Gold Discussion for Investors and Market Analysts

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

(Thu Sep 04 1997 00:01)
Jin:Thanks for the e-mail as it made me feel better about selling some of my stock today!!!....The world is increasingly inter-related and Wall Street is not immune to "far-off" equity markets....Geff: Could be deja vu!

(Thu Sep 04 1997 00:04)
YOUR POSTat 23.06p.m was CORRECT!THE DOMIGO TEORY IS going to prove soon!
each asian countris had their own problems now!the politic,economiiii,the speculators,the stocks,the jobless people ( thai 100,ooo peoples lost jobs in bangkok ) ,the cambodia conflicts,.....somuch you just merntion it!bye..

(Thu Sep 04 1997 00:10)
AI home page Just when you think your technique is foolproof they come up with a better fool. In this case it is a machine which picks fund sectors better than the other kids on the block.

(Thu Sep 04 1997 00:11)
Ted @ 00:01
Ted selling stock - Oh dear ! Puetz made it happen eh! : ) : ) : )

(Thu Sep 04 1997 00:11)
Donald, r.e. your 18:57
I liked the referenced article. It got me to thinking.

I remember the Japan of the late 80s quite well. They were riding high - in both the well deserved arrogance of their business acumen and also its national pride. The entire country had adopted the concepts of "Total Quality Management" as preached to them by the U.S.s Mr. Demmings after WWII. Not only that, they had ( and still have ) a strategic economic unit - as an integral part of their government. This group was equivalent to the U.S.s CIA in that it gathered intelligence on all of their "economic enemies" and devised all sorts of strategies to take advantage of the weaknesses they perceived. Their recommendations were usually adopted by their prime minister . To this day, the Japanese still have allowed very little outside competition within their borders, only grudgingly giving ground when they felt it was expedient or prudent. Many, including myself, felt that the mid-to-late 80s time period was an economic equivalent of Pearl Harbor in many respects. They had earlier "obtained" key critical technologies/economic theories/know-how from the U.S. and used them to their advantage to gain advantage over her adversaries. Just a few examples: Fords mass production techniques, Demmings TQM, they outright bought the diode/transistor technology for pennies from the Americans ( Bell Labs - who discovered the secrets of silicon technology but were too stupid to realize the potential - "all itll ever be good for is experimenting and tinkering" ) , etc They then took many of these basic building blocks, coupled them with a unified national agenda, and within thirty years built a mighty beast of a financial, economic, and manufacturing giant. ( Thanks also in great part to her vow against militarism and the unwavering willingness of the Americans to fund Japans entire defense bill ) . The failure of Japan in the early ninties, I believe, had more do with two factors: 1 ) that they had never really seen world-wide macro-based economics at work first hand. ( They were, for the most part, affected very little during the depression of the 30s or the correction of 87 ) and 2 ) they were totally unprepared for the prosperity that overtook them so quickly in the late 80s. Like all the American stock speculators of the 20s, Japanese investors couldnt find enough ventures - good or bad - to put their money in. Then, when the realities of their being a major player of the world-wide economy hit them smack in the face - their products were not in as much demand ( due to global corrections/semi-recessions/etc. ) , speculations failed, P/E ratios didnt pan out, corruption and scandals reared their ugly heads, and the emperor died. the "bubble" began to burst in earnest. Maybe somewhat of an over generalization but Now the U.S. has come full circle - TQM seems to have payed off over the past decade ( thats somewhat questionable in my mind ) , the U.S. has adopted many of Japans little management quirks ( union busting, longer work hours/reduction-in-leisure, etc. ) , and GUESS WHAT? America is again the mighty financial, economic gorilla - with all its arrogance and national pride, the scandals, speculating "boomers", and another potential "bubble" in the making.

ALL: Will the U.S. repeat history? Any opinions out there in Kitcoland on THAT question???? Anyone? Anyone? Bueller? Anyone?

(Thu Sep 04 1997 00:13)
..... Maestro .....

Heard some good music this weekend, brought some pictures to mind.

O what brings
O these ten strings
by twenty fingers played

Garden misty path
I can still feel
The grass between my toes
Lonely sunlight filtered trees
Quiet stream softly by
Leant to my eye
The kindest caress

Blinding beckoning Bach
Swarms purest white
Shot with reds and yellows
Liquid warm water brown
I could but drown
O these ten strings
by twenty fingers played

(Thu Sep 04 1997 00:13)
Asia Stock Market ( Hong Kong -397.65, Japan -98.41, Taiwan -319.80 And Malaysia -47.12, -6.28% ) S&P500 -75, NSDQ100 -400.
Thanks Ted for your comment.

(Thu Sep 04 1997 00:14)
Jin: Thanks for the compliment!...No one ( especially my teachers ) ever told me I was absolutly right about ANYTHING...hahaha....but what do they know???....Happy trading.......

(Thu Sep 04 1997 00:16)
LurkingGbug has such wits
The gold market's giving him fits
He called for gold's fall,
But failed to play it at all,
So now he is saying "Oh Shitz!"

(Thu Sep 04 1997 00:16)
@ 6Pak
Hi dude!..Yeah, Puetz and the rest of you radicals must be gettin ta me.......and now Jin!...but am still stayin with my DRIPS.....

(Thu Sep 04 1997 00:17)
Lurkin Gold bug as to your rosy US economic analysis ( unemployment is actually over 12% if we calculated like Germany ) REMEMBER WE ARE NOW IN A GLOBAL ECONOMY PS which includes Asia and So. America. Nuf said!!!

(Thu Sep 04 1997 00:18)
The coming crash
LGB: Ref. Historical patterns. The coming crash is not going to be anything like any previous US crashes.

1. In 1929 US had a real, productive economy. The crash was caused by idiotic money supply manipulation ( See Alan Greenspan "Gold And Economic Freedom." ) Now US economy is only maintained by desire of other countries ( for their own reasons ) to keep it alive. Once these reasons run their course, it is over. How will the "economic indicators" tell you when the foreign countries decide to stop subsidizing the US nonsense? After all, one does not need US to piss away money -- one can build the military instead.

2. LGB: The guy who told you things were going to hell in the 70's was right, in a sense. They would have gone to hell if the classical economy ( sense ) was still at work and people were willing to fix problems rather than sweeping them under a rug. Instead, the governments decided to build this current nonsense and keep it alive at all cost. As a result, almost all productive capacity of the country was dismantled; All US top politicians have a peanut for a brain. See Bob Woodward's "Agenda" Clinton quote: "You mean to tell me my presidency depends on some bond traders?!" So, in a sense your guru was right. The things did go to hell. Only the appearances were built up to pretend that they did not.

3. All this nonsense might have worked for the older generations, we will call them here the TOFs ( The Old Farts ) . TOFs were pretty much paid to stay quiet while everything was falling apart: "Who cares about the future as long as I have my false teeth for someone else's money!" or "as long as the government rips off my kids and buys me an RV."

4. TOFs were getting their phony Social Security money so they could buy their phony stocks. Ooooohhhh! The future is so bright. The only problem is that ( according even to Congressional Budget Office ) , the generation born today will face the effective tax of 80 to 95% throughout their life. Knock! Knock! This is just not possible. This is a recipe for a civil war.

5. Tell me, LGB, Who will pay for your Social Security and buy your overpriced stocks from you? Bevis and Butthead with their McDonalds's minimum wage? We have "Service Economy" here, remember?

6. US ( as far as the younger generations are concerned ) is quickly becoming a third world country. While a postal clerk from a generation ago could afford a comfortable life and a family, today it is possible only for selected top professions. While it might be a pleasant life to be in these selected few professions ( mine is definitively one of them ) , it would be stupid not to see what is happening around me.

7. Yes, the game can be played a little longer, if the foreign countries are willing to continue to play along, but do not be surprised if, in a couple of years, you will have to fight Bevis and Butthead over a last scrap of a roasted rat to eat. Enjoy!!! I will put my money on Butthead.

(Thu Sep 04 1997 00:19)
I'm surprised I didn't see more excitement and speculation on Ted's
announcement that he sold a stock! I think this should be considered
a major indicator of the market's future direction ( one way or the
other ) . It should rank way up there, among things like interest rate
increases, etc. P.S. Ted - I finally found Cape Breton on the map. I
don't understand how it can be so difficult to paddle out to Scatterie
Island. It is no more than 1/4 inch away from your house -- max.

Go Platinum!! Interesting that the $6 jump looks like it came from Hong
Kong. I'm curious. Is this is result of HK speculators, or can it reflect
real demand from mainland China? Anyone know how individuals in PRC buy
platinum ( jewelry, etc. ) ?

Last, I just half-listened to a couple of experts on CNN explain how
individual investors can now participate by investing in S&P Index
vehicles. Does this smack of promotion to aid distribution from
bigs guys to little guys? Have others noticed an increase in this
type of promotion? I've heard that shorting gold is now being promoted
at the individual retail level. Would appreciate your feedback.

(Thu Sep 04 1997 00:22)
@RJ+ Stalder
RJ: That sounded nice.....Stalder: you are quite welcome!...I'm burnt as it's 1:22 AM here on the "far East" coast of North America...Malaysia: 12+% in less than two days.....whoa Nelly!

Strad Master
(Thu Sep 04 1997 00:26)
RJ: What a lovely poem!!! I just opened up Kitco and found your post right at the top. I've never gotten such a poetic review! I'm printing it out as it's a keeper. Many thanks. You're in the wrong business, messing with metals. So mundane and earthbound compared to the fantastic flights of artistry that you conjure from your typewriter with such ease. Glad you were there and liked the concert. It was a pleasure getting to meet you, too. ( Actually its four strings and four fingers - but who's counting. :- ) ) Thanks again!

(Thu Sep 04 1997 00:28)
Hey Bevis..uh..huh..huh..huhhh
"I saw my name on Kitco...huh, huh, ...uh..."

Beavis: "Yeah..heh, heh... Me too!!!"

Butthead: "Hey, you fartknocker, they didn't say Beavis, they sais "Rat"

Beavis: "Oh...yeah...anyway, that was pretty cool..."

Butthead: "Problee... Now let's paly some RAT BASEBALL!!!!"

