even higher if you want write options or ( ! ) do naked options. The gains and losses can be swift. It is a high risk, high reward, big lose, zero sum game.

(Fri Aug 22 1997 11:05)
@More Teamster sleez
Due to improper campaign activity in the last Teamster election,Carey will have to run against James Hoffa Jr. surprising!...XAU now falling and only up .20....Off ta see some museums.....

(Fri Aug 22 1997 11:05)
@getting smarter
Panda: Thanks for explaining. The URL is:

(Fri Aug 22 1997 11:07)
Time to hand over the loot
Thailand to roll over 10 billion dollars in pledges: analysts

BANGKOK, Aug 22 ( AFP ) - Thailand is expected roll over 10
billion dollars worth of forward currency commitments incurred
propping up the baht in the face of heavy speculation, analysts said
Thailand built up forward positions worth 23.4 billion dollars
in its failed defense of the baht, the central bank's governor said
Thursday. The pledges will be unwound over the next 12 months.
Thai foreign reserves stood at 30 billion dollars at end of July
-- but when the forwards commitments are taken into account the
underlying reserves were just 6.6 billion dollars.

(Fri Aug 22 1997 11:08)
lurker -- I went to the URL and got this;

Yahoo - Document Expired

The requested document '/finance/97/08/z0000_z00_6.html' is no longer available.

(Fri Aug 22 1997 11:11)
lurker -- I did find this story though....

Same thing, more or less...


(Fri Aug 22 1997 11:11)
@smarter but dyslexic!
Panda: Sorry, let me try again.

(Fri Aug 22 1997 11:18)
I now agree with GSC! you may do as you wish!

(Fri Aug 22 1997 11:21)
lurker -- Abstract from a long definition;

The Federal Reserve Bank also makes extensive use of repurchase agreements in its OPEN MARKET OPERATIONS as a method of fine tuning the money supply. To temporarily expand the supply, the FED arranges to buy securities from nonbank dealers who in turn deposit the proceeds in their commercial bank accounts thereby adding to reserves. Timed to coincide with whatever length of time the FED needs to make the desired adjustment, usually 1 to 15 days, the dealer repurchases the securities. Such transactions are made at the Federal Reserve Discount Rate and accounts are credited in FEDERAL FUNDS. When it wishes to reduce the money supply temporarily, the FED reverses the process.

(Fri Aug 22 1997 11:37)
Mexico- gov't assuming 'privately run'debt
Mexico to Unveil US$3.4 Bln Toll-Road Restructuring Program

Mexico's Communications and Transportation Ministry plans to unveil a 26.1 billion peso ( US$3.36 billion ) plan to restructure
the debt of the nation's privately run toll roads today, people familiar with the negotiations said. The plan has been in the works
for two years as the government, the road concessionaires and their creditors negotiated to reduce the roads' financial burdens.
The ministry has scheduled a press conference in Mexico City for 3 p.m. U.S. Eastern time. Under the terms of the program,
the government would assume responsibility for most of the bank loans and the debts the toll roads operators owe to suppliers
and contractors, the people said.

(Fri Aug 22 1997 11:39)
Panda & Lurker:

When the Fed engages in RP's aka repos and Repurchase Agreements, they are buying government securities ( T-bills, notes, bonds etc ) from dealers with an agreement to resell them back to the dealers at a specified price at some time in the future usually a few days. By purchasing securities in the open market the Fed effectively writes a check on its own account. When this check is cashed it increases the balance in the reserve account of the bank that presented the check. This has the effect of boosting the amount of reserves in the banking system. When the securities are repurchased by the dealer a few days later the reserves are drained. These types of operations are meant to fine tune the bumps in the reserve pool that are due to 'technical' fluctuations. These may be associated with events such as tax periods, or the Christmas shopping season. These events have an effect upon the amount of cash floating around and thus influence the vault cash at banks which is counted as part of their reserves. When the Fed wishes to add reserves to the system on a permanent basis they simply buy the securities outright with no repurchase agreement. All these operations can be done in reverse to drain reserves from the system.

The Fed has a web site which has a more detailed explanation of all this. I can't remember the URL but when I find it I will post it. I think that you need acrobat to read the stuff.

(Fri Aug 22 1997 11:41)
Merrill Lynch was bearish on gold from $35 to $850 - turned bullish at all-time high of $850 in 1980! As usual Dines provides well-written insights on Gold & Silver:

(Fri Aug 22 1997 11:43)

(Fri Aug 22 1997 11:46)
1987???What happened to Canadian Mining Stocks
To All who can remember. How did the Canadian Junior,Major Mining,
Exploration and Resource companies hold up during the market crashes
in 1987??

(Fri Aug 22 1997 11:54)
Wondering!?!Date: Thu Aug 21 1997 11:12

Please can you post the URL, I will appreciate a lot !

(Fri Aug 22 1997 11:57)
In light of SILVERs price rise, its relevant to read Silver Stocks, there aint too many. Reviews Pan Am Silver, Silver Standard, Intl Avino, United Kino & Sunshine, others:

(Fri Aug 22 1997 12:00)
Zero sum games:
ALL markets are zero sum games. Some markets take a few months or years to make the round trip, some take longer.

(Fri Aug 22 1997 12:12)
Where are the 'President's cojones?
American officials have long been concerned that Russian scientists
would sell their specialized knowledge to Iraq and Iran, and have
tried to develop cooperative programs to keep such scientists at
work, with salaries.

The fact of assistance by Russian scientists to Iran's missile program
has been reported before, but the American officials are only now
disclosing how persistently, and unsuccessfully, the U.S. government
has tried to get Russia to stop it.

Bart Kitner (Kitco)
(Fri Aug 22 1997 12:16)
To All - It's Good News/Bad News time:

Bad News first:
a ) No date on a squelch button yet available.
b ) The search function continues to elude us.
c ) You'll no longer be able to view a whole day at a time in full text mode.
c ) The price of gold seems to have come off its highs of $875 set a few years ago.

Good News now:
a ) Performance on this site should be improved.
b ) Our system will remember the last viewing options you selected and default to them each time you access.
c ) It'll also display only the comments that have been added since your last visit.
d ) The price of gold has consistently remained above the artificial price fix of $35.00/oz. that was removed in the 70's.

These changes will be made in a half-hour from now. If you start to have difficulties accessing the site, send an email including your operating system, browser and version and details of the problem.

Now the Really Good News:

Hand free, minute by minute price updates for all the metals coming soon. Available for willing beta testers on Monday.

(Fri Aug 22 1997 12:21)
BART: Did you leave out one piece of good news? The price of service remains the same?

(Fri Aug 22 1997 12:22)

To all. I just found this and must share it with you.

"Ever y inteligent man knows inflation is near. In fact thee are today 275 Billions in Bonds, Mortgages and Bank Deposits in the U.S.A. and there is only 22 Bilions in gold and silver to pay all this. The United States has appropriated about 20 Billins this session of Congress and that means more bonds. England last week repudiated 3/4 of all her paper money because she had no gold. Every nation on earth is go "Inflation".

After all is said and done a worthy Gold mine will be the best investment in the world."

This is taken from a letter written September 13, 1940! The guy was just slightly ahead of his time but I could not agree with him more.

(Fri Aug 22 1997 12:29)

(Fri Aug 22 1997 12:31)
@learning a lot here
DA: Appreciate your help.
All: Does anyone know a good site for *free* quotes on Feb & March Gold and Silver Options? Thanks in advance.

(Fri Aug 22 1997 12:34)

Oh, Bart, one more thing...I set the viewing button for December 31, 1997, and I STILL can't get it to show the gold price for that date! BTW, this site RULES!!

(Fri Aug 22 1997 12:52)
as requested

Comex gold warehouse stocks fell by 16,498 oz to 875,210 oz. BUT MOST IMPORTANT, eligible gold stocks now stand at 216,944 oz, a drop of 100,000 oz in the last month or so. Comex Open Interest is 195,887 contracts. This means there is 1.1 oounces of physical gold pledged to cover each 100 oz contract. One of these days, somethings got to give!

(Fri Aug 22 1997 12:56)
@ Live Indicies Charts :
The following URL takes you to a site which allows access to live indicies charts and delay charts for the mentals. Various times periods are an option ( i.e.- 5, 10,30, daily,weekly,monthly ) Looks like you need java to operate. The symbol for Oct Gold is gcv7 For Dec Gold it is gcz7.
XAU is $xau.x and the HUI ( American Gold Bugs index ) is $hui.x. Try it out.

Spud Master
(Fri Aug 22 1997 12:59)
(from my own private Idaho)
Arden - thanks for the AU warehouse postings. 1.1 oz gold to back up each 100 oz.s? If this were coffee or OJ, it'd be a hard slam & the fragrance of sizzling shorts. What's keeping the lid on?

(Fri Aug 22 1997 13:06)
:- ) :- ) :- )

(Fri Aug 22 1997 13:08)
@Where are the dip pi dipsters
Why nobody is talking on Dow down 150,...GOLD up $3.30?

Holding your breath?

(Fri Aug 22 1997 13:08)
It looks like the paper boat has sprung a big leak and the paper rats are jumping overboard while gold and silver, like the floating axe in the Old Testament, are moving on upstream. Very nice way to end a week in such a fashion. George S. Cole you have seen it in vision. The vision is rapily becoming reality.

Bart Kitner
(Fri Aug 22 1997 13:11)
TO DONALD : Now that you mention it....effective immediately there will be a price increase of 500%.

( On the service, not the metals )

Who Cares
(Fri Aug 22 1997 13:12)
DOW Down

It's not important that the DOW is down. Cole is right. It will
be a failure to set a new high within the next 5-6 weeks that
will finally sink the boat.

Gold will rise modestly. At some point, defaults will begin
to cascade, perhaps 1-2 years from now, and then gold should
skyrocket for a brief period.

My intuitive guess.

bb fisher
(Fri Aug 22 1997 13:13)
if the sell off in the general markets hold thru end of day this will be the 3rd big sell off to end a week in a row. must be a record. one of these times there WILL be a follow thru on the monday upcoming.

is it time to buckle up?