(Thu Sep 04 1997 00:29)

(Thu Sep 04 1997 00:29)
@ DJ +Good night all!
Hi DJ! That quarter inch from Scaterie Island is NOT where I live as I live on the opposite side of Mira Bay ( 8+ miles to SCaterie Island ) ...That piece of land you are lookin at is called the hamlet of Main-a-Dieu...
Re- the Ted indicator....yeah,it probably means somethin....somethin like FRO will probably soar like an eagle ......Asia is gettin me nervous!

(Thu Sep 04 1997 00:32)
LurkingGbug @22:15
For twelve months the growth in nominal
gross domestic product has been 6.2
percent and, thanks to a Consumer
Price Index that averaged exactly 0.0
percent, the real gross domestic
product also grew 6.2 percent.
Industrial output soared, up a whopping
11.5 percent during the last four
quarters, yet did not set off inflation.
With unemployment down to 3.8
percent, the prime rate steady at a
relatively modest 5.8 percent ( and is
not likely to rise as long as inflation
stays so low ) . The budget deficit is
vanishing on its own and there may
even be a surplus. You may think
you've heard all those tantalizing
numbers again and again in the last few
weeks, but they're not what you think.

Those statistics are from September,
1929, when the stock market was on
the verge of a devastating crash. The
subsequent bear market took 25 years
to recover.

(Thu Sep 04 1997 00:32)
Gunrunner--I agree with your general assesment of Japan in the late eighties. During my senior final semester in college ( 1985 ) I had the pleasure of taking a management class taught by a visiting proffessor from Japan. The man was brilliant. I still remember the main points of his thesis. But I will never forget one day when he was feeling especially patriotic. He said "You beat us in WWII, but now ( as he took out his wallet and held it up ) we are beating you where it really hurts".

I could not disagree.

What is scary is that we are now in the ecomonic spotlight with our Pols acting arrogent at international meetings, in effect taunting others with less "Robust" economies.

My ongoing theme tonight: Deja Vu all over again.

(Thu Sep 04 1997 00:33)
Great Comments Petronius/ It shows the neo financial conservatives for what they are SOCIALISTS. They are socialists in the sense of the govt or govts pulling every string to keep the financial bubble growing and their wealth growing while the taxpayer becomes more at risk and SS and Medi trust funds are raided to keep financial ponzi going. They call them selves conservatives as they want to beat up on the welfare recipients and SS recipients. Nothing is said of the cost to the taxpayer of corporate restructuring which is a form of economic violence which hurts society and the taxpayer and the family as it helps profits and stock prices.

SS and MEDI will be paid one way or another or the present political establishment will be finished.


(Thu Sep 04 1997 00:36)
RJ can't touch that!
Can't compete with Beavis & Butthead.... hmmmmm, Those two sound a lot like Puetz the anal-cyst and LGB ( AKA, Hep-Cat-Rat Turdknocker ) jousting about the Kitco internet-electron-ether.... ;- )

(Thu Sep 04 1997 00:40)
Boo boop de doop - Betty Boop before the crash of 29

Uhhh Hu uuu Uh Uhhu Hu - Beavis before the crash 98

(Thu Sep 04 1997 00:43)
@free advice

Those sp puts are kinda pricey. Which are you buying and what are you

paying? I bought some cheap dec corn calls recently. Did I waste my $?

Are you friendly to wheat and sbeans? thanx

(Thu Sep 04 1997 00:46)

Ok Had lots-o-inquiries about the Canadian Mounty, so..

The one ounce coin will be struck with a $310 US Dollar face value, and the RCM will guarantee to buy it back at face value within 3 years. They will hedge all gold sold with shorts at $310. I know this sounds strange, but gold and oil are traded in dollars, and that is what the RCM will strike. I'll have them in a couple weeks, by end of month at the latest.

To correct an earlier statement, my company will not be the exclusive source of this coin. Others like Blanchard will have it. No word yet on the premium.

(Thu Sep 04 1997 00:48)
In days of old
when gold was sold
an the stock market wasn't invented
They placed their bets
on tulip sets
and went away contented

Strad Master
(Thu Sep 04 1997 00:56)
Pricey Puts!
PUETZ & JMARK: I was just going to ask a similar question. Before everyone goes to bed, I'm curious as to what one of those famous S&P puts would cost right about now? Is there anything reasonable to be had around $500 apiece? ( The price of a lottery ticket! )

(Thu Sep 04 1997 01:02)
Strad: Look at the OAX Leaps which are 10% of the sp 100. You can get good price and buy some time. Steer clear of Futures options on the SP they are pricey and have a big spread ie you will get screwed buying and selling. The Oax options can be purchased through any Brokerage acct. I would recommend Waterhouse Securities. Good Luck!!

(Thu Sep 04 1997 01:03)
@big island
RJ; Weight, purity, composition, of the mounty is ?

(Thu Sep 04 1997 01:16)
..... Mounty .....
The Mounty is a one ounce .9999 gold coin. Haven't seen one yet, but I imagine there is a Mounty on it.

(Thu Sep 04 1997 01:18)
Job Killer @ Weak Canadian Dollar
September 3, 1997
Weak dollar masks job dangers, economist warns

TORONTO ( CP ) - A weak dollar credited with keeping Canadian manufacturers booming in recent years is actually a job killer in disguise, a new study warns.

The falling value of the loonie since free trade was negotiated in the late 1980s has masked the lack of productivity improvements needed to keep competitive, CIBC Wood Gundy says in a report released Wednesday.

That leaves Canadian manufacturers and their 2.2 million employees wide open to more job-rocking shocks, said Jeff Rubin, the investment dealer's chief economist.

"The sector is as vulnerable as it was in 1988, even more vulnerable," he added.

(Thu Sep 04 1997 01:28)

Just dropped in quickly to check the posts :

M Sheller, Front, Miro et al : Thanks for the educational discussion on digital photography. Front - nice picture posted by your goodself, but I would have preferred one which featured the Frontman himself.

Bob : re your 20:15 post - IMO, Hong Kong has the closest thing to a true free market economy in the world. Virtually anybody can get rich here, you don't need family/political connections just ingenuity and hard work. Whether it stays that way is the question. Regarding the gold price, the direction of international capital flows is still predominantly towards the US dollar and dollar denominated instruments. Gold won't rally significantly until this changes as GS Cole has pointed out.

LGB : re your 22:15 - the stock market needs a healthy correction now or it will crash next year. We have high inflation ( M3 growth of 9.1% ) , a volatile dollar xchge rate, and consumer confidence has peaked. The US economy is in reasonable shape relative to other world economies, but this is probably about as good as it gets for the US. Your comment on the money coming into the market from MFs is basically the greater fool theory - as long as there is always a greater fool to buy your shares, then the market can continue upwards. You don't want to be at the end of the line when all the fools have already bought.


(Thu Sep 04 1997 01:33)
Sewer Rat @ Racist Narrow-Minded Sewer Rat
Wednesday, September 3, 1997
Howard Stern sends 'shock' waves through Quebec

Duceppe said in Montreal.
He said holocaust denier Ernst Zundel of Toronto was prosecuted for "the same type of words" against Jews as Stern is using against Quebecers.

(Thu Sep 04 1997 01:34)
..... Strad .....

Violin 4 + guitar 6 = 10 strings. You + the other guy ( Jim? ) - ( any amputations ) = 20 fingers. That was the idea anyway. Kinda' has the base ten thing going for it. Glad you liked it. I enjoyed the playing immensely. Thanks....

Strad Master
(Thu Sep 04 1997 01:41)
My head hung in shame!
RJ: How dreadfully crass of me to leave the guitar out of the calculations!!!! Mea Culpa 1000 times!!!! ( Still, I don't count our left hand thumbs - but that truly is picking the nit! )

(Thu Sep 04 1997 01:42)

WW--Thanks for the heads up on OAX. I will check those out. Also, any thoughts on Homestake Calls expiring in Jan 98?

(Thu Sep 04 1997 02:02)
Off to bed

One more thing--I think JIN has it right.

(Thu Sep 04 1997 02:13)
REALLY going to sleep

Rate increase in Germany? I wonder what effect THAT would have on stocks. Check this story out; Dollar looking WEAK against D-Mark.

(Thu Sep 04 1997 02:31)
Stern @ Anglo-French wars (1689-1713;1745-63)
The Treaty of Utrecht ( 1713 ) sounded a first note of crisis-warning. The
surrender to the British of Acadia ( except for Cape Breton ) and of the
Hudson Bay posts that Iberville had taken was a step towards the
dismemberment of New France.

The acceptance of a British "protectorate" over the Iroquois and their
territory, far inland from the English settlements threatened to sever Louisiana from Canada.

The rulers of New France reacted to the decisions taken at Utrecht by
setting out to nullify as far as possible their negative effects. To the
southwest, on the Ohio and the Illinois, the French constructed a chain
of forts; they strengthened their position on the lower Mississippi with
the founding of New Orleans ( 1718 ) ; and at the other end of a great arc
of empire, on Cape Breton ( Ile Royale ) they started the building of a
massive fortress; Louisbourg.

Thus the French answered Utrecht and its threats of ultimate dismember-
ment by seeking to sever the arteries of their rivals' Hudson Bay trade,
and to outflank and encircle the Atlantic seaboard colonies.

Soooooooooo, the French and English question in Canada has a very, very
long History. Stern ( Mr. USofA ) has been paid very well to raise the
long ago issue. Is this not the way to divide and conquer a nation.
What purpose, will be served by Stern, and his comments. EH!

Who Cares
(Thu Sep 04 1997 02:33)
Mexican Bailout

John - Well, as much as I tried, I can't find the reference. Dang
it, I posted several months ago, but the Internet ate it. Can't
find it anywhere.

However, I can point you in a direction. The same week I read the
Whalen piece, Jimmie Rodgers was on CNBC, being interviewed by
( I believe ) Sue Herrera? Verbatim from my memory,

SH: "Well, that's good news about Mexico paying the loan back earlier"

JR: "I TOLD you. It's government LIES. I get so SICK of these
of these government LIES". : )

I tell you, Rodgers gained many adherents THAT day. : )

There was some more, but THAT exchange stuck in my memory. I was
quite shocked that the TV Oligarchy would allow comments like that
for the viewing public. : )

I half-expected Rodgers to turn up dead the next week. : )

Let's see, it would have been, damn. It would have been, probably,
sometime between Dec. '96 and March '97. It followed very closely
on the "announcement" that Mexico had "paid off" the loan. At
the time, I had a newspaper with BOTH articles in it - Mexico
pays off loan, U.S. extends equal amount to IMF/World Bank. : )

Re: Maps - I realize my mistake. Putting my trust in COUNTRY
BUMPKINS. : ) People in PotatoLand have rarely seen or dealt
with the gen-u-wine Big City sociopath. : ) I have a brother
who is a sociopath. He respects my .45 only. I am intimately
familiar with their behavior. Country bumpkins are not. : )

Who Cares
(Thu Sep 04 1997 02:41)
Hegemonic Reversal

So. Others post support for the "Hegemonic reversal" theory. : )

Manufacturing to Japan. Ergo, finance to Japan. Ergo, bubble
and blowout. Japan bones it by propping up system and endorsing
inefficiencies, fails to follow through on commitments to
hegemonic power...

Manufacturing to back to U.S. Finance to back to U.S. Ergo, bubble
and blowout. : )

I like the idea. It would explain a lot about the last ten years.
I'm surprised I haven't seen James Davidson broach it.

(Thu Sep 04 1997 03:12)
The poem at 00:16 was not mine. Some imposter is posting under my name.

Who Cares
(Thu Sep 04 1997 03:13)
Gold & Balance Sheets

I've been pondering this idea for a couple of weeks now. Gold.
Balance sheets. Gold. Balance sheets. The General says we
should shift our paradigms of thinking to accomodate the future.

Well, General, I been trying to do exactly that for seven years.
Trying to fracture my old mindset, and to the extent that I upset
Mooney with "contextual" postings, I think I can claim success. : )

I've got two models. Old model - gold, homogenously distributed
throughout the economy. A speck in every balance sheet. The
model for pre-1900s. A true free market, no gold buyer or seller
able to influence the price of gold.

New Model - Rutherford's model of the atom - raisin pudding. In
reality, gold is now oligopolically distributed, i.e. it only
exists in a few places, in large concentrations. By definition,
this allows CBs to manipulate gold prices, be it conscious
manipulation or not.

I keep thinking that Roosevelt's confiscation of gold *could*
represent an INCREASE in oligopolic government power. By controlling
substitutes, governments force additional value into paper.

So. What does the "forward selling" of CB gold represent? It
seems to me that this must represent a DECREASE in oligopolic
power. After all, aren't the CBs FACILITATING the re-distribution
of gold back into balance sheets?

I can only think that this leads to two outcomes - #1 - CBs stop
forward selling to preserve their oligopolic power, i.e. they
keep the value of gold down. Or, #2 - they continue, undermining
their ability to control and enforce the value of paper. Ergo,
gold rises.

I like this idea because it runs contrary to some of the views
that CB dumping of gold will depress gold prices. If anything,
it seems to me that it will RAISE gold prices and reduce paper
prices. Something to ponder maybe.

Who Cares
(Thu Sep 04 1997 03:16)
The Puetz Poser :)

Come on, Puetz. It's a sign of flattery to be imitated. : )

I believe that your prediction of a crash is probably of reasonable
high probability. I also believe that Greenspan will once again
spoil your chance to enjoy it. : ) A crash that *would* have been,
nipped in the bud and deferred until Y2K. : )

(Thu Sep 04 1997 03:24)
If you're betting on a 50% stock market crash ( like 1929 ) , then the DJIA will fall to 4150 before the end of October, and the S%P 500 will drop to 480. Hence, any puts with a strike price above 600 are a good bet. Of course, the lower the strike price, the greater the risk, but the cost is less also.

For example, on the Small S&P 500 options, a December 600 put costs about 1/2 per option, or $50 per contract. If the S&P falls to 480, each option would be worth 120, or $12,000 per contract.

A December 850 put has less risk. It would pay back with a bear market -- a crash wouldn't be necessary. But, if the S&P did crash to 480, its current cost of around 18 ( $1,800 per contract ) would increase to 370 ( $37,000 per contract ) .

Depending on the risk you want to take, anything between a 600 put and an 850 put would be OK. You should only use money you can afford to lose.

George Cole
(Thu Sep 04 1997 03:32)
spin doctors
JIN: The spin doctors now are using Asia's problems as a rationale to buy U.S. stocks. VERY SHORTSITED in my judgement, but this type of thinking probably played a big role in Tuesday's strong rally.

U.S. stocks seen benefiting from Asia turmoil -WSJ

NEW YORK, Sept 4 ( Reuter ) - U.S. stock markets could gain more than they lose as a result of the recent upheaval in Asian
markets, the Wall Street Journal reported in its 'Heard on the Street' column, citing international stock strategists.

The paper said in its electronic edition Thursday that companies buying goods or parts assembled in Southeast Asia will pay
lower prices as a result of weak Asian currencies, which led to uncertainty in Asian stocks.

Companies like Compaq Computer ( CPQ ) and Wal-Mart Stores ( WMT ) are among those that would pay lower prices, the paper

The paper also said that as a result of the Asian market turmoil, U.S. stocks and bonds could also benefit as capital is shifted
from Asia to the U.S.

Who Cares
(Thu Sep 04 1997 03:38)
Puts from Puetz

Only use money I can afford to lose? Dang, I already done did that,
my cash is burned to the ground in the past twelve months. I got
a Visa card, though. : )

(Thu Sep 04 1997 03:55)
aide to Senator Blutarski (Retired)

Re:El Nino. Here in No. California, we are experiencing dramatic changes in our climate.To those who posted links, ( Steve Perth, Auric ) they are very much appreciated!
Ying Ying

(Thu Sep 04 1997 04:32)

I highly respect your opinions and research, that there will be big problems ahead seems obvious.
It seems that the dollars that were to invested in Asian projects were quietly pocketed and now that the manure hit the fan the money is finding its way back.
The bankrupt Asian firms will be picked up by big US and European interests for a song at taxpayers expense, this will create new low wage jobs at the expense of European and North American labor.
This shifting of success and failure always tends to create temporary power centers and in my opinion it's why paper currencies are winning the game.
If I were in charge of an Asian country, I would prosecute nationals who are buying here, then buy gold with the confiscated money. Sound harsh? Then I would delink from the dollar. It the only way.

Who Cares
(Thu Sep 04 1997 04:48)
AH!!! Mexican Bailout - Found the Shill Game :)

John, Donald - I found it. It *was* Whalen, and it was back
in Feb. 96. Note the second URL. It specifically mentions
the IMF loan to Mexico to the tune of $1.6B, at the same time
that Mexico "pays back" $1.3B to the U.S.

Gad. It must have been going on for quite awhile. I'm pretty
darn sure that I first heard of the IMF/Mexico/U.S. Shill game
early this year, in a different article.

(Thu Sep 04 1997 05:11)

World Bank chief apprehensive about any
Japanese ODA cut
WASHINGTON D.C. ( Nikkei ) - World Bank Governor James D.
Wolfensohn on Wednesday expressed concern about a possible drop in
Japanese contributions to the international lender, hoping Japan would
cut official development assistance ( ODA ) as little as possible.

Japan is expected to reduce ODA funding in its fiscal 1998 budget by
10% from the previous year.

The World Bank chief is likely to visit Prime Minister Ryutaro
Hashimoto in mid-September to discuss Japan's support of the
Washington-based organization. Japan contributed 19.5 billion yen to
the World Bank in fiscal 1997, about 40% of all its contributions to
international lenders.

Wolfensohn stressed Japan is receiving great benefits from economic
growth in developing countries. Much of Japan's funding has been
funneled into feasibility studies on World Bank-led projects in
developing economies, which have helped push Japan's participation in
such plans, he noted.

Regarding recent turbulence in Southeast Asian currency and stock
markets, he said the widespread trouble is unreasonable because
Thailand's economic fundamentals, for example, differ from other
countries in the region. He added he is personally optimistic about the
future of Southeast Asia.

Who Cares
(Thu Sep 04 1997 05:19)
Japan spins Whirled Bank

Heh heh. Japan getting clear of World Bank before new Mexican
bailout? : ) History will curse our stupidity. : ) Wait, maybe
if Japan invests in the World Bank, and they whirl it the cash
around in Asia fast enough, it will generate enough cash inflows
from Malaysia and Korea, who can then "invest" in Mexico, thus
boosting more production in goods that nobody can afford. : )

I'm *definitely* going to get started on the second job and get
this house paid down. : )

(Thu Sep 04 1997 05:20)


1st September 1997

The BIS is releasing today its regular quarterly commentary and statistics
on recent "International Banking and Financial Market Developments".
The report notes a continuing high level of activity in the second quarter
of 1997, supported by an accommodating monetary stance in the major
economies and subdued inflation. However, currency and country risk
factors were given greater consideration in the wake of the financial
turbulence observed in certain Eastern European and Asian countries,
and also owing to the uncertainty surrounding the introduction of the
single European currency.

Total announcements of international syndicated loans reached a new
record. While a number of borrowers succeeded in obtaining terms that
were considered to have tested the limits of lenders' tolerance, there was
evidence of growing resistance among intermediaries to a further erosion
of margins. Detailed international banking statistics for the first quarter
also show a strong recovery in interbank business in the wake of
renewed currency and bond market volatility, as well as a sharp swing
from net borrowing to depositing by bank customers.

New issuance of international securities showed no signs of abating in the
second quarter of 1997. Changes in market sentiment were reflected in a
movement away from "core" continental European currencies and
towards the US dollar, reflecting large interest rate differentials and
renewed concerns with respect to the implementation of European
economic and monetary union. These factors seem to have offset the
unwinding of long dollar positions associated with the abrupt
strengthening of the yen in May and the impact of financial turbulence in
some emerging market countries. Moreover, while local economic
fundamentals seem to have played a greater role in investment strategies,
investors' ongoing search for higher yields prompted the market to test
new classes of instruments and signatures. Finally, although renewed
volatility in foreign exchange and equity markets since the beginning of
the year reduced interest in certain structured products ( such as
dual-currency bonds ) , it revived demand for hedging instruments. Thus,
in spite of a moderation in the growth of exchange-traded derivative
contracts, partial data available in the United States suggest continuing
strong demand for over-the-counter derivative products, with reports
that end-users and smaller financial institutions are returning to derivatives

There is now broad recognition that the rapid transformation of the
global financial industry increases the potential for systemic problems to
spread beyond national borders. A number of documents and statements
addressing such issues were released in the period under review.
Another important area of consideration was the impact of the
forthcoming introduction of the single European currency, which raises
numerous questions, including the determination of euro-based
benchmark interest rates, adjustments in market practices and
conventions and legal uncertainties. These issues are discussed in various
sections of the commentary, which also includes an appendix dealing
with the impact of the single European currency on competition in the
international primary debt market.