(Fri Aug 22 1997 13:14)
See what I meant about the fear!!! Watch and learn.

(Fri Aug 22 1997 13:14)
@The Wonder Of It All:
Wow: Everything is changing right before my eyes. Bart's Kitco, The Stockmarket, The Precious Metals,etc... when and where will it all end.??? : )

(Fri Aug 22 1997 13:16)
Possible end @ Bull Run
Volatility hits the markets - again

TORONTO ( CP ) - Traders on Bay Street and Wall Street took the stock markets on another wild ride this morning as the Dow Jones industrial average plunged 114 points and the TSE 300 index dropped 78 points in early trading.

Stock analyst Katherine Beattie suggested the markets "could be forming a top," referring to the possibility that the markets' phenomenal bull run might finally be running out of steam.

irving berlin
(Fri Aug 22 1997 13:18)
"Blue Skies" was the most popular song in 1929 - all across the land, but especially in Wall Street.

Blue skies smilin' at me-
Nothin' but blue skies do I see-
Bluebirds singin' a song-
Nothin' but bluebirds all day long

(Fri Aug 22 1997 13:18)
Week's channel action
An interesting week, in looking at the channel chart.

Gold relentlessly staying just inside the upper channel boundary.

Platinum, moving down relative to gold, now at the bottom of the channel looking like it is prepared for another run up.

Palladium lost somewhere in the middle.

Silver looking suspiciously like it is going to break out through the top! The rally today happened mostly after the London market closed, so if it holds at the current level or above through Monday morning, it will look like a real break out.

(Fri Aug 22 1997 13:22)

Panda--Wow is right! Check out the XAU. Off to work, back in about 12 hours.

(Fri Aug 22 1997 13:25)
in sack-o-tomatoes
Another lovely Friday for goldbugs. How do you suppose those Wall St Bulls feel grazing on the slopes of a rumbling Vesuvius? Would someone kindly tell the gods of the mountain that I'd like my prime rib medium rare?

"Bernard Baruch"
(Fri Aug 22 1997 13:25)
IS 1929 BEING REPLAYED THIS YEAR? - by Guest Guru Ure
There is an uncanny similarity between the DOW from January 1920 to April 1930 AND TODAYS DOW track record. Avoid reading this study at your own peril - GUEST GURU URE:

(Fri Aug 22 1997 13:31)
Re the question on whether US mint demand would result in market purchase of Platinum for new bullion coins, the mint has been given access to the US DOD strategic stockpile, to the tune of at least 250,000 ounces. Beyond that, who knows? BTW, WHY are equities taking such a beating this week on all good news???

(Fri Aug 22 1997 13:32)
Speculators = ( central banks, maybe??) @ Canadian Dollar
Friday, August 22, 1997
Speculators put pressure on C$

Ottawa Bureau Chief The Financial Post
Currency speculators are bidding down the value of the C$ in a test of the Bank of Canada's policy on interest rates, economists say.

Yesterday, the C$ was under concerted attack, falling as low as US71.64. It has been four months since the C$ traded at such low levels. The C$ closed at US71.65, compared with Wednesday's close of US71.86.

Market analysts say the low level of the C$ may prompt the Bank of Canada to take action to shore up support for the currency by raising interest rates.

(Fri Aug 22 1997 13:51)
@ :-)
Auric -- :- )

(Fri Aug 22 1997 13:52)
Pegasus gold to cut work force by nine percent.

George Cole
(Fri Aug 22 1997 13:57)
Gold stock action
HUI substantially outperforming XAU today. ABX and PDG sluggish on modest volume. But HM moving up strongly on heavy volume.

To confirm a breakout we need to see spot gold move over $330 and stay there. Several strong up days in a row for XAU, HUI, TSE, and Joberg on heavy volume would be another signal that a fundamental change in market direction is underway.

Getting close but no cigar YET.

(Fri Aug 22 1997 14:06)
Mexico down 1.81%, Brazil down 1.67%

(Fri Aug 22 1997 14:23)
STEVE......Someone else may have already answered your question..I am not up to snuff on Bart's new format....PLUMB in gold refers to karat gold that is exact to 3 decimal places.....For instance 14k plumb is exactly .585% gold content ......10k is exactly .319% gold content....Years ago 14k could be as low as .555% and still be stamped 14k....Enough ?????

(Fri Aug 22 1997 14:33)
@DFW Airport
Anyone what's going on here ??? The paper markets are tanking and XAU goes up over 1 point and immediately drops back under 1 point.Is someone rigging this? I frankly don't understand. Can anyone offer some kind of explanation?

(Fri Aug 22 1997 14:36)
@Headline news
Dow Jones wire; "Happy tenth anniversary of 1987 high." :- ) )

(Fri Aug 22 1997 14:41)
Actually the headline said,
"DJ 14:33 N.Y. stocks outlook: Happy tenth anniversary of 1987 high"

:- ) ) ( Sick sense of humor! )

(Fri Aug 22 1997 14:41)
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:

(Fri Aug 22 1997 14:43)
Smell the fear
"Fear psychosis" has gripped Indian banks: chamber of commerce

NEW DELHI, Aug 22 ( AFP ) - A leading chamber of commerce on
Friday said a "fear psychosis" in India's banking sector has put a
squeeze on credit.
The Associated Chambers of Commerce and Industry of India
( ASSOCHAM ) said most banks were fighting shy of giving loans because
of fears of harassement by state agencies.
"Although the banking sector is at present flushed with funds,
there has been a slow-down in giving credit to industry because of
certain impediments.
"Bank officials have become extra cautious in lending to the
corporates as they fear that their lending judgement may be
questioned and that they may be faced with enquiries, investigations
and harassment," ASSOCHAM said.
"Another reason of the fear psychosis is the apprehension of
accumulation of bad loans leading to an increase in non-performing
assets," the business body added.
ASSOCHAM's warning came two days after an Indian court ordered
the arrest of the chairman of a state-owned bank for handing out 3.6
million dollars to a Singapore-based shipping corporation seven
years ago.
The nationalised bank's former chairman was arrested last year
on charges of extending similar loans.
Several other bankers have faced credit-related charges in the
past six years, prompting the sector to adopt rigid rules and
regulations on the grant of loans.

(Fri Aug 22 1997 14:47)
@XAU Question
PDG - Placer Dome - Appears to be taking a small hit today. This probably due to S&P Index related selling. Just a guess on my part.

pdg 17 9/16 down 3/16 at 14:42 ( real )

(Fri Aug 22 1997 14:50)
Uris -- Scroll back to this morning around 9 to 11. I posted the mining stocks that are in the S&P-500 index. Cross check them with the XAU and I'm sure you will see stocks that are in both indexes.

(Fri Aug 22 1997 14:56)
PREM just shot up, they're going to try and push this sick puppy up! Perhaps the rescue team has arrived? Yes, buying stock index futures to move the market... What a con-cept. ;- )

Yellow Jacket
(Fri Aug 22 1997 14:59)
I think it's better!
BART: I think the changes make a lot of sense. Much faster reloads. Keep up the upgrades.

(Fri Aug 22 1997 15:00)
U.S. Bond market is poised for a real tumble; interest rates will sky-rocket.
The snarling bear is about to tackle the "Dow/S&P".
Foreign currencies, which I've been recommending here, for the last month+; now begin their "lift-off", as the U.S. dollar heads for a free-fall; and the international currency markets in turmoil, lead us toward protectionism & 'trade-wars', and a nasty, prolonged "economic winter".
The "death of the U.S. dollar" as the world's reserve currency, will not happen "over-nite"....but it is beginning now. And before it is over,
most U.S. commodities/futures, including gold & silver, will "enjoy"
remarkable, sustained, bull markets ....with "El-Nino~" adding the
"icing on the cake" ..... "let them eat cake!" ....who said THAT ?!
The accumulation of mining shares, ( -as I've recommended here, in addition to the foreign currencies, in several recent posts ) ,
by "strong/smart/big" money, continues unabated. Gold & silver, and mining shares, will experience accelerateing upward momentum, in the weeks & months just ahead.

"Hold - on; it's going to be quite a ride."
( ...and don't eat too much "cake". )

(Fri Aug 22 1997 15:00)
Bernard Baruch: Where have you been my hero? Gold up 3.10, silver up .17 - What's going on here???? Dow in trouble????

(Fri Aug 22 1997 15:05)
Immigration by Pope @ Criminals into Canada
Friday, August 22, 1997
Gypsys to be screened
Toronto Sun

The document states about 47% of all adult Gypsy claimants entering Canada have criminal convictions. Immigration officers have been told Gypsy claimants should not be processed in a separate refugee stream.

The document conceded Ottawa could "take heat" from the news media and non-governmental organizations because a particular group has been singled out for special attention.

Friday, August 22, 1997
Pope challenges West's immigration cutbacks

PARIS ( AP ) - Pope John Paul II today criticized efforts by Western nations to cut back on immigration, declaring that the world's needy deserve assistance whatever their nationality.
In a packed Notre Dame Cathedral, John Paul used the occasion of a beatification of a lay charity worker to challenge developed nations to rethink their attitudes toward immigration.

"Who is my neighbor? The neighbor is every human being without exception. It is not necessary to ask his nationality, or to which social or religious group he belongs," John Paul said. "If he is in need, he must be helped."

Yellow Jacket
(Fri Aug 22 1997 15:06)
South African Market Update - 8/22/97
GO DURBAN DEEP!! Here's the after-market update.
Share prices in a tailspin
A dip in international markets, prompted by a
reversal on the Dow last night and dollar
weakness today, sent share prices into a tailspin.
Dealers fearing a repeat of last week's sell-off
dumped shares to remain square before the
week- end.

A fall in the Dow as we opened exacerbated the
position, prompting talk of a major collapse. The
chartists all along have claimed that the correction
which commenced a fortnight ago still had work
to do before the bull trend could resume.