Who Cares
(Thu Sep 04 1997 05:21)
Japan spins Whirled Bank

Heh heh. Japan getting clear of World Bank before new Mexican
bailout? : ) History will curse our stupidity. : ) Wait, maybe
if Japan invests in the World Bank, and they whirl it the cash
around in Asia fast enough, it will generate enough cash inflows
from Malaysia and Korea, who can then "invest" in Mexico, thus
boosting more production in goods that nobody can afford. : )

I'm *definitely* going to get started on the second job and get
this house paid down. : )

(Thu Sep 04 1997 05:26)
Dollar Rises as Japan's Economic Woes Outweigh Trade Concern

The dollar rose against the yen, as traders said they were more concerned about Japan's weak
economic recovery than the nation's expanding trade surplus. Given the fragile recovery, there's little
prospect that the Bank of Japan will raise its discount rate from an all-time low of 0.5 percent,
traders said. The rate has been kept at that level for almost two years. That helps the dollar by
making yen-denominated deposits less attractive to investors. The dollar reached 121.43 yen and
was recently quoted at 120.90, up from 120.82 in late New York trading yesterday. It was quoted
at 1.8167 marks, compared with 1.8194 in New York.

Who Cares
(Thu Sep 04 1997 05:30)
I often wonder...

One of the big differences that I could find between post-Civil War
and Great Depression was free trade policies. I can't help wondering
if the previous pursuit of "Free Trade" in the late 1800s contributed
to the protectionist climate of 1929, just as the Smoot-Hawley act
[reys upon the minds of "free traders" today. Flip. Flop. Flip.

We've already seen 91-94, and you *might* be able to characterize
it as a mini-depression. What if "free trade" in late 1800s
produced TWO smaller depressions ( peak of 20% unemployment ) , and
"protectionism" produced one BIG depression?

Perhaps we might be looking at only one more smaller 91-94-type
recession? I kind of doubt it.

Who Cares
(Thu Sep 04 1997 05:30)
I often wonder...

One of the big differences that I could find between post-Civil War
and Great Depression was free trade policies. I can't help wondering
if the previous pursuit of "Free Trade" in the late 1800s contributed
to the protectionist climate of 1929, just as the Smoot-Hawley act
[reys upon the minds of "free traders" today. Flip. Flop. Flip.

We've already seen 91-94, and you *might* be able to characterize
it as a mini-depression. What if "free trade" in late 1800s
produced TWO smaller depressions ( peak of 20% unemployment ) , and
"protectionism" produced one BIG depression?

Perhaps we might be looking at only one more smaller 91-94-type
recession? I kind of doubt it.

(Thu Sep 04 1997 05:33)
Indonesia help wanted ad: "Dipsters wanted. No experience necessary"

(Thu Sep 04 1997 05:38)
South East Asia

(Thu Sep 04 1997 05:38)
6pak: Re Howard Stern, have always thot he was a dingbat and many Quebeccers will now agree with me. Obviously just trying for attention and I hope the man falls on his face in Canada. He should have in the U. S. in my book.

(Thu Sep 04 1997 05:39)
Malaysia issues warning to speculators.

Who Cares
(Thu Sep 04 1997 05:41)
Interest Rate function

This dang site. It's double-posting on me. : ) I am NOT alcohol
impaired this morning. : )

Interest rate function - K = x * y, where K is some unknown
constant, x = total debt load, y = average interest rate.

As long as the Powers That Be can continuously drive interest
rates down, ever-increasing debt can be sustained. The failure
point of this model is the "limits of lender tolerance", as referred
to in BIS posting, Donald. : )

Actually, I think that if the Powers That Be could keep stock
yields below the rate of real growth, the whole creaking house
of cards could be sustained indefinitely, too. As long as paper
holders are willing to accept less than the increase in total
growth, balance sheets recover over time. Do ya think the
boomers will accept a yield of .0035%? : )

I'm in a good mood this morning. My students did an outstanding
job on their programming projects. And I mailed out a resume where
I listed my "duties and responsibilities" as "dodging death threats
and buying kevlar vests". : ) I have positive balance this morning. : )

Go, Clinton. : ) Go, Greenspan. Go, bumpkins!

(Thu Sep 04 1997 05:45)
Asian chaos has major impact on British companies.

(Thu Sep 04 1997 05:49)
Japan is only paying 0.5% to borrow now. How much lower can they go? In the 30's the US T-bill rate got down to 0.25%. Because the banks were weak and so many had lost money in failed banks, money flooded into Treasuries for safety, not for the interest rate.

Who Cares
(Thu Sep 04 1997 05:49)

Donald: Malaysia scraps foreign purchase restrictions

Me: Greenspan

Donald: BIS says "lenders pissed"

Me: Greenspan!

Donald: British domino effect from Asia

Me: Greenspan, Greenspan!

Donald: Nuclear holocaust in China

Me: Greenspan! : ) No crash. No crash. No crash.

Nom yo ho, renga Greenspan ho.
Nom yo ho, renga Greenspan ho. : )

Who Cares
(Thu Sep 04 1997 05:54)
How LOW can we GO!

Donald - Well, believe it or not, I DO have a serious answer.

What is the AVERAGE interest rate being paid on ALL Japanese
debt? There's your answer. If you tell me that ALL japanese
debt has been refinanced at .5%, then I'll come up with something
else. After all, it's an hyperbolic function. We can approach
0% interest rate infinitely. : ) Heck, I can use that in my class
next quarter, it might get a laugh.

And. At what rate are the Japanese piling up new debt? If it's
below the rate of real growth, which appears to be just around
zero now in Japan : ) , it can sustained indefinitely.

That's one area that most people fail to realize about the Federal
Debt. There's no reason that it must be paid back, it can be
indefinitely sustained, as long as new debt incurred remains
below real growth.

I'll admit, Greenspan is doing a pretty wild handstand on the
asymptote. : )

Who Cares
(Thu Sep 04 1997 05:57)
Ray Dhalio

There's an article by Ray Dhalio that is a MUST read for Gloom and
Doomers. As near as I can figure, the real reason that the United
States finally came out of the Depression was that a large amount
of money went into war bonds which yielded substantially LESS than
the real rate of growth. Dhalio did a GREAT graph in Barron's
in Oct. '93 that made ME a believer in long-wave cycles.

(Thu Sep 04 1997 05:59)
Update on derivatives accounting standards. ( Greenspan and banks are opposed to these standards )

Who Cares
(Thu Sep 04 1997 06:04)
Greenspan, my Best Man

I won't bet against Greenspan again. That bastard has already
burned me twice. ; ) He's got way, way more computing power than
I do. : )

I gotta get some sleep. My students are already wondering about
me. They asked me some dang technical question tonight, and I
answered, "My foreskin was shorn on the shores of Lake Ozzie
Ozborne. And I am Techno-bot".

(Thu Sep 04 1997 06:05)
WHOCARES: I am sure that many business borrowers pay much more in Japan. But the big guys do what has earned the nickname "Yen Carry Trade" They borrow yen at low rates, convert to dollars, then buy US Treasuries at 6.6% ( yesterday rate ) Using leverage it is a nice racket.

Who Cares
(Thu Sep 04 1997 06:06)
Derivatives Standards

If Greenspan is opposed to them, it means they increase risk and
unpredictability. ; ) Man. I used to think Clinton was Stephen's
puppet, but now I'm wondering if Alan is the puppet-master. : )

(Thu Sep 04 1997 06:13)
WHO CARES: Ray Dalio is a good man. Also Joe Quinn who works in his office. They did a lot of long wave stuff on Monetary Base, M2, ratio. It made a lot of sense but got out of whack when the Iron Curtain came down. So much cash is floating around the world, estimated 233 billion in currency, that you can't trust the numbers anymore to do domestic analytical work about the money supply.

(Thu Sep 04 1997 06:20)
Indonesia help wanted ad: "Dipsters wanted. No experience necessary"
Mr. Donald
We're on the job. We've been dipping in SE Asia for the last few weeks. We will continue on dipping here, and South America. We're very vigilant and ready for the US, where we feel our members of the Dipster Moron Club of Investment, ( whose membership is growing daily ) will have great dipping opportunities in the coming months. Our 'invitation only' drive last week resulted in the smash buy up this past Tuesday and our new members are so thrilled to have had an opportunity to buy at these Dow low levels.
By the time we're fininshed dipping, we will be in deep---

LurkingGbug we've still not received your answer.

(Thu Sep 04 1997 06:25)
Deflation is on the way.

Mike Sheller
(Thu Sep 04 1997 06:29)
Good Morning all...
TED: ( 00:16 ) "Still stayin' with my DRIPS" Does that mean you won't be leaving us at Kitco anytime soon? RJ: Mountie sounds too good to be true. Probably will be an UGLY coin. WW:: If we count only truly meaningful work befitting an advanced civilization, unemployment is actually at around 43%. RON: ( Wed., 21:10 ) Very wise.

(Thu Sep 04 1997 06:35)

Donald--I am trying to figure out how the US Doller
fits in to all this. What do you make of the rise
in M2, M3? Also, thanks for your contributions here.

(Thu Sep 04 1997 06:38)


(Thu Sep 04 1997 06:38)
George cole,
thanks for another alternative ideas.very good points!
ted,check mail.......another tired day........have to go for a drink

(Thu Sep 04 1997 06:50)
From the WSJ interactive

Mutual Funds Rely On Credit Lines

Mutual-fund managers, scrambling to be more
fully invested in stocks, increasingly have been relying
on bank credit lines as a way to maintain relatively low cash
positions. In the past year, stock mutual funds have
lined up as much as $20 billion of credit lines to meet investor redemptions -- more than twice the amount that was in place a
year ago, according to several bankers.
Many funds have lined up new credit lines. Some fund firms, including First Union's Evergreen Funds group and Citibank's
Landmark Funds, have increased existing credit lines during the same period. Overall, mutual funds are setting up these
borrowing facilities at a faster pace than they are adding assets.