Bear in mind that to threaten the long-term trend
the Dow has to fall below 7000, a wide margin
from current levels. The bond traders were more
intuitive than equity dealers. The R150's eased
from the opening touching a low of 14.285%
before recovering to 14.24%, a loss of 6 points.

The bond market remains edgy with major
support at 14.30% likely to be tested soon. Fear
on the equity market took the focus off the rand,
which provided the only highlight. Against the
softer dollar the rand moved below 4.70 to close
4.68, a major gain on the day.

Golds and Mining:

The gold price move $1 higher to $324, but the
good performance of the rand kept gold shares
form advancing. Vaals managed a reasonable rise
of 200 to 23900 but the rest of the gold market
closed mixed, other than marginal Durban Deep
which surprised everyone rising 140 to 1200.

Mining houses were sold down on small volumes
wiping billions off their market cap. De Beers lost
525 to 14700, Anglos 875 to 24075, Johnnies
140 to 3100 and Minorco 125 to 9825. Like
gold, a firmer platinum price was offset by the
strength of the rand, Palamin shed 150 to 8300,
Samancor 370 to 3500 but Amcoal bucked the
trend, managing a modest 25 rise to 26625.

(Fri Aug 22 1997 15:13)
irving berlin @ Blue Skies and Market Blues ( 1929 & 1997 ) Most fascinating and one of my favorite songs. Too bad it has a sad ending - but with perseverence we shall survive! Great site Vronsky. Thank You! Ingotwetrust.

(Fri Aug 22 1997 15:34)
SILVER PRICING SOARING TODAY (+18 cents) -- Silver, the Fundamentals!
The fundamentals ARE VERY convincing for silver and the producers of the white metal. Here is an excerpt from Pan American Silver's 1996 annual report:

(Fri Aug 22 1997 15:36)
People who got away early on a FRIDAY, for either a 1 or 2 week vacation, will be back in town next Monday.

(Fri Aug 22 1997 15:40)
The SA golds are looking stronger than XAU today.

Sir John Templeton
(Fri Aug 22 1997 15:45)
Billionaire and founder of Templeton Funds
The cost of living in the entire world will increase by 10 times during the next 40 years. And therefore, I think gold is a good bet in the long run.

(Fri Aug 22 1997 15:59)
Teamsters ( 1/3 of 1.4 million voted @ Election - Again !
Friday, August 22, 1997
Teamsters' election set aside

WASHINGTON ( AP ) - A federal official threw out Teamsters President Ron Carey's re-election victory today and ordered new balloting after an eight-month investigation into alleged fund-raising abuses by his campaign.

The new election could take more than four months to complete, said Quindel, who submitted her decision to a federal court in New York today.
A federal grand jury in New York continues to investigate other alleged schemes, as well as the union's ties to the Democratic Party.

Another organization implicated in the probe is Citizen Action, a liberal consumer group that received $475,000 in 1996 from the Teamsters to promote voter education........

(Fri Aug 22 1997 16:05)
I've visited the site over the past few days. Great 'guru' articles and URLs. It's unfortunate that this pile has been built on sand. Many people will be hurt. Thanks for all your thoughts and insights.

My own misgivings were aroused during the Reagan years with the tax "cuts" and subsequent growth of deficits. It seemed so insane coming from the Republicans ( Dem-s more than willing to help all along. ) . We've been on quite a joy ride all these years. But its seems time to pay our dues.

If anyone is interested please read Isaiah 47. Replace 'Babylon' with Washington and 'Chaldea' with America. A chilling parallel. Consider verses 12 through 15. All the advisors, analysts and "seers" of a different sort today. Same fate?

(Fri Aug 22 1997 16:13)
@Frogs and such...
Well, I've heard the best way to cook a frog is to put one in a pan with cold water and then slowly turn up the heat. Psychological conditioning is going on here. "See, just hang on through those dips. The market will come back." Stock index futures and options, what amazing tools they are...

I want to see who will be buying gold next week. The imbecilic reasoning that because your currency is falling apart, you will not buy gold because it costs too much? Duh? Spin doctors, amazing. The only thing more amazing is the uncritical minds who believe them and their lack of ability in reasoning out the truth.

George Cole
(Fri Aug 22 1997 16:15)
last hour rally
Looks like the "plunge protection team" came in at the last hour to save the bulls for another weekend. Interestingly, gold stocks also picked up nicely. This suggests the bulls will be tested again shortly. Try as they will to hold back the tide, their days are numbered.

(Fri Aug 22 1997 16:17)
Gold, the true bottom line
New York comptroller presses Swiss firms to donate to Holocaust fund

NEW YORK, Aug 22 ( AFP ) - The New York City comptroller has asked
Swiss companies in which the city owns stock to contribute to a
humanitarian fund for Holocaust survivors, officials said here
Alan Hevesi, who manages the city's DOL70 billion pension fund,
sent a frank letter asking for the donations to 27 publicly traded
Swiss companies in which the city holds over 462 million dollars in
Hevesi's office said a number of the companies agreed to the
request, which made it clear a contribution to the humanitarian fund
would ensure the company avoided bad publicity in the future.
"We have found that a company's public image is one of its most
valuable assets," says the July 21 letter, which was made public
"Similarly, we have found that contingent liabilities -- such as
potential boycotts or even the expense of lobbying against such
boycotts -- are often undervalued.
"As investors in many Swiss companies, we do not want to see
their values diminished. Clearly, a mechanism such as the Special
Fund would be helpful in preventing such contingent liabilities from
becoming realized," the letter says.
Hevesi received only one negative response, from a company
created after World War II, according to Elan Steinberg of the World
Jewish Congress.
Hevesi, who is running for reelection to his post in November,
has also written to dozens of other state and municipal comptrollers
across the country asking them to take similar action in their own
The fund was created earlier this year by Swiss banks to defuse
the controversy generated by revelations that Swiss banks had
accepted Nazi-seized gold during World War II and continued to hold
the assets banked by Jews fleeing the Holocaust.
A first disbursement from the fund to indigent Holocaust
survivors in Eastern Europe is expected to take place next month.

(Fri Aug 22 1997 16:25)
Bill Gates dies in a car accident. He finds himself in purgatory, being sized up by St. Peter.

"Well, Bill, I'm really confused on this call; I'm not sure where to send you. After all, you helped society enormously by putting a computer in almost every home in America, yet you also created that ghastly Windows '95. I'm going to do something I've never done before. In your case; I'm going to let you decide whether you want to go to Heaven or Hell."

Bill replied, "Well, what's the difference between the two?"

St. Peter: "I'm willing to let you visit both places briefly, if it will help your decision."

Bill: "Fine, but where should I go first?"

St. Peter: "I'll leave that up to you."

"Okay then," said Bill, "Let's try Hell first."

So Bill went to Hell. It was a beautiful, clean, sandy beach with clear waters and lots of bikini-clad women running around, playing in the water, laughing, and frolicking about. The sun was shining; the temperature was perfect. Bill was very pleased.

"This is great!" he told St. Peter. "If this is hell, I REALLY want to see heaven!"

"Fine," said St. Peter, and off they went.

Heaven was a place high in the clouds, with angels drifting about, playing harps and singing. It was nice, but not as enticing as Hell. Bill thought for a minute, and rendered his decision. "Hmmm. I think I'd prefer Hell," he told St. Peter.

"Fine," retorted St. Peter, "as you desire." So Bill Gates went to Hell.

Two weeks later, St. Peter decided to check on the late billionaire to see how he was doing in Hell. When he got there, he found Bill, shackled to a wall, screaming amongst hot flames in dark caves, being burned and tortured by demons. "How's everything going?" he asked Bill.

Bill responded, with his voice filled with anguish and disappointment, "This is awful! This is nothing like the Hell I visited two weeks ago! I can't believe this is happening! What happened to that other place, with the beautiful beaches, the scantily-clad women playing in the water?"

"That was a demo," replied St. Peter.

(Fri Aug 22 1997 16:27)
Truth @ it is absolutely & totally false!(Gold=Cod re:truth) ?
Friday, August 22, 1997
Tobin denies he tried to hide cod report
ST. JOHN'S, Nfld. ( CP ) - Brian Tobin says he never tried as federal fisheries minister to hide a scientific report suggesting seals were not the reason that northern cod stocks collapsed.

"I frankly have no memory whatsoever of this document," he said Friday in an interview. "I don't know if I've ever seen the so-called document.

"If the suggestion is being made by anybody that I took a paper which was produced and kept it hidden, that is absolutely and totally false."

(Fri Aug 22 1997 16:39)
I'm a new investor without the slightest idea of where and how to begin. Or for that matter what chat room to enter to find out. Any comments would be welcome.

(Fri Aug 22 1997 16:39)
The last hour of trading ruined Puetz's weekend...

(Fri Aug 22 1997 16:42)
Spinning Again

Looks like the Spin Doctors got to work again today as the DOW closed at -6.14. Bill probably said Bob, I don't like all of poor people worrying over the weekend. We have to give some of them a chance to get out.

(Fri Aug 22 1997 16:44)
Spinning Again

Looks like the Spin Doctors got to work again today as
the DOW closed down 6.14. Bill probably said Bob, I don't like all of poor people worrying over the weekend. We have to give some of them a chance to get out, so that our tax take doesn't effect our budget reduction plans.

(Fri Aug 22 1997 16:47)
Friday August 22 3:16 PM EDT

Brazil's Central Bank sells dollars at 1.0925

SAO PAULO, Aug 22 ( Reuter ) - Brazil's Central Bank sold dollars at 1.0925 reais per greenback in a sell tender in the
commercial foreign exchange market, dealers said.

(Fri Aug 22 1997 16:55)
TVX-stock buy back plan
TVX may commence making purchases of
up to a maximum of 5,000,000 common shares which represents approximately 3.1 percent of the 162,782,838 issued and
outstanding shares of TVX.

(Fri Aug 22 1997 17:07)
When reading

A few days ago I glanced through a lenghty, but always comprehensive PDG report; but only find the costs at their Sigma and Kiena Mines, which are up for sale.