(Thu Sep 04 1997 06:51)
S&P500 -40, NSDQ100 -590
US Dollar- Mark even, Yen -.20 @120.62
Japan Stock down last night ( -120.11 ) and the the Dollar falling against the Yen is good news. Unless Mr.Cole is right about money comming out of Asia into the US Stocks. Money has to go somewhere and with Gold falling in London Market again I guess I'll have to wait and see.

Mike Sheller
(Thu Sep 04 1997 07:05)
Money - they're giving it away
AURIC: The increasing rise in the greater monetary aggregates is consistent with the approach of maturation in every boom cycle. The momentum of the recovery, expansion of activity, etc, begins to require more and more dollars to feed the boom without a significant rise in interest rates. This accommodation has been provided. At some point the accommodation must be withdrawn, or restrained, else there is a runaway boom. That does not necessarily mean prosperity, but it does mean uneconomic investment in areas that would not have borne results had there not been so much money around. Then, when the flow is arrested, or turned off ( rates rise dramatically ) the true cost of money reveals itself, and the waste and impossible projects fall apart and must be liquidated. That is the "bust" phase of the cycle. While anything is possible in this universe, including a sudden crash, It's my gut that we will enter a major topping pattern for this stockmarket that will anticipate, at some point, a monetary tightening. Perhaps Greenspan has ignored his basic sentiments and allowed political pressure to encourage continued feeding of liquidity to this boom. Such a monetary posture also allows supporting the deficit at reasonable interest rates. There is always a political reason why increased money supply growth at the latter stages of a business cycle is necessary. In the late '60's and early 70's it was to support the Vietnam War and the Great Society programs. In the late 1920's it was to support the bank of England. This money, now moving at a rate of 9% annually, cannot be stopped without stepping firmly on the brakes. Greenspan may be soon forced into a gradual, but decisive series of interest rate hikes. But he will have to act soon, or give it up altogether. In this era of fast communication, and widespread market knowledge ( even among widows & orphans ) the next rate hike, though miniscule, could send the herd stampeding to the door in anticipation of more to come. "Anticipation" is the real game. Perhaps many corporate insiders who tend to be sophisticated about the availability of funding relative to the payback on a project are now anticipating the anticipation of others.

Mike Sheller
(Thu Sep 04 1997 07:11)
Revised statistics just in...
WW: Make that 53%.

(Thu Sep 04 1997 07:11)
Malaysia fails to halt outflows

A government attempt to prop up the Malaysian stock market has failed to stem the flow of money
which is leaving the country. The key stock market index in Kuala Lumpur has fallen nine per cent
overnight. That's despite the announcement of the government scheme -- valued at 12 billion pounds --
which is designed to support the market.

Malaysia's Deputy Prime Minister Anwar Ibrahim has said the country is facing an "economic war"
launched by western syndicates. Elsewhere in Asia overnight, two days of rising share prices in Hong
Kong have ended. The Hang Seng has been trading down four per cent during the afternoon session.

In Tokyo the Nikkei offered more stability -- ending the day less than one per cent lower.

(Thu Sep 04 1997 07:18)

Mike Sheller--Good morning. Re El Nino--looks like a real juvenile delinquent! Re US Dollar--I am wondering if the US Gov't has lost control over its own monetary growth. What if they raised interest rates a notch or two, and M2, M3 still grew at 9% or better? I say that is a scenario they will have to face. Would appreciate any thoughts you have.

(Thu Sep 04 1997 07:19)
More funds linked
to Buddhist temple

By Mary Ann Akers

ice President Al Gore attended at least four events,
stretching back to 1993, in which Buddhist temple
members gave illegal donations to the Democratic
National Committee, according to new evidence obtained by
Republican investigators.
. . . . In addition to the widely reported temple event attended by
Mr. Gore on April 29, 1996, which committee documents show
raised at least $166,000 for the DNC, investigators plan to
introduce evidence that the Hsi Lai temple gave another $60,000
in illegal donations to the DNC at various functions attended by
both the president and the vice president.

(Thu Sep 04 1997 07:20)
Watches the watchers?
Mark Twain remarked that although history may not obviously repeat itself, at least it rhymes! Conspiracy buffs should check this out.
Poor Di never stood a chance!

(Thu Sep 04 1997 07:24)
AURIC (RISE IN M2 & M3) -THE Hong Kong ORACLE Speaks
With Churchillian clarity & logic Guest Guru Milhouse analyzes Alan Greenspans "secret weapon to ensure economy doesnt dive. M-3 accelerated growth is keystone to higher GOLD prices:

(Thu Sep 04 1997 07:34)
We Will NEVER Surrender

Vronsky--"Churchillian" is an apt characterization of the piece by Milhouse. Should be required reading before posting at Kitco!

(Thu Sep 04 1997 07:45)
Joke of the morn
Ted, where is the weather report? Get moving man, its morning. Here's a little joke to get everyone who loves their mother in law excited.

A newlywed farmer and his wife were visited by her mother,
who immediately demanded an inspection of the place. The Farmer
had genuinely tried to be friendly to his new mother-in-law,
hoping that it could be a friendly, non-antagonistic relationship.

To no avail, she kept nagging them at every opportunity, demanding
changes, offering unwanted advice and making life unbearable to the
farmer and his new bride.

While they were walking through the barn, the farmer's mule
suddenly reared up and kicked the mother-in-law in
the head, killing her instantly.

At the funeral service a few days later, the farmer stood near
the casket and greeted folks as they walked by.

The pastor noticed that whenever a woman would whisper something
to the farmer, he would nod his head yes and say something.

Whenever a man walked by and whispered to the farmer, however,
he would shake his head, no and mumble a reply.

Very curious as to this bizarre behavior, the pastor later asked
the farmer what that was all about.

The farmer replied, "The women would say, 'What a terrible
tragedy' and I would nod my head and say, 'Yes, it was.'

The men would ask, 'Can I borrow that mule?' and I would shake
my head and say, 'Can't. It's all booked up for a year.'

(Thu Sep 04 1997 07:46)
AURIC: The Dollar strength seems to me to be a bad sign for several reasons. First and foremost is the staggering amount of dollar denominated debt, both public and private, domestic and international. Dollars are in demand to meet interest and principal payments, the demand is not for a desire to save in a strong currency.

Secondly, holders of failing currencies around the world prefer the dollar over their local paper. Again, that is not a healthy reason for strength.

Strength in M2 and M3 is particularly troublesome when it can not be explained by borrowing for productive purposes. Those increases must be caused by borrowing for debt rollover or speculative purposes. When we keep hearing reports about soaring personal bankruptcies one would expect to see M2 and M3 declining rather than increasing. Not seeing that, the Fed itself becomes suspect in that it could be creating funds to keep the good times going with the market intervention Greenspan talked about in Jackson Hole last weekend. If that is the case, that intervention is felt necessary after a mere 8% decrease in stock values, then what the hell is he going to do when it gets to 9%?, or 10%? The bond market will spook if M2 and M3 continue to register increases. Interest rates will rise anyway and the whole effort will be futile as those foreigners who just decided on dollars realize they erred. Their money is frightened money and one would expect it to find safety elsewhere if the dollar can not be trusted. They could choose gold, DM, SF or Yen.

(Thu Sep 04 1997 07:47)

( just joking about "required reading". )

(Thu Sep 04 1997 07:55)
...time will tell
He went on to offer reassuring words about Brazil's economic situation, playing down comparisons with Asian nations recently in
the throes of market turmoil.

Brazil's current account deficit was ``normal for industrializing countries,'' and 70 percent of it was being financed by foreign direct
investment and portfolio investors, he said.

(Thu Sep 04 1997 08:04)
Malasya - another Thailand in the making?
...Dr. Mahathir going against the flow...
NEW YORK, Sept 3 ( Reuter ) - Malaysia's plan to shore up its sinking financial markets with a $20 billion share buyback is likely
to fail, U.S. fund managers and analysts said Wednesday.

They told Reuters the unprecedented 60 billion ringgit plan announced by Prime Minister Mahathir Mohamad could boomerang by
keeping potential investors away from the Southeast Asian nation's troubled markets.

(Thu Sep 04 1997 08:11)
@DFW Airport
Puetz: Considering the latest indicators, ( M2 & M3 money supply etc ) it looks like the Feds contingency plan to avoid a financial crisis has already been put in place.In light of your crash scenario still on course ? Give or take a week or so.

Mike Sheller
(Thu Sep 04 1997 08:27)
Slow grow
AURIC: The fed must decrease the rate of growth of money supply. It can do this without "officially" ( symbolically ) raising the discount rate. But interest rates will rise naturally. It is supply and demand. The bank credit inflation that has been underway since the early part of the decade has, along with other important factors, prevented interest rate rises by sheer supply. There is no need to outbid others for a commodity that is in plentiful supply. When the Fed decides it has approached, or passed, the line of tolerance it has for excessive money growth, it will "drain liquidity" from "the system." Then worthless projects and shaky speculative pyramids will scramble for cash to keep afloat, sending rates higher as money availability diminishes. The greatest need will come from the least worthy business projects, and those that are perilously over extended. Deflation will occur in those sectors while higher money costs will be reflected in the prices of necessary and conventionally useful real goods ( ie commodities like wheat, copper, corn, lumber, hogs, soy oil, etc. ) If the monetary readjustment is kept short by the Fed, it will be hoped that reinflation of money supply can be resumed before the deflation spreads to fundamentally sound industries. As this process goes back and forth, tremendous sporadic injections of ,money into the financial structure eventually work their way out into a final competition for necessary commodities as rates rise uncontrollably, rising even faster with injections of more monetary supply as lenders realize the process is eroding purchasing power and demand more and more interest to compensate for their loss. Soon the public gets wise, starts borrowing heavily to buy real estate and things, driving rates higher still, faster and faster, higher and higher. Gold , which has been rising, accelerates faster, making sharper and sharper moves, higher and higher, reaching a crescendo of panic buying. Higher, higher still...until...

Was it good for you?

Then comes the depression. The deflation. That sinking feeling. The corn wilts, the wheat blows to the wind...a calm comes over the prarie...the dust comes up over the ridge... it's time to rest...

See? It's all perfectly natural. As above, so below.

(Thu Sep 04 1997 08:30)
Japan-US trade war?
NEW YORK ( MktNews ) - The dollar ended a relatively quiet session Wednesday squarely in
narrow ranges vs. the yen and deutschemark, and traders' attention was now expected to turned to the
U.S.-Japan trade situation at least during the overseas session, players said.
At midnight EDT Wednesday, the U.S. may impose punitive sanctions against Japanese ships if
negotiators in Tokyo fail to strike a last-minute deal on Japan's restrictive port practices, according to
the U.S. Federal Maritime Commission.
Jack Griffin, manager of corporate foreign exchange sales at Fuji Bank, however, said such
sanctions are unlikely to be imposed, particularly ahead of the next Group-of-Seven industrialized
nations meeting later this month. Sanctions would imply that the U.S.-Japan trade situation is worse
than previously communicated and could scare the market into a bit of a dollar-yen selloff, Griffin said.
"I think they'll delay it," Griffin said of the FMC, in which case the dollar may well benefit. The
initial upside target stands at Y122.00, traders said.

Mike Sheller
(Thu Sep 04 1997 08:32)
Shamin' Shamans
DONALD: No sooner do we speak of cool crisp Autumn than we get some! There are even trees in my neighborhood starting to turn golden. What say we join forces and set up a corporation to shift weather for the El Nino challenged? "Sound Weather Control Applications Technology, Inc." "We don't just TALK about the weather, we DO something about it."

(Thu Sep 04 1997 08:39)
An Interview with Peter Grandich

We last interviewed former money manager Peter Grandich in April, almost
months to the day before we talked to him again on August 26. We heard he
recently changed his outlook on gold, and wanted to find out why.

Peter Grandich provides corporate development & financing consulting
services to
publicly held corporations. As the head of investment policy for leading
Street firms & portfolio manager for four hedge funds & the Peter Grandich
Contrarian Fund, Mr. Grandich enjoyed extensive experience overseeing
of millions of dollars. He also acts as a special consultant to Dragon
Corporation Ltd., an international mining investment group.

In late 1995 Mr. Grandich retired from Wall Street as a money manager, but
continues to edit & publish The Grandich Letter, and still appears on
TV, radio, & leading financial publications. Mr. Grandich belongs to the
Society of Quantitative Analysts, & the New York Society of Security
Readers can visit his World Wide Web site at ( ) .
( Our comments & questions appear in bold face type, Mr. Grandich's in normal
text. )

MONEYCHANGER Why have you changed your mind about gold?

GRANDICH We were setting record low bullish sentiment numbers that only
towards bottoms, just like record bullish sentiments appear towards tops.
signals a trend change.

What do you mean record bullish sentiment?

Market Vane, which tracks professional bullion traders, registered a record
14% bulls when gold traded around $314, so 86% were bears. They have laid
bets already, so most of the bearishness is already in the price.

Record bearish sentiment coincided with a low in a very old trading range. I
never fight decade or multi-decade long trading ranges. For 15 years gold
traded in a range of $300 to $400 ( sure, an absolute low of $285 and high of
$500, but most trading has been in the narrower range ) . The longer something
trades in a range, the more solidified the bottom and top become and the
to break. Since gold was trading very close to the bottom of that range and
sentiment became so outlandishly bearish, I felt it was time that gold
be accumulated again.

The third factor was the long term cycle between real assets and paper
At the top of the cycle are stocks, bonds, paper assets and at the bottom
real estate, etc. It turns at different speeds, but nevertheless it turns,
we are about 1800 from where we were 15 years ago.

Anyone who was active in investments then remembers that 15 years ago
looking out five to ten years expected that hard assets would do
well. They were selling at or close to their all-time highs. Financial
were considered dead, inflation and interest rates had killed them. Today
everything is pretty much the opposite. Tie that to sentiment hitting record
lows with prices at the bottom of multi-year ranges, and the risk of
accumulating gold seems limited to me.

If my reward appears to be at least two to three times more than my risk,
the investment is worth speculating on. Gold clearly has another run at 400
some time frame, so the current prices offer me three times as much upside
downside. Therefore it was worth it.

When did this change take place?

The day the market traded down to $314, but gold may retest that low. The
degree and the strength of that decline will define whether that will
become a
very significant double bottom and gold will move up, or gold simply moves
sideways to higher until we reach key resistance at $345-350. Crossing that
mark will signal that the bear market in gold is completely over and a new
up is coming.

Does the cycle between hard assets and financial assets imply you expect the
converse as well? Is the stock market headed down?

Yes, the bottom line is we will doubly right or doubly wrong.

The stock market has run its course?

It has run its course. It may run a little more before it rolls over, but
you become a buyer or a seller, you don't sell all of your stocks in one day
and buy all your gold in one day. You enter a range where you feel the
is limited and the downside limited and therefore you become a buyer or
over that period of time.

The stock market now doesn't offer any realistic, worthwhile upside goals.
Even the most ardent bulls do not argue aggressive new ownership of stocks.
They simply argue that it can go higher. One of the biggest sins that a
financial adviser can commit is to advise holding something you wouldn't
If you can't buy it with new money, why should you keep holding it with old?

You would be easing out of stocks now?

Moving away from financial assets. I suspect there has never been a time
the late '70s or early '80s that gold has been so "under-owned." I would bet
that the percentage of gold bullion ownership among investors, professional
and individuals, is at the lowest ever.

And it never has been large.

But it's probably the lowest level ever. I speak at all these gold shows,
when I ask audiences, "Who has purchased physical bullion in the last 12
months?" less than 5% of the hands are raised. When I ask, "Who has
stocks or bonds or mutual funds unrelated to gold stocks?" most hands are
raised. Now that's at a gold show. If I asked this question at a Merrill
convention, I wouldn't even come close to those numbers.

If you're that bullish on gold, what about silver?

Silver has better fundamentals but it will never attract the crowd that it
needs to propel it through resistance until gold moves up. We know about the
wide deficits in silver which are even more bullish on a fundamental basis
gold, but silver is so tightly controlled by professionals that no one can
drive it past certain resistance points until the overall fundamentals in
and silver begin attracting the general public.

That's how these professionals get away with it. They've been able to negate
the dramatic fundamentals simply because there are so few interested
Fundamentals don't get to play their role because there are some serious
players who are able to short silver. For the last 2 or 3 years commercial
hedgers have continued to be net short on the Comex, despite the dramatic
decline in silver. That is clear evidence that there is a group that has
able to influence and stop any significant rallies in silver.

Until public interest grows large enough to scare off these range traders or

Manipulators will continue to put caps on both rallies and declines.

The missing ingredient for metals, period, is the investment interest.
everybody's concern about central banks sales, industrial demand still
outstrips mine supplies, but the above-ground gold supply can cap the market
because there is no investment interest eating into that. The moment that
investment interest appears, those sellers will retreat in the hope of a
higher price. The $64,000 missing link is investment demand, and there will
never be investment demand for bullion until there is dis-investment from
equities. Bullion's arch enemy is the equity market. People just won't buy a
mutual fund and physical bullion at the same time. It's just not going to

Are platinum and palladium the harbingers of this cyclical change? They have
given us a dramatic example of what happens in a supply squeeze. Since the
first of the year, palladium has gone from $115 to $230 and the
spread has risen from zero to over $100.

Those metals are so scarce that any disruption in supply makes a dramatic
change, but they have moved for reasons other than people wanting to own a
physical metal. For gold, there is almost two decades of supply sitting in
banks. For platinum and palladium, that aboveground supply just doesn't

I was really thinking about first the palladium and platinum as part of the
called precious metals group.

That's why I don't talk about them because I really consider gold and silver
the only two precious metals. Gold and silver just don't face the same
picture, so I don't put them in the same boat.

You recommend buying physical gold bullion as well as gold stocks or in
preference to them?

During the last six months, gold stock investors have been taught entirely
and unsuspected lessons. Between the Bre-X fiasco, where one of the biggest
discoveries in history turned out to be a fraud, and others, we have
gold stocks proving that they are not a 100% reliable indicator of gold
Look at the Vancouver Stock Exchange, a good index for all speculative gold
stocks. It doubled in valued in three years, but lost all that gain in less
than six months. Therefore, those who bought junior gold stocks because they
thought gold itself was a worthwhile investment got hit with a greater
downside whack than physical gold buyers. Gold only dropped from $380 to

Right now I would argue that the risk in bullion is even less than in gold
stocks. There are a couple of caveats to that.

1 ) If the general stock market comes down hard, it would affect gold stocks
generally unless gold bullion rose dramatically. If gold bullion stayed at
$320-$330 and the DOW fell 30% in three months, overall market illiquidity
would hit gold stocks as well.

2 ) All investors play in a calendar year mentality, investing from January
1 to
December 31.

Because the first six months of this year hurt gold stocks so much,
particularly juniors, most people will spend the rest of the year sorting
their junior resource stocks to own others, selling some and buying others.
It's ironic because nothing will change in the fundamentals of the
Unless gold bullion rises significantly, gold stocks in general at best will
hold their own into September and October, particularly the juniors, and
possibly go lower if gold doesn't rally.

My suggestion is to favour gold bullion for the rest of the year,
at these levels, and use any weakness in the resource stocks to add to your
position. In other words don't chase strength; instead buy weakness.

If you were going to buy gold stocks .

Let me break them down into two categories., the majors and the junior
stocks. Because they have outsmarted all the other majors in hedging,
Gold ( ABX.NYSE ) continues to rate as a core holding for most gold
Two others are worth owning at this point: Newmont Mining ( NEM.NYSE ) and
Eldorado Gold ( ELD.T ) . ELD is an up-and-coming producer that offers
value long term.

Juniors are the crap-shoot area, because this is an industry where the norm
failure, not success. For every one junior resource company that finds a
deposit, develops or sells it, and becomes a major mine, ninety-nine don't.
If an investor doesn't understand that, he will make the mistake of thinking
he can buy and hold a junior resource stock year after year. That just
you have to play the wave.