Then I noticed that a silver orebody ( Chimberos ) about 25kilometers from La Coipa Mine ( Chile ) was scheduled to start sending a one time "large slug" of silver ore to that mill over a 13 month period starting in October.

First thoughts were why would PDG/TVX want to dump a large amount of silver on the markets. Considering the low price of silver when I read the article, my next thoughts were maybe PDG sees the handwritting; as todays price rise suggests.

Justifiably; silver should be much higher.

(Fri Aug 22 1997 17:07)
Puetz -Yaple - George Cole @ Thoughts.
Puetz: Hang in there. : ) : ) : )

Yaple @ 16:39: Best to move on, this site is addictive. : ) : ) : )

George Cole: It will get much more positive, for gold from here on, eh!
Maybe six ( 6 ) weeks time, gold will take off. The central banks, are not
about to give the power over to the market. Power is a *commodity*
( economic good; *like* for whom ) . Modern Artificial Control System, you
must admit, the central bankers, have done an excellent job.
Steady as she goes. Take care.

(Fri Aug 22 1997 17:07)
Merger news
Those holding Blyvoor or Buffles shares take note. After the merger, all Blyvoor and Buffles will be converted to Durban Deep as John Disney has posted many times. However, Durban will not be registered with the SEC. Unless they determine that distribution of Durban shares will be exempt from registration, after the BLYDY and BLGMY is converted to DROOY, the shares will be sold and the proceeds distributed to holders. Bummer. If anyone has any info as to which way this is likely to go, please post it.

Ref: Letter from the Bank of NY to holders of BLYDY ADR's

(Fri Aug 22 1997 17:10)
gold analysis
An excellent site for astute gold analysis check out the following site ( for some this may be redundant ) ...

Yellow Jacket
(Fri Aug 22 1997 17:14)
YAPLE: I'm kinda new to the site too. I happen to like the smaller ( junior ) South African and Canadian gold stocks. My Durban Deep went up 25% in the last two days, and I'd like to think that it's not all luck. I spent some time researching the SA junior golds ( and their bigger parents or majority owners ) before settling on Durban Deep ( symbol DROOY ) . I suggest reading recent YAHOO Finance section artcles to get an idea of the state of affairs of the world economy ( it's all tied together these days ) , and look at what the real people talk about in chat sites like these. This is where the rubber meets the road. Not everyone is right all the time, of course, but it gives you enough to make up your own mind. Besides, the afternoon lull between the close of the US markets and the start of the Asian ones offers some interesting "conversation" and a good joke from time to time.

I get a charge out of picking my own investments. It's like going to Atlantic City, except you feel like you have an idea about where the wheel's going to stop. And then you place your bets to cover those numbers!! And the best advise...Bet with your head, not over it. The same applies to investing!!

George Cole
(Fri Aug 22 1997 17:15)
crash versus bear market
Today's sharp last hour rally reinforces my belief that a severe and protracted bear market is much more likely than a 1929 or 1987 style crash. Buy the dip has been an incredibly successful investment strategy these last few years. With many billions of dollars waiting to jump into the market on any significant weakness, a crash -- while not impossible -- seems improbable.

As gold investors can attest, the length of a bear market is just as important as its magnitude in crushing investors" spirits. There is nothing more demoralizing than a relentless bear that continues month after month with numerous suckers' rallies all the way down. That is what the dippers are in for.

My best judgement is that the Dow will retreat to the 7000 area by October, and then stage a 50% retracement during November and December. Then a new retreat commences in early 1998 to the 6000-6500 area. Then another 50% retracement. Finally demoralized investors through in the towel as the Dow stages a final plunge to the 5000-5500 area by fall 1998.

This scenario suggests a considerably less aggressive put strategy than called for by the crash scenario. It also is potentially much more bullish for gold shares than a sudden crash than soon bottoms out.

(Fri Aug 22 1997 17:16)
EMU Delay! the 'dark cloud' of EC CB's sales disappearing
BoE's George 'absolutely' in favour of EMU delay

MILAN ( AFX ) - Bank of England governor Eddie George said that he is "absolutely" in favour of a
delay in the introduction of the euro as it "would be very dangerous" to implement the third stage of
EMU without tackling the continent's structural unemployment problems.

In an interview in Il Mondo magazine to be published Saturday, George said: "I am absolutely
favorable to a delay in EMU because I believe it would be very dangerous to launch the euro before
tackling the unemployment problem."

George said sterling may join the single currency in a few years' time, but added that sterling's
inclusion depends "on whether the UK could be of help to Europe in finding a way to correct its
structural defects."

(Fri Aug 22 1997 17:28)
Inflation fears in U.K. -
UK July credit and debit card spending up 24.5%
yr-on-yr: CCRG survey

LONDON ( AFX ) - Spending on credit and debit cards totalled 8.679 bln stg in July,
24.5% up on the same month last year, according to the latest survey from the Credit
Card Research Group. The survey showed that credit card expenditure was up 24.9%
from last year at 4.877 bln stg, and that debit card spending was 23.9% higher at 3.802 bln stg.

On the high street, growth in credit and debit card spending was strongest in the household sector
which grew 38.2% year-on-year in July. Off the high street, credit and debit card spending on
services grew a huge 49.2% in the same period. CCRG Director Elizabeth Philips said: "The
combination of the summer feelgood factor and windfall payouts have contributed to the upswing in
overall spending."

(Fri Aug 22 1997 17:33)
European economic news
Excellent URL for European economic news...>

BoE's George 'absolutely' in favour of EMU delay

German economy ministry says Q2 GDP up 1.0% vs Q1

German July import prices up 0.6% vs June

French May retail sales down 0.4% vs 0.5 fall in April

UK July credit and debit card spending up 24.5% yr-on-yr: CCRG survey

UK CBI revises down 1997 RPI-X forecast to 2.3 pct from 2.5

French 1998 budget deficit will be 'very close' to 3%/GDP

Bundesbank leaves rates, but IFO see 0.5% rise early 1998

UK July retail sales volume up adj 0.3% from June; up 6.5 yr-on-yr

UK July final M0 up adj 0.1% from June; up 5.8% yr-on-yr

UK July provisional M4 up adj 0.8% from June; up 11.8% yr-on-yr

German July PPI up 0.1% vs June; up 1.4% yr-on-yr

West German July Ifo business climate index 98.1 vs 96.1 in June

French budget deficit confirmed at 3% for 1998

FOCUS: July West German Ifo data show export-led demand; domestic

OECD says Germany will not make 3% deficit criteria

German July M3 up 5.7% annualized from Q4 1996

Rexrodt says OECD survey 'confirms' govt belief that German economy

FOCUS: Bundesbank early rate move seen unlikely after benign M3 data

Eurobourses recovering from post Dow dive jitters

Unexpectedly large PSDR points to robust economic growth

Rexrodt sees German economic acceleration, but also more jobless

German businesses 1996 world market share 10.6% vs 11.1: DIHT assn

No compelling reason for German rate hike

Swiss July PPI up 0.1% from June; import price index down 0.2%

UK finance directors tell Brown to revise pension rules

OUTLOOK: UK July retail sales volumes up 0.4% from June, up 5.9 yr-on-yr

OUTLOOK: UK July prov M4 up 11.7% yr-on-yr; M4 lending 6.0 bln stg

OUTLOOK: UK July PSDR 1.5 bln stg

U.S. July industrial output up 0.2%

French provisional Q2 employment up 0.3%

(Fri Aug 22 1997 17:33)
@goldbug heaven
Allen: Ancient Babylon was prominent, during its entire history, as a religious center. Located on the Euphrates River, it was also a center of trade where east met west. What "Babylon the Great" may prophetically represent is a mystery to me. ( See also Rev. Chps 16,17,18 ) USA could apply, but it seems to be much broader to me. Perhaps it represents all those who have placed material things ahead of God. Just a thought. Gold bugs take heart, in God's city the streets and walls are pure GOLD!
( Rev. 21:18,21 )

(Fri Aug 22 1997 17:33)
@Home, Home On The Range:
The intra-day range of December Gold was $6.80! High $331.8 Low $325.0. And then we had that "small" range action in the Dow. I think I would call that a catalytic sort of day. :$ )

Yellow Jacket
(Fri Aug 22 1997 17:51)
@ Work and leaving
DJ: Kinda old news ( 8/8/97 ) , but may be useful info to some re: the way Blyvoor and Buffels will be redeemed for Durban Deep.
DURBAN Roodepoort Deep shed 245c to R10.75 when revised terms for the takeover of Buffels and Blyvoor were announced, as they involve the issue of more shares. On May 26, it was announced that holders of 100 Buffels would be issued 77 Durban Deep; this is now 110. Holders of 100 Blyvoor will now get 25 Durban Deep instead of 20. Since the original ratios were established, the price of Durban Deep has dropped by 57%, but Buffels and Blyvoor have each retreated by only 36% and holders would have been prejudiced in receiving overpriced Durban Deep paper.

Using current market prices, holders of 100 Buffels worth R1 050 will get R1 182 worth of Durban Deep. Holders of 100 Blyvoor worth R265 will get R269 worth of Durban Deep. The directors maintain that the merger will benefit all shareholders, and that the decision to amend the ratios was driven by the downturn in the gold market. However, Durban Deep will do well out of the purchase of the South Wits mineral rights from Randgold: the terms of acquisition remain R55-million, to be settled by the issue of 2.1-million Durban Deep at R26 each. But there is a subtle rewording of the balance of the payment terms; instead of the seller being issued with a right to receive a 5% royalty of any future revenue, it now gets 5-million preference shares carrying the right to a dividend equal to 3% of the gross future revenue generated from the mineral rights. Randgold also lost ground, shedding 70c to R15.85 after the announcement, but recovering later.

(Fri Aug 22 1997 18:15)
Thailand - more serious than alluded
..sorry can't post URL - requires password...
August 22 1997

Bangkok says it borrowed $24bn to defend currency

Thais count cost of baht battle

THE Thai Government borrowed $24.3 billion ( 15 billion )
to defend the baht against the wave of recent speculative
attacks, it disclosed yesterday. Although its efforts failed,
with the currency being forced into an effective devaluation in
early July, the Thai authorities must now repay the money
within 12 months.