4Keeping that in mind, there are still some juniors that I like, but it is
important to emphasise that I'm a consultant to them. The first is Britannia
Gold ( BGP.V ) with a wealth of experience, proven successful management, and
variety of projects throughout South America. It is 80% off from its 52 week

The next one is interesting because it's going after a metal that has some
controversy right now. Not many junior resource companies have advanced
projects, particularly in a safe area of the world that will be there next
month. Formation Capital ( FHO.T ) has a very advanced cobalt exploration
play in
Idaho. It has made a significant discovery of cobalt and is currently
drilling again. This is a stock that was trading as high as $10 and now
at one dollar. Ironically there are only about twelve or thirteen million
outstanding. In light of the advancement of their project, its market cap
versus other juniors is just unbelievably favourable, so they have an
excellent shot to advance this project and others and trade at a much higher

If someone is looking for a safe junior ( if there is such a thing ) , it is
Nevsun Resources ( NSU.T ) . On two separate projects the company has
a resource of about 2.5 million ounces of gold. It fair to say that the
inground resource is worth about $60 a share. That resource is worth about
$150 million, plus their $25 million in cash. Divide that by the 22 million
shares and NSU should trade around $7.00, but right now the stock trades
$4.50. It's what I call a "no-brainer" junior to own here and it looks like
can only go higher.

If you had $10,000 to invest right now, what high-risk, high-reward
would you choose?

Crystallex Corporation ( KRY.Amex ) . This is single largest investment that
ever made in a stock. In fact I sold all the stocks in my portfolio to own
one. The company is involved in a legal challenge with Placer Dome on the
ownership of a Venezuelan project with between 12 and 22 million ounces of
in the ground. I believe ( supported by three straight Venezuelan Supreme
rulings ) that Crystallex is the owner. A final court ruling is expected
sometime in October. The stock could rise five- to tenfold. Unlike most
conflicts where the bet is all or none, Crystallex has other projects
the producing mine in Venezuela. Together this stock is worth between $2
$3 on its own. Since it is only selling at $4.00 now, there is a risk of no
more than 50%, but the upside is 500% to 1000%. That's the best stock
speculation I know.

On the other hand, as a low risk, high reward speculation there's no
It's gold bullion. You know that I am not a gold hawker. Even though it has
gone against the grain of my principal business, I have been bearish on gold
at times, but right now gold's downside is no more than 10%. Whenever an
investment offers a maximum 10% downside risk with an upside two to three
that, that's the time to buy. It's not going to happen overnight, and not
many sources will confirm that view, but if you had wanted to buy equities
short gold in 1981, not many people would have agreed, either.

Yet that would have been absolutely the best trade that you could have made.
Because most investors don't understand "shorting", it's important to point
out that if you sell stocks and buy gold with the money, you are ( in effect )
shorting stocks.

Do you expect a gold bull market by December 31, 1998?

I certainly don't have a problem telling people who are not looking for a
quick buck to begin accumulating physical bullion here.

What is potentially the most startling event that could happen in the rest

For gold, the biggest would come from some announcement that the European
monetary union is not going through. It's either going to be watered down or
it's going to be severely delayed.

Why is that important? There has been a widespread perception that the
unification comes, the more gold central banks will sell to align themselves
to the EMU. The reality is, the unification sold to us two to three years
is not going to happen. There's a 50/50 chance that the formal unification
won't go through at all. If and when that occurs, it will lift a great
negative off gold.

Another possibility is that Hillary and/or Bill Clinton are indicted.
Certainly, they've committed enough sins, whether through Democratic Party
financing or the Arkansas shenanigans. People will be taken aback if and
this hits the headlines. I don't know how they've held it off this long.
call Reagan the "Teflon president," but Clinton has given new meaning to the
word. [END]

(Thu Sep 04 1997 08:55)

(Thu Sep 04 1997 08:58)
APH, great post. Thanks old timer.

(Thu Sep 04 1997 09:07)
...more political woes...will deteriorate financial crisis...
Tension was rising in the capital yesterday ahead of
today's parliamentary debate over a new constitution
that many consider a unique chance to rid the
country of blatant political corruption.

Prime Minister General Chavalit Yongchaiyudh
added to spreading unease by sending mixed signals
in a television interview, although he appeared to
ultimately support the draft.

(Thu Sep 04 1997 09:09)
Mike Sheller -Some early morning thought :Ideals & Gold are like river beds which run dry when the water deserts them,but which it can find again at any time.An ideal is like and old water course along which the water of life has flowed for centuries digging a deep channel for itself.The longer it has flowed in this channel the more likely it is that sooner or later the water will return to its old bed.Does the history of Gold prices tell us this? Happy Trails

(Thu Sep 04 1997 09:17)
(APH@Peter Grandich Letter)
Just for the record, the correct symbol for Formation Capitol
is FCO.T. Peter had it wrong in his letter.

(Thu Sep 04 1997 09:17)
Poorboys, good point. Gold has been around for a lot more years than paper and only in this age to my knowledge have governments foolishly sold their stash for paper. Some day I fear money may not be worth the paper it is written on. The gold trench is firmly entrenched in the annals of history and this paper blip will not erode those deep granite grooves. For a good time reading about paper money read "The Killing Floor"--great novel centered arond the counterfeiting business.

(Thu Sep 04 1997 09:21)
.... bank bad debt crisis is worse than published...
A strategist at a Thai investment bank said: "These
policies are fine - recycle money, help exporters,
increase provisions - all good. But we do not have all
the time in the world. We are sick . . . we need more
urgent treatment."

Mr Thanong said the World Bank had agreed to help
mediate with foreign creditors, who are owed about
US$73 billion by the private sector.

"One of my key concerns is to make sure foreign
creditors do not desert us," he said.

(Thu Sep 04 1997 09:26)
...foreing funds pulling out...
"The measures Dr Mahathir is coming up with are
increasingly desperate. The only way the market will
rise is if there is broad confidence. That will only
happen if he begins to pay attention to the economic

"In essence, what they are doing is transferring more
of the risk on to the government," ING Barings
global strategist Matthew Merritt said.

(Thu Sep 04 1997 09:28)
@weather forcast
Tort: Sorry for the delay!...Showers+ 67 degrees...GOOD JOKE!..6Pak ( 1:18 ) good other side of the coin argument...6Pak ( 2:31 ) Even though it's said tongue in cheek,he's the ultimate "ugly American"...George Cole ( 3:32 ) agree,very shortsited!...Mike Sheller ( 6:29 ) Yeah, I'm stayin with you DRIPS...and I admire your restraint but you are obviously "above" the riff-raff...APH ( 8:39 ) Good one......

(Thu Sep 04 1997 09:34)
US Securities and Exchange Commission making Malaysia ineligible for retirement fund investing....
Note: Is the down any safer at these levels?
International investors are going through a crucial
re-assessment of Asian market risk. Talk is of
Malaysia and Thailand being removed from
benchmark indices and the US Securities and
Exchange Commission making Malaysia ineligible for
retirement fund investing.

The idea of Southeast Asia as a single economic
region offering a similar risk profile is breaking apart
with the policy vandalism of desperate regional
leaders. Hong Kong, ironically, stands to benefit so
long as investors remain convinced of its free market

(Thu Sep 04 1997 09:40)
Good afternoon Jin! and thank you for the very informative e-mail about your part of the world...and don't apologize for your difficulty with the English language as I can still barely speak or WRITE my native language,let alone should be proud of such an acomplishment!
I understand EVERYTHING you are trying to say....

(Thu Sep 04 1997 09:41)
Indonesia banking
Bank Indonesia governor Sudradjad Djiwandono said the regional
currency crisis had demonstrated that the banking system could
potentially exacerbate the situation. The government now plans to
provide financial assistance to solvent commercial banks that are
"temporarily less liquid".

However, banks that are not solvent will be encouraged to merge.

"If this effort fails, insolvent banks will be liquidated in accordance with
the existing legal and regulatory procedures, while minimising the
impact on depositors, particularly small depositors," Finance Minister
Mar'ie said.

(Thu Sep 04 1997 09:46)
On Aug 18 APH posted:

If you believe the Dow will be at 6500 or lower and the S&P 700 or lower in the next 12 - 18 months, you may want to scale into these spx leap puts for dec 1998. Check current prices these may be wrong.
dec 85 LSYXQ $400
dec 87.5 LSYXJ $475
dec 82.5 LSYXX 300

Also on Sat Aug 09
Front - mentioned shorting the S&P using spiders's.

As well as Thor - using S&P put warrants.

Please could some one fill me in on how these different options work
and are they available to be purchased in Oz.
Also any sites where data can be viewed.
I like the concept of put warrants with a long strike date,
especially if we go into a long grinding bear market.

(Thu Sep 04 1997 09:46)
Tortfeasor-I was installing new Mexican tiles on my basement floor to go along with my new gas stove and broke my left hand.Yes I have my own "Killing Floor"P.S.You must be physic.Happy Trails.

(Thu Sep 04 1997 09:47)
Asian cycle
This is what happens:

Asean currencies are attacked; local
authorities raise interest rates and/or
restrict access to domestic liquidity;
local stocks are sold because of higher
funding costs and to fund short
currency positions. Local currency
proceeds of equity sales are repatriated
and/or used to fund short currency
positions -- both of which mean more selling of local currencies . . .

Remember that these classic formations are honoured more in the
breach than in the observance. If it does come, it may only be a
much-needed healthy correction to one of the biggest bull market runs
in US financial history. But it would add more pressure to regional
stock market woes.

(Thu Sep 04 1997 09:56)
Middle East-Flash
ERUSALEM - Three bombs exploded in a packed pedestrian mall, spreading death and destruction in downtown Jerusalem.
Israeli radio reports said at least five people were killed and 130 wounded in a terror bombing.

The Islamic militant group Hamas claimed responsibility in a phone call to the French news agency Agence France Presse. The
claim could not be verified.

(Thu Sep 04 1997 10:21)
@...selected quotes from this morning's Yahoo Precious Metals summary
"The London markets are still reeling from the news that the Russian Finance Ministry sold 31 tonnes of gold last month, casting a pall over the market, traders said.

"In other news, Canada announced that it sold no gold in August, with its holdings unchanged at 3.1 million ounces.

"Japanese jewelry sales for the first half of the year fell 11 percent from last year's corresponding period.

The media is the message.


(Thu Sep 04 1997 10:21)
alternative to S&P puts: URSA
As a less risky ( i.e. no margin call ) alternative to playing
S&P 500 put options or futures, consider investing in the Rydex
Series Trust ( Mutual Funds ) URSA fund which itself shorts the
S&P 500. Minimum investment is $25,000 but can be spread among
other funds including their Money Market ( with checking ) . You
can also invest in their long stock fund ( LGB?? ) if so inclined.
Call 1-800-820-0888 for more info/prospectus.

(Thu Sep 04 1997 10:34)
@ home
Donald: What do you think about APHs' 08:39 post on Peter Grandich
and that Crystallex bet?

(Thu Sep 04 1997 10:39)
Morning gang....I, like Jin feel that ripples will be felt on Wall Street from the Asian Tiger financial crisis...

John Wetterau
(Thu Sep 04 1997 10:44)
Grandich KRY - PDG
The risk/reward is great, but 50% downside looks like a lot when betting against PDG. Don't the giants usually win? I think this is a play for deep pockets.

(Thu Sep 04 1997 10:44)
APH.....Good morning....Excellent post and thanks for the Grandich article...

(Thu Sep 04 1997 10:46)
@ home
Thanks John

(Thu Sep 04 1997 11:27)
nomercy: In the wee hours a few months ago we received an anonymous email with following significent import to all concerned with what goes on in the Middle-East:

(Thu Sep 04 1997 11:36)
@ Valley
John.... PDG has shot themselves in the foot more times than any senior
in the business.This will be just another example. By the way , I'm a KRY
shareholder. Hey Ted.... Long time no talk!!! Kids back in school now , so there's more time for the puter!!!

(Thu Sep 04 1997 11:54)
The Russian sale - Much To Do About Nothing
BOB: The Russian sale is much to do about nothing, and to say the market is reeling from it is an overstatement at best. The sale could be seen as being no different than RSA selling gold as a marketeer for its mines. It is precisely for that reason that when the sale was announced, there was virtually no response from the market in regard to it. The gold market is conducting itself in a very constructive manner in establishing a base to launch a major rally.

(Thu Sep 04 1997 11:54)
ALL - you guys are awesome. Great commentary and opinion since last night. News was good ( bad? ) too.

Miro - I'm with you. Chaos is not for me. Show me a trend.

LGB and Puetz - neat stuff.


(Thu Sep 04 1997 12:02)
JOHN: Venz. has a notorious corrupt judical system and a adverse decision against PDG is also against the Gov., which is not likely to occur or PDG would not have started construction on its mine with governmental approval. The V. Gov. has also threatened to sue KRY because of its actions. Therefore, for Grandich to take the position he has taken in KRY, which must obtain permits from the Gov. to operate its other mines, in lieu of this is an example of recklessness, ineptitude, and a clear showing of a lack of common sense as well as a lack of good judgment.

(Thu Sep 04 1997 12:05)
friends in high places
To all: ( AP Alert )

Now that our government has drug Hudson foods through the mud, Clinton buddy Tyson foods scoops up Hudson in what probably is a great bargain. Did anyone ever get sick from their hamburger? I am supposed to pray for those in authority over me, but I get so sick of this corrupt outfit I could spit. 60% approval rating. So much for the astute electorate.

Steve - Perth
(Thu Sep 04 1997 12:06)
TO ALL: I will be away until 29th Sept in Broome seeing clients. If I can get onto the net up there, will have a lurk around perhaps. Look forward to catching up with all by the time I get back. Looking forward to a lunar drop on 16th Sept or thereabouts!!!

Bob M
(Thu Sep 04 1997 12:22)
It seems to me that a major problem with the stock market here, and probably very many abroad, is the case of killing the goose that lays the "golden eggs". It will be a self fulfilling prophecy, because in essence, these runaway equity markets are sucking the very life blood from the ecomnomy, consumer spending. In the rush to invest as amuch as possible through IRAs and 401K's, people are spending less and investing more, with the increase in credit card debt filling the gap for the time being and keeping the patient alive. But this cannot go on forever, at some point it must end. In the meantime, this deferred tax money is locked away and not that easy to get to without paying harsh penalties. Its not the same as a savings account, where you can withdraw on a whim to make a purchase. There is no doubt that this equity mania is affecting the world economy, and its bite will become more vicious with time

(Thu Sep 04 1997 12:23)
uhum! (clearing my throat for talk) .
GoodMorning ALL - Tis fine to wake up to the 'silent-hum' ( how's that for an oxymoron? ) of a Powerful puter in the room down the hall. Not that I just woke-up. I've already been around the world twice and through it once, read three newspapers, drank fourteen pots of coffee ( hold on I gotta pee ) , and laid some pipe ( in the yard ) ;- ) . All before 9:00am...oh my!


MikeS - Liking the new AND revised Unempl. #'s this am. Those numbers imnsho are +/- 3% in my book ( and that's a big friggen book! ) .

Mornin' Ted - Beautiful out here ( west ) . You still have the rise I still have the set. I wonder when that will change...probably when we start seeing gold go up...? You working today?...on your tan? ;- )

Ron-in-the-sack - two words DRUKENMILLER - NOT!

LGB - same to you!

Platinum - Can I get any bollinger band experts to give me an expert O on that PL? I think I know what I see...hee...hee...same thing happened mid July

Donald - What color did you paint the bedroom? Spray or brush? I have a Kirby vacuum that will spray the room AND clean it...ain't life great!

You all drinking your Five to Six glasses of OJ /day?!??!

AWAY... to slam some JUICE!


(Thu Sep 04 1997 12:40)
NOW IT'S WAR: Scorching Sun = Gold
ASEAN to mount collective action against "economic war": Anwar
KUALA LUMPUR, Sept 4 ( AFP ) - Malaysian Deputy Prime Minister
Anwar Ibrahim said Thursday that Southeast Asian nations would
launch a joint effort against an "economic war" launched by foreign
speculators on their currencies.
The government was not devoid of resources to battle western
international syndicates who have launched a war against the
region's share market and currencies, he was quoted by the Bernama
news agency as saying.
The Malaysian ringgit plunged to the sensitive 3.0000 level
against the US dollar Thursday amid Kuala Lumpur's financial market
turmoil, dealers said.
The embattled ringgit touched the 3.0000 level and, on
profit-taking, hovered around 2.9950 in late morning trade, a dealer
with a European brokerage said, adding the market was concerned over
the alarming decline in the Kuala Lumpur stock market which
threatened to spill over to the economy.
The ringgit had closed on Wednesday at 2.9730.
Malaysian share prices were lower as foreign selling continued
unabated and is likely to pull the bourse lower over time, dealers
"The uncertainties surrounding the outlook of the economy and ad
hoc policies that are implemented to defend the economy is driving
out foreign investors," a dealer said.
Anwar, who is also the finance minister, added Malaysia was
neither fearful of the western syndicates but was confident that
measures taken would turn the attackers into "worms wriggling in the
scorching sun."

(Thu Sep 04 1997 12:44)
@Personal comments
Am not sure this is the time or the place to make political comments, but with Israeli blood being spilled unnecessarily on a regular basis, I think it is time for one citizen to make his voice heard.

There was, in my opinion, never a "Peace Process". There was an attempt by the previous establishment, mainly created by university professors, to come up with a formula to have peace in our time.

Well folks, one does not do business with terrorists and murderers, ever!!
Imagine the west sitting down at a table with the likes of Hitler?
Or planning to talk peace with the Japanese, before dropping the atom bomb. No way!

Talk to the Mayor of New York who threw Arafat out of a meeting with the comments, a terrorist and a murderer does not belong at a meeting with civilized people, or words to that effect. And yet we continue this farce called a "Peace Process" Why??

Well I believe it's a sign of the times. Like the current generation wants everything today, at any price. This means, like we discuss here daily, borrowing against our future generations. Whether it's financial or moral as in our case, it's borrowing against the future. The Political Credit, one could call it. Have "PEACE NOW" and never mind who pays for it. Well, I for one, do not believe it's the way to go.

Is there a way? Yes, but it takes time. Much time. Generations perhaps.
One cannot talk of peace with a so called people that teaches its young to hate and commit suicide!!!!

Sorry if I wasted your time, but after the latest massacre in Jerusalem, our city of PEACE, I felt I had to get it off my chest.

(Thu Sep 04 1997 12:52)
to General, thanks
General, thanks for the tip on RYDEX URSA. I have seen them
recommended before by such newsletters as THE SAFE MONEY REPORT
( Weiss ) . Of course URSA is down now but should be relatively
safe to enter into at these levels. I believe a lot of professionals
use URSA as a hedge fund if I am not mistaken.

(Thu Sep 04 1997 13:00)
All - Let me get this straight. Asean nations tank out and their banx get hosed. Money fleez to safety ( US$ and Bonds ) . Downturn continues in East and they get desperate so they start selling Bonds to infuse cash into their systems ( if they have enough to do that effectively ) . Those outside of the region who have investments and loans collateralized there start feeling the pinch. Our stock market keeps edging down because of the impact this international fry-o-lator is having on profits. At some point options kick in and we free fall for a while. Everyone is running for US$ and Bonds. At that point, when every golfer on the course is under the big oak tree waiting out the storm, lightning strikes and blows the tree and its sheltered masses into little bitty, smoking splinters. ( War or political scandal ) Am I getting this right? Boy, you guys sure have bad dreams. Anyway, its starting to rain. Gotta get under cover.

Lines of credit for Mutual Funds? I thought there was this *big* inflow of money happening all the time. No need for credit under that circumstance. Anyway, I really do have to get going. But one more thing; what will be the currency of last resort when the mighty US Oak is felled? European? Tangibles? Gold? - nah, couldn't be gold.

(Thu Sep 04 1997 13:08)
Bonus joke
The following story reminds me of the markets recently and I hope you will forgive me for posting two jokes in a day.

Two hunters got a pilot to fly them into the far north for elk
hunting. They were quite successful in their venture, and
bagged six big bucks.

The pilot came back as arranged to pick them up. They
started loading their gear into the plane, including the six
elk. But the pilot objected; said he, "The plane can take out
only four of your elk; you will have to leave two behind."

They argued with him; the year before the had shot