Because $14.8 billion of the debt is offshore, any attempt by
Thailand to square its accounts could be a huge drain on its
foreign exchange reserves, which stood at $29 billion at the
end of July. Chaiyawat Wibulswadi, the Thai central bank
governor, said that the $16.7 billion international rescue
package, triggered by the IMF's approval on Wednesday of
a $3.9 billion standby loan for Thailand, would be enough to
cover its reserves. The Thai rescue is the second-largest

Much depends on investor confidence. There was a
lukewarm initial response by markets to the deal  the
biggest since Mexico was offered $50 billion after its 1994
peso devaluation crisis. As other regional currencies,
including the badly-hit Indonesian rupiah, recovered, the
baht's offshore rate yesterday slipped to 32.30/50 from
Wednesday's 31.80/90.

Analysts suggest that there will be an immediate easing of
liquidity. However, international investors are worried that
the situation may be worse than the Thai authorities are
letting on. Some believe that the country's short-term debts
may be as high as $45 billion, and things could be very tight
if it had to reimburse all its lenders in the next couple of

The situation would also deteriorate if the authorities insisted
on bailing out the rest of the financial sector companies or
guaranteeing their deposits, which may amount to $30 billion.
If they do not, however, there could be a run on the banks,
with potentially devastating economic consequences. It is
also unclear whether the structural reforms to which
Bangkok has publicly committed itself, at the IMF's behest,
are far-reaching enough to reassure investors.

Although currency speculators made money out of the baht
crisis, many foreign investors suffered big losses. Micropal,
the statistics company, says that many investment fund
indices fell sharply.

(Fri Aug 22 1997 18:28)
its just a matter of time
I'm new at this, but it appears to me this market volatility indicates we are near a top. Those investors "in the know" need these rallies to get out safely. We all know who's going to be left holding the bag. Perhaps these bold new investors wouldn't be so confident if they knew how long it took for the market to rebound after '29. Not a single person I've talked to has any idea.

Bart: Like the new format. My only suggestion might be a *spelling checker*. I really need it!!!! And yes, I am a product of public education.

(Fri Aug 22 1997 18:30)
DJ & Yellow Jacket ( is that you JDisney? ) :....When does the BLYDY/DROOY exchange take place? Can you opt out of redemption cash & keep shares? Please keep us posted. Thank you. RON: Demo! Good one!!

(Fri Aug 22 1997 18:32)
Dow/Gold Ratio 24.14 We sure are having a hard time getting down to the 23's

(Fri Aug 22 1997 18:38)
Allen, Lurker: Re Babylon, to the disappointment of goldbugs everywhere the end is not yet!; ) In all prophecy in or relevant to Revelations countries, directions etc. are in relation to Israel. If prophecy means anything Babylon must be a literal city. Its destruction is future as it never has been completely destroyed off the face of the earth ( it wasted away instead ) nor has this destruction happened in one hour. Hence its destruction is future ( Saddam has been rebuilding/restoring it for years ) after it has become a prosperous city again, and its destruction is possibly thermonuclear. It will be a rich city, but not commerce wise as it will only buy luxuries, not trade them. A future reversal of fortunes then, short term anyway, would appear to be in the cards for Iraq. This may all seem preposterous but so would the idea ofIsrael as a nation between 72AD and 1948, which was also likewise prophesied to be a country again. Sorry folks for the Bible talk, but bear it in mind for future trading reference: )

(Fri Aug 22 1997 18:46)
@the real casino
Enough of house guest Sean Whelan is into gambling and we're off for some of the "real thing" at the Sheraton Casino in Sydney......will help fill the void of a non-market night...and kinda got that kind of feelin.....See ya dudes......

(Fri Aug 22 1997 18:52)
What does anyone think of this "theory": Dollar drops against yen and mark, gold price rise would be directly proportional?

(Fri Aug 22 1997 18:52)
APH: What are the technical probabilities re: dec gold surpassing 336 short term?? I know that not you ( or anyone ) knows for sure; but I sure appreciate your technical interpretations!!!!!! mil gracias

Yellow Jacket
(Fri Aug 22 1997 19:04)
@Just Got Home
SAVAGE: As of last week, "D" ( urban Deep ) -Day is set for Sept. 12. Could not find
anything new this week. Will post if I do.

Yellow Jacket
(Fri Aug 22 1997 19:10)
SAVAGE: Just looked at your post again. Who's JDisney? Not Me. Was there another Yellow
Jacket buzzing around here before?

(Fri Aug 22 1997 19:16)
@...psychology driven market requires contrarian gold price test
If we are willing to accept the premise that the current stk mkt is driven by psychology or great expectations rather than fundamental benchmarks then perhaps we need to see gold price tank sharply below $300 while the DOW and US$ remain in a bear hold.

I reason that more investors need to draw attention to gold price in relation to its impact on supply. If the price of gold were to sharply break below support and fall under ( say ) $285 even Barrick's ( the industry low-cost leader ) total costs would not be covered.

In this situation three possible scenarios would result:

1 ) Spin doctors would herald the end of gold and the pending closure of mine production and - as expected, reduced supply;

2 ) The Gold Mining big boys - Barrick and other XAU hedgers, would likely take $285 gold price seriously and unwind their hedges for locked-in profits; and,

3 ) CB's would consider delaying bullion sales until the metal recovers.

The first action would draw investor attention to the possibility that a supply shortage in new production would trigger increased investor demand in anticipation of srong metal demand and higher gold prices in context of ( the alternative ) a bearish stk outlook ( given my Bear assumption ) .

The second action would drive short speculators to cover and lead to
increased gold prices.

The third action would reduce the probability that CBs dump gold and thus kill-off a strong gold price rally until ( at least ) the pre-OZ ( RBA ) announcement - $340 - $360 price range.

It may sound wierd but perhaps a ( contrarian ) severe gold price drop below $300 would round up the industry, investment, and CB communities to act ( or, in the case of the CBs, not sell until $340+ range ) in unison to establish a new tier of support in the $340- $360 range "before" 1997 year-end.

Just wondering...

(Fri Aug 22 1997 19:18)
NAILZ: I didn't know that about "plumb". I gave Steve a right answer but the wrong subject. I told him about surveyors & plumbers. The stuff you learn at Kitco.

(Fri Aug 22 1997 19:35)
NOMERCY: Here at Kitco we have talked a lot about welfare, the bum next door type, and corporate welfare, the Chrysler type, but now we are seeing national welfare, the Thailand, Argentina type as shown in your several posts of today. Seems that the IMF is just a fancy welfare office. Where does it stop?

(Fri Aug 22 1997 19:45)
...murkier waters ahead...
Li Peng has attacked as "utterly unacceptable" a
new defence arrangement being discussed by Japan
and the US to cover emergencies in the Taiwan

(Fri Aug 22 1997 19:50)
Donald its only 'paper' - plenty more where that came's more 'issues' clouding & straining US - China relations along with trade balance and US Treasury holdings
The State Department has backed a US
congressman's claims following his clandestine visit
to Tibet.

(Fri Aug 22 1997 19:52)
Washington has criticised Beijing for jamming
broadcasts of the US government-funded Radio
Free Asia.

Backing the station's claims, made this week, that
"significant interference" was reported on its
Putonghua and Tibetan broadcasts into China,
State Department spokesman James Rubin urged
authorities to stop the jamming.

(Fri Aug 22 1997 19:55)
Yellow Jacket: John Disney was/is our resident S.A. expert. You still out there John? What's your take on BLYDY/DROOY exchange?? ( Yellow Jacket...thanks ) !

(Fri Aug 22 1997 20:00)
Asian markets & currencies
The Thai baht yesterday slumped to a record
domestic low of 34.30 against the US dollar as
investors worried about the billions of dollars spent
on a failed defence of the currency, dealers said.

2 ) Indonesian stocks fell 4.75 per cent to a 10-month
low yesterday on concern a weak rupiah and high
rates could hurt profit growth and trigger a rash of
company failures.

(Fri Aug 22 1997 20:02)
That Japan has manipulated its stock market is "widely known".

(Fri Aug 22 1997 20:08)
Has anyone got any idea what was behind the big runup in silver today?
17.7 cents is the biggest move that I recall in the past year... must be something behind it, huh?

(Fri Aug 22 1997 20:09)
Cashed out?
Yellow Jacket - Yes, it is somewhat old news. Behind on my mail. My concern is that 22 days from now, you and I could receive a check instead of DD shares. Do you have any input on that?

P.S. I thought I had already posted this, but couldn't find it. If it is a repeat, my apologies.

(Fri Aug 22 1997 20:10)
Michigan economist forecasts deflation.

(Fri Aug 22 1997 20:16)
BILLD: Here are some insights on silver today.

(Fri Aug 22 1997 20:16)
@ High Ho Silver Away:
Silver up 17 cents today. See URL daily chart of silver. Back to earyly July, l997 prices.

(Fri Aug 22 1997 20:21)
Broken charts?
Bart - Your 24-hour charts seem to be broken, or is it just me?

(Fri Aug 22 1997 20:24)
nomercy: your post regarding 24% y-o-y increase in useage of credit and debit cards gives one something to ponder. That is, with the merchant remitting 3-5% to VISA, Master Card, AMEX, Discover, etc. for credit cards ( I'm not sure for debit cards ) , aren't we on our way toward building-in a permanent 3% inflation to the economy from the use of these cards ? I recognize these cards do not represent 100% of commerce. Cash and checks are popular, too. But damned if I'm not in a store and the person in front of me in line invariably uses plastic !!

Your posts are appreciated. Keep up the good work. Cherokee, are you on holiday ?

(Fri Aug 22 1997 20:31)
How long before this idea reaches the states?

(Fri Aug 22 1997 20:33)
Silver Futures Rise Sharply

By Herbert G. Mccann
AP Business Writer
Friday, August 22, 1997; 5:23 p.m. EDT

Silver futures prices rose sharply Friday on the New York
Mercantile Exchange as investors soured by the stock market's
steep midday slide looked for an alternative.

More at:

(Fri Aug 22 1997 20:40)
Kenya: Bank governor fears debt default


By Michael Holman and Michela Wrong in Nairobi

Kenya is in danger of defaulting on its $6.1bn external debt unless the
government negotiates a new agreement with the International Monetary
Fund, Micah Cheserem, the country's central bank governor, said

The governor's comments followed news that an IMF team will arrive in
Nairobi this weekend to reopen talks on terms for a new loan. The move
followed a call to Michel Camdessus, the IMF managing director, from
President Daniel arap Moi.

The gravity of the situation was underlined by Mr Cheserem, who said:
"The possibility of accumulated debt arrears is real if the present impasse
with the Fund is not resolved.

"Debt repayment difficulties could emerge in early 1998," he said in an
interview with the Financial Times. "But arrears could emerge even earlier
if there was a political crisis before then."

Despite Mr Moi's latest approach, most observers detect little evidence
that the government is prepared to take action to curb top-level corruption,
a condition spelt out by the IMF for lending to resume.

Kenya is one of only a handful of African countries which have not needed
substantial debt rescheduling since independence. But last month's
breakdown in talks with the IMF over a $220m loan, coupled with
continuing political violence, has eroded investor confidence.

The nearly 30 per cent drop in the value of the shilling since the IMF
suspension - from around 55 to the dollar to this week's low of 71.50 -
has made servicing far more expensive.

Drought is expected to reduce growth in gross domestic product to an
estimated 3 per cent, World Bank credits are being cut, donor aid is
expected to fall, and violence on the coast, where the death toll now
exceeds 37, will hit receipts from tourism, the country's largest foreign
exchange earner.

So far, the central bank's substantial official reserves - which stood at
$1.049bn on May 1 and $808m in mid-August, have given Kenya some
leeway. In addition, Mr Cheserem has made it clear that he will not tap
those reserves to save the shilling.

The exchange rate policy of the central bank "is not to support the shilling
at any pre-determined or desired exchange rate, but to leave it to be
largely determined by market forces," he said.

The shilling now appeared to have stabilised at around 70 to the dollar:
"We feel that this is undervalued," Mr Cheserem said.

Figures provided by Mr Cheserem show that Kenya's external debt has
fallen from $6.459bn in 1995 to $6.079bn in 1997, and annual debt
service payments have dropped from $696m to $509m over the same

Despite the apparent improvement in Kenya's debt profile, underlying
trends are worrying, economists say. There is little prospect of the shilling
strengthening while business confidence remains at its current level, with
investors preferring to send profits abroad.

Many observers believe Kenya faces a turbulent run-up to elections likely
to take place before the end of the year. Ethnic tensions are on the rise and
opposition supporters have threatened to make the country ungovernable
unless the constitution is reformed.

Last week nervous investors declined to roll over KSh7bn ( $100m ) of
their holdings in Treasury bills falling due, forcing the government to raise
rates on yesterday's offer of 91-day Treasury bills to 23.6 per cent, an
increase of 4.8 percentage points on the previous tender.

Adding to the government's difficulties are increasingly heavy service
payments of the country's $474m arrears owed to the Paris Club,
rescheduled with effect from 1995.

Annual repayments have risen from $24m in 1995 and 1996 to $47m this
year, and climb to $71m next year, $95m in 1999 and 2000, and are due
to reach $119m in 2001, the final year. The $70m of commercial debt
arrears which have yet to be rescheduled through the London Club
represents a further burden.

(Fri Aug 22 1997 20:47)
My kitco post of 8/19/97; 23:29 talked of the "bull/bear trap" ... ( --depends on your positions, & perspective ) . Next week, we could see the DOW/S&P sky-rocket to new highs, even.... ( but don't bet on it ) . After 30+ years of investing, including both charting & fundamental research, I've yet to hear about the "crystal-baller" who knows the next day's, next week's action, reliably, consistently.

Personally, even if someone had/has mastered such an art, I would not trade it for the ability to to recognize a turning point, and/or a
trend over several weeks; or over a few months; and preferably over several months, at a time.

My interest, and focus, since the mid-'70s, has been commodity futures,
as well as both stock & commodity option strategies, oriented toward shorter-term trading objectives. In 1972 I saw a chart titled "Velocity of Demand Deposits - NY Banks", in the publication "Bank Credit Analyst", published from both Montreal & Bermuda, I believe. It introduced me to, and ultimately taught me the power & importance of cycles, and technical charting. I have made, and lost, several "fortunes", in this education, and this game ... of 'blood/sweat/tears; of discipline; and of 'chance'. ( A fortune, is a relative thing ...after all. ) And the experience of the "market-place" is, perhaps, the
truest, most honest teacher.

Today's actions in the metals, with gold up $3.00, and Silver up 17+ cents, were not "short-term" - "confirmed" by strong advances in key-stocks, such as highly leveraged ASA ( nyse ) , nor by highly leveraged/thinly traded paladium & platinum.

Evenso, the XAU is stubbornly attempting to move up and away from the the very powerful, "holding-like-a-magnet" long-term chart-level of "100" . Once it does so, we will likely be: at "lift off" ( - ie, at sustained
and accelerating price advances ) , for precious metals investment

Most likely, paladium, platinum, and 'limited-float' stocks, like the ( closed-end-fund ) ASA ( nyse ) , will accelerate, just before gold & silver themselves do.

Meanwhile, the "bull-trap" possibility, of a Dow/S&P recovery rally, cannot be ignored. There could even be a 'final-stampede' into US DOW and S&P stocks, by mostly fund managers. And maybe even new highs,
for the S&P, &/or the Dow. This possibility cannot be entirely ruled
out ( but, again, I wouldn't bet on it ) .

Such a 'scenario' would be the ultimate "hook", or "bull-bear-trap" ...
before the real BEAR, snares the "Yuppie-Kinkdom's" "sacred cow",
that is ... "sacred-dow". There could even be an attempt at a
double top in bonds ( ( --but don't bet on that one, either; the dollar
is under just too much pressure ) .

Today, Aug. 22nd: evaluating today's action in the 25 gold & silver mining stocks, that I have been following daily, since last year, my "2-cents" is as follows.

( a. ) Of the 15 issues traded on the NYSE, 13 were up, 1 down, & 1 unchanged. The 3 that were most up in price/percentage were: HL @ +4.76%; HM @ +3.62%; and AU @ +2.94%. ( -This stock, Amax Gold, is my personal/intuitive 'favorite'. )

( b. ) Of the 4 stocks I follow on the AMEX, ECO was up +2.47%.

( c. ) Of the 6 So. Africans I am keeping an eye on, SGOLY was up +6.9%,
and KLOFY up +4.07%.

The evidence, and 'clues'... as I can best decipher them ( -- read the 'tea-leaves' &/or the 'crystal-ball' ) , suggest that all systems are a very bullish "GO", for gold & silver investments.
Although there will likely continue to be the week to week ups & downs of higher highs & higher lows; we are evenso, approaching some given point at which a stampede into the metals, and out of stocks, will be "ripe". The increasing volatility on heavy volume, of the US stock market, signals us that this kind of event is approaching.

Mining shares continue to be accumulated by strong/quiet money.

Foreign Currencies, as I have recommended here over the last month and more, will lead the metals in this new "bull-chapter".

U.S. Treasury Bonds have their highest "NET-SHORT" position among 'COMMERCIALS' ( -the "big-boys" ) , in the entire history of this futures market. Accelerating interest rates in the U.S will be the achilles' heel of the US stock market, and the US economy.

And conversely, Gold has one of its highest "NET-LONG" positions, among 'COMMERCIALS', ever in its US trading history.

In closing, I would again draw your attention to Mr Ron Jett's charts
at; and in particular,
to charts #7 and #8, which I believe reveal the true "heart-beat" of gold. The 7/9/18 wk/ "Rate-of-Change" values, and technical indicator plot-lines, and their divergences versus the weekly gold prices; have identified and signalled every important turning-point & trading opportunity for gold and silver investments, over the last 20+ years.

I sincerely believe this "roc" formula is indeed, the 'heart-beat' of
gold. It is once again identifying for us, another exceptional, rare,
turning-point for the metals, and an outstanding buying opportunity.

Best Regards for your successful investing, and trading. Feel free to e-mail me.
David Blair Macrory, C.T.A.
San Diego
P.S. The evidence continues to mount: between now and early next year, we will likely witness the first chapter in an unfolding bull market
for gold & silver, that will most likely continue for many years;
as the US dollar, and US stock & bond markets, enter their long-term season of "economic winter", along with the US economy.

Strad Master
(Fri Aug 22 1997 20:51)
S & P and concerts
MOONEY: ( With the new Kitco format, I hope you see this. ) Yes, I printed out your S & P strategy and am taking it under advisement. Seems like a great way to go but still it is a bit rich for my blood. As to Toronto, I haven't been back there in awhile but I'll let you know if I ever am. I've cut back a lot on my concertizing since I started a family. It's just too unpleasant to be away from wife and kids for great lengths of time.

(Fri Aug 22 1997 20:52)
Japan: Economy weathers the storm?


By Gillian Tett

Almost unnoticed, Japan's economy is making history. Yesterday, the yield
on 10-year government bonds closed at a mere 2.055 per cent. That was
not only the country's lowest level ever but, as Marshall Gittler of SBC
Warburg points out, the lowest anywhere since the US's long yields fell to
1.85 per cent in 1941. ( Before that, previous lows had occurred in 17th
century Genoa, when four to five-year yields were 1.25 per cent. )

Financial historians apart, why should anyone else worry about this? The
answer is that these rock-bottom interest rates may be a sign of something
going seriously awry in the world's second-biggest economy.

On August 19, another big construction company, Daito Kogyo, went
bust, the third general contractor to fail in six weeks. Total liabilities from
bankruptcies doubled in the first six months of 1997. As the table shows,
the most recent economic data have been dreadful: retail sales, car sales,
housing starts; machinery orders, all have fallen sharply.

Increasingly, traders are beginning to fear that Japan might be heading into
a downturn. And if it is, that would have profound implications not only for
Japan itself but also for its trading partners in the US and in south-east

For the US, a slowdown would raise the possibility of increased trade
friction, since exports are rising as demand slows.

For the Asian tigers, struggling to recover from currency turmoil, a
slowdown would be worrying since Japanese companies outsource so
much production to them. Reduced Japanese demand would spell trouble
for one of the locomotives that could pull them out of their currency woes.
That would hurt them, and would put more strain on the other locomotive,
the US.

As for the Japanese themselves, a slowdown would mean they are
reduced to one economic policy option: waiting.

Until recently, the prospect of a sudden slowdown looked unlikely. Since
late 1994 the economy has been recovering slowly from the bursting of the
bubble economy in the early 1990s. In 1996 gross domestic production
rose 3.6 per cent - the highest rate of any G7 country. No one expected
that rate to be maintained. It had been due partly to a big fiscal stimulus in
1995 and the government has since tightened fiscal policy considerably.
But, if the Japanese government was to be believed, 1997 was also
supposed to be the year when growth finally became self-sustaining - it no
longer required emergency measures. And, indeed, earlier this summer,
growth was still strong enough to prompt speculation that interest rates
might soon rise.

Now, the mood has changed so much that investors appear to believe that
bonds remain the best investment option in Japan - even at record low

What has gone wrong? The economy has become rather like a twin-engine
aircraft with one motor spluttering. On the one hand, large manufacturing
companies are performing strongly, thanks to strong export growth. In July
the value of manufacturing exports were 12.1 per cent higher by value than
they had been a year earlier. Richard Jerram of ING Barings says that
operating margins at large manufacturing companies have risen from 2.71
per cent in fiscal 1993 to 4.52 per cent in fiscal 1996. And a recent survey
of business sentiment by the Bank of Japan showed that leading
manufacturers are now more upbeat than at any time since November

But on the other hand, domestic demand is faltering. Hence the falls in
consumption and the bankruptcies among construction companies. Hence,
too, the decline in confidence among service sector companies and smaller
manufacturers who tend to be more exposed to the domestic market ( see
chart ) . Profit margins at smaller manufacturers, unlike those at larger ones,
remained flat in 1993-96.

The Japanese government insists that the recent slowdown is an aberration.
It puts the blame on one factor - the increase in consumption tax from 3
per cent to 5 per cent in April. This, it says, depressed consumption in the
second quarter of the year. But it hopes that once the summer is over,
consumer demand should return to the relatively healthy pre-tax levels.
Any slowdown, as Mr Hiroshi Mitsuzuka, finance minister, remarked
earlier this week, should be "temporary".

Well, perhaps. But this reasoning depends on two assumptions. The first is
that the pattern before the April tax increases was the "underlying" trend.
The second is that there will be reason for Japanese consumers to feel
more cheerful later this year. Both can be questioned.

Domestic demand before the April tax rises was also abnormal, since
consumers were rushing to make purchases before the increases took
effect. And there is little reason to expect an impending consumer boom.
Pay packets are barely rising, and household incomes are being squeezed
by the removal of special income-tax breaks this year. This, with the
consumption tax rise, has removed some 2,800bn ( 15bn ) worth of
spending from the economy, according to calculations by Long Term
Credit Bank.

These trends do not add up to a recession: most economists still expect
growth of between 1 and 2 per cent in fiscal 1997, amid export growth.
But what is most disturbing is that if the domestic stagnation continues - or
if exports falter because of a US downturn or a drop in Asian demand
because of the latest currency turmoil - the Japanese government has few
policy tools to combat a downturn.

Monetary policy is barely an option. Interest rates have been at record
lows to boost the economy since the autumn of 1995. With credit demand
flat, cutting rates further is unlikely to provide much stimulus. Fiscal policy
is also exhausted. The 1995 fiscal package certainly boosted growth. But it
cannot easily be repeated: the general government deficit, excluding social
security, was 7.2 per cent in 1996, and Japan faces a growing budget
pressure from its ageing population.

Japan could, of course, aim to create an export-driven recovery, by
pushing the yen down further. But this would be hard to achieve, since
interest rates are already so low. It might not do enough to help companies
depending on domestic demand. And it would provoke complaints from
the US.

There is a fourth option - sweeping domestic deregulation. This is
undoubtedly what Japan will need in the longer term. On paper, the
government already has broad deregulation plans, including financial
services, distribution and retailing. They have a shining precedent to point
to: recent deregulation of Japan's mobile telephone market has led to a
surge in that sector.

But mobiles phones are something of a special case, because demand for
them is buoyant. There are few such easy gains. Anyway, it is still not clear
that Japan will be able to maintain the political will needed to push through
far-reaching liberalisation. Even if the government does summon up the
courage, international experience suggests that such supply-side measures
can take a long time to produce strong growth.

So where does it leave the government? For the moment, simply waiting
for something to turn up. Perhaps it will. Consumption could rebound this
autumn. Japan's land prices may already be bottoming out. Its financial
sector may respond to deregulation unexpectedly quickly. Exports may
continue to rise irrespective of Asian turmoil.

But if this does not happen, the implications are disturbing. If demand falls
and exports rise, that could re-ignite trade tensions with the US. Charlene
Barshevsky, the US Trade Representative, has recently given warnings
about the dangers posed by Japan's rising trade surplus, which increased
70 per cent in the year to July. US car makers have been threatening to
ask the US government to consider retaliatory actions against Japan if it
does not open up its car market further.

A domestic slowdown could also exacerbate existing problems in
south-east Asia. In 1996 47.6 per cent of Japanese imports came from
elsewhere in Asia. slowdown in Japan could hurt this trade. At the same
time, 46 per cent of Japanese exports go to Asia, half to South Korea,
Thailand, Philippines, Indonesia and Malaysia. Weaker growth there could
pit Japanese manufacturers against other Asian competitors with a new

Perhaps most alarmingly, a new downturn might even sap the ardour to
push through painful deregulation. In theory, a shock might be what is
needed to push Japan into serious reform. In practice, some Japanese
officials fear that stagnation could hamper reform. As one architect of the
Big Bang financial deregulation admits: "It is easier to push through Big
Bang when companies are confident - particularly if reform creates fears
about job losses."

For the moment, this gloomy scenario remains just a possibility, not a
probability. Japan may yet perk up again later this year. The bond markets,
after all, have been wrong in the past. All the warning bells are sounding. It
would be foolish to ignore them.

(Fri Aug 22 1997 20:53)
To follow up on my earlier post regarding the potential contribution to permanent inflation and interest rates from increased use of credit and debit cards, I submit the a story from today's CNNfn report. They say that 2/3 of GDP is consumer spending.

(Fri Aug 22 1997 20:55)
Thanks for the advice Yellow Jacket and 6 pak, Am I wrong or is Permanent Portfolio a very successful company in gold futures?

Strad Master
(Fri Aug 22 1997 21:00)
A Concert Plug!
ALL: Speaking of concerts - I will be playing one here in the Los Angeles area next Sunday ( Aug 31 ) at 4 PM. It will be at the Bing Auditorium of the LA County Museum and is free. Anyone in the neighborhood, please come and then visit backstage afterward. I'd love to meet any and all fellow Kitcoites! Also it will be broadcast live over KUSC radio ( 91.5 FM, 91.1 in Thousand Oaks, 88.7 in Santa Barbara and 88.5 in Palm Springs. ) If you can't come, flip it on at 4 PM. If you can, it's best to be there a bit early as they close the doors due to the radio braodcast before 4. Shall I be so arrogant as to call this a "Golden Opportunity" to hear me play? ( That's for Bart! ) Hope some of you who live in this neck of the woods can catch it!

(Fri Aug 22 1997 21:07)
a question
Puetz, GSC, Donald, anyone else: Is the recent ( i.e., last 2 weeks ) market action indicative of a top? Have there been similar periods which were not tops? I have always been more interested in the economic fundamentals ( and we all know those don't matter anymore ) and haven't paid much attention to the market internals. So I'd appreciate your truly objective opinions. I know we all WANT the market lower, but I have the feeling the something is different right now. I'm afraid that may be just from reading this site all day.
Donald- don't mean to detract you from the 'Donald News'- I've decided to just read your comments rather than the articles themselves- keep up the good work, it's appreciated!

(Fri Aug 22 1997 21:12)
Strad: What will you play? And will it be with your Stradaverius?

(Fri Aug 22 1997 21:16)
vronsky, i got your information, thanks

(Fri Aug 22 1997 21:18)
George S. Cole- Difficult to predict the type of market we might expect,
when based on one day's action, and especially if that day is Friday.
From my past observations, the actions on a Fri. are usually counter trend based on traders actions, not wanting to hold positions over the weekend. In a bull market the actions on a Friday would genrally be down,
and in a bear market the opposite is true.

Have a pleasant weekend-all.

Strad Master
(Fri Aug 22 1997 21:35)
VRONSKY: Actually this will be a concert of violin and guitar duets. I wll be playing with a guitarist colleague of min who is the head of the classical gutar department at USC. It will be a big mixture of works for violin and guitar and also a lot of violin solos with the piano accompaniment arranged onto the guitar. Works by Bach, Leisner, Paganini, Massenet, Ibert, Sarasate, Bartk, and several others. The program is varied and unsual. Some of the pieces are our exclusive property so no one else plays them. BTW, the LA County Museum of Art is is on Wilshire Blvd. As to which instrument I'll be playing - I'll leave that a mystery until afterwards.

(Fri Aug 22 1997 21:39)
Federal Reserve @ December 1913 - 1997
Woodrow Wilson and Carter Glass are given credit for the Act by many
contemporary historians, but of all those concerned. Wilson had least
to do with Congressional action on the bill. George Creel, a veteran
Washington correspondent, wrote in Harper's Weekly, June 26 1915:

"As far as the Democratic Party was concerned, Woodrow Wilson was without
influence, save for the patronage he possessed. It was Bryan who whipped
Congress into line on the tariff bill, on the Panama Canal tolls repeal,
and on the *currency bill*. Mr. Bryan later wrote, "That is the one thing
in my public career that I regret - my work to secure the enactment of
the Federal Reserve Law. "

On December 25 1913, The Nation, pointed out that "The New York Stock
Market began to rise steadily upon news that the Senate was ready to pass
the Federal Reserve Act."

This belies the claim that the Federal Reserve Act was a monetary reform

A comparative print of the Federal Reserve Act of 1913 as passed by the
House of Representatives and amended by the Senate shows the following
striking changes:

"To suspend the officials of Federal Reserve banks for cause, stated in
writing with opportunity of hearing, require the removal of said
officials for incompetency, dereliction of duty, fraud or deceit, such
removal to be subject to approval by the President of the United States."

This was changed by the Senate to read: "To suspend or remove any officer
or director of any Federal Reserve Bank, the cause of such removal to be
forthwith communicated in writing by the Federal Reserve Board to the
removed officer or director and to said bank "

We no longer know what the conditions for removal are, or the cause.????

Lan Man
(Fri Aug 22 1997 21:42)
@Closing Bell
COMEX and NYMEX precious metals futures ended mostly higher
Friday, led by gains in silver, with renewed weakness in the U.S.
dollar and stocks and bonds providing support, traders said.

"There was good fund buying in silver in particular, and it broke
out above the $4.60 level not seen since early July, but gold
didn't really do anything too dramatic and still under the top of
the range around $330.00 ( basis spot ) ," said Scott Mehlman, chief
bullion dealer for Credit Lyonnais Rouse in New York.

"Most of the action was futures market related in response to the
weakness in the dollar, stocks and bonds," he said.

September silver is heading into its delivery period from August
29 and open interest in the contract at around 193 million ounces
remains higher than COMEX warehouse silver stocks of 165 million
ounces, after heavy withdrawals of around 20 million ounces from
the warehouse in the past six weeks.

( Reuters 04:30 PM ET 08/22/97 ) For the full text story, see

Yellow Jacket
(Fri Aug 22 1997 21:59)
DD News Anyone?
DJ: That would be a pity. I wonder if they will try to get the SEC to recertify.
I've searched for news, but SEC-EDGAR has nothing and I keep getting old links or
stuff about Elton John ( he sang a song called "Durban Deep" - wonder what it's about? ) .

Bill Buckler
(Fri Aug 22 1997 22:00)
Gold is now the only precious metal that is still below its 100-day moving average on the daily bar chart. Silver broke through with the 17 cent upmove. See all three charts at

The funniest thing I have seen explaining silver's move on Friday was on Bridge news where it was attributed to "demand catching up to supply". Gold demand caught up with supply about ten years ago and is now running about 1000 Tonnes a year ahead of newly-mined supply. Dubai, for example is planning to double its Gold production earmarked for export to India.

One other snippet. I note that U.S Funded debt as reported by the Treasury at has broken through the big $Us 5.4 TRILLION. From the start of fiscal 1997, it is up by 175 Billion. Isn't the government claiming a $US 37 Billion deficit for 1997?

(Fri Aug 22 1997 22:00)
DAVID: I appreciate your posts, I believe they are the best on market analysis presented by the posters here. And I hope you will continue. .

(Fri Aug 22 1997 22:03)
in sack-o-tomatoes
WSF: Nice observation about the dangers of reading this site. Saw a pundit on CNBC today who noted that real tops are generally much broader than the one we've observed to date. New investors should therefore be on guard. Goldbugs DO tend to talk up the metal. It's all very entertaining -- and VERY educational. But one must be cautious and take into account the natural bias.

(Fri Aug 22 1997 22:09)
Ron- Thanks for your input, although the only person I listen to on CBNC is Jim Rogers. ( Yea, I know- I WANT him to be right )

(Fri Aug 22 1997 22:15)
Savage - The original Dec Gold down sloping gann trend line has moved down from 336 to today at 331.9 ( today's high 331.8 ) . Yet another gann line has come into play at 336. So the gcz7 must still jump over 336 to attack 360-370. The front month weekly gold chart needs to get over 330.
SPU7 - The sp should trade above 955 before Labor Day. Scale into sp puts when the market trades over 950 get aggressive above 955.

Yellow Jacket
(Fri Aug 22 1997 22:20)
Permanent Portfolio?
YAPLE: Sorry. While I understand derivatives, I haven't played them myself and don't know the trading houses. I'm sure others will help you out, so keep checking in.

(Fri Aug 22 1997 22:20)
Federal Reserve @ December 1913 -1997
The true purposes of the Federal Reserve Act soon began to disillusion
many who had at first believed in its claims. W.H. Allen wrote in
Moody's Magazine, 1916,

"The purpose of the Federal Reserve Act was to prevent concentration of
money in the New York banks by making it profitable for country bankers
to use their funds at home, but the movement of currency shows that the
New York banks gained from the interior in every month except December,
1915, since the Act went into effect.

The stabilization of rates has taken place in New York alone. In other
parts, high rates continue. The Act, which was to deprive Wall Street of
its funds for *speculation*, has really given the bulls and the bears
such a supply as they have never had before.

The truth is that far from having clogged the channel to Wall Street, as
Mr. Glass so confidently boasted, it actually has widened the old
channels and opened up two new ones.

The first of these leads directly to Washington and gives Wall Street a
string on all the surplus cash in the United States Treasury. Besides,
in the power to issue bank-note currency, it furnishes an inexhaustible
supply of credit money; the second channel leads to the great central
banks of Europe, whereby, through the sale of acceptances, virtually
guaranteed by the United States Government, Wall Street is granted
immunity from those foreign demands for GOLD which have precipitated
every great crisis in our history "

George Cole
(Fri Aug 22 1997 22:26)
market action
David: Your take on the markets is very close to my own. I agree there could be run to marginal new highs by the Dow and S&P 500 the next week or two, although the odds are against it. We do seem to have a made a minor double bottom just below 7700. But whether or no we make new highs, the increasing volatility and incredibly high valuations signal that a top is being formed and the secular trend gradually changing from bull to bear.

And gold looks to be in the very early stage of what promises to be a powerful secular bull market. But only the patient will reap the big rewards in gold equities.

(Fri Aug 22 1997 22:26)
gold funds
To add to your comment. Although the Dow seems to have recovered today, ALL gold funds went up except for two which are primarily natural resource based. Now if PDG would just get off its butt....

(Fri Aug 22 1997 22:51)
@Long Bond
Weekly long bond chart.

Don't be so quick to write this stock bull off. There were three concerted efforts today, using stock index futures, to push the major indexes up. Rightly, wrongly, or manipulated, or just the way it is, be careful when using index options, neophytes. They can ruin you in a heart beat! Witness todays action in the major indexes. Remember, "There is a risk of loss. You may lose part or all of your investment. ( ? ) " If you decide to use options, be aware of the risks involved. If you are buyer of puts or calls, the odds are automatically only one in three in your favor. Add to this the time premium/decay, and you had better be right in direction AND the time frame. O.K.,you've been warned. :- )

(Fri Aug 22 1997 22:52)
So, what's the deal with gold today?

(Fri Aug 22 1997 22:54)
Visitor -- What do you mean?

(Fri Aug 22 1997 23:00)
APH:......Thank you....... A very wise ( imo ) and successful trader once said, "my buy-stops are ALWAYS above the market" ( in strategic places ) . Do you concur??

(Fri Aug 22 1997 23:03)
Visitor -- A line chart of the price of gold;

(Fri Aug 22 1997 23:07)
Federal Reserve @ December 1913 -1997
From 1887 to 1914, this precarious system of heavily armed but bankrupt
European nations endured, while the United States continued to be a
debtor nation, borrowing money from abroad, but making few international
loans, because we did not have a central bank or "mobilization of credit"

In April 1887, the Quarterly Journal of Economics had pointed out:
" A detailed revue of the public debts of Europe shows interesr and
sinking fund payments of $5,343 million annually ( five and one-third
billion ) M. Neymarck's conclusion is much like Mr. Atkinson's. The
finances of Europe are so involved that the governments may ask whether
war, with all its terrible chances, is not preferable to the maintenance
of such a precarious and costly peace.

If the military preparations of Europe do not end in war, they may well
end in the bankruptcy of the States. Or, if such follies lead neither to
war nor to ruin, then they assuredly point to industrial and economic

*WW I* ( August 1914- November 1919 ) ( USofA entered the war April 06 1918 )

The bankers had been waiting since 1887 for the United States to enact
a central bank plan so that they could finance a European war among the
nations whom they had already bankrupted with armament and "defence"
programs. The most demanding funtion of the cenral bank mechanism is
war finance.

On October 13 1917, Woodrow Wilson made a major address, stating:
" It is manifestly imperative that there should be a complete mobil-
ization of the banking reserves of the United States. The burden and the
privilege ( of the Allied loans ) must be shared by every banking
institution in the country. I believe that cooperation on the part of the
banks is a patriotic duty at this time, and that membership in the
Federal Reserve System is a distinct and significant evidence of

(Fri Aug 22 1997 23:18)

(Fri Aug 22 1997 23:19)
Good night all..............

(Fri Aug 22 1997 23:22)
ALL: gcz7 open interest down 11K ( last few days ) to 109K ( while price rises ) ...Q: Are "they" dropping their shorts??

(Fri Aug 22 1997 23:29)
heard the Judge set the date for Big Bubba's 'pecker' trial. Heard also that ms. Jones said the 'distinguishing characteristic' was a tatoo. When she first saw it, it said "Shorty". As the episode progresed, it became, "Shorty's Truck Stop, Conway, Arkansas.": )

(Fri Aug 22 1997 23:37)
Stradmaster: Mooney's strategy entailed the SALE of a 1000 put for 30 points. At 850 spoos, he'd be in the hole $60k on the short put. It aint as good as he made it sound. Careful.

(Fri Aug 22 1997 23:54)
Soybeans poised for their first bull-run, in a while.
Silver will accompany this move.

"El-Nino~" 'approaches' .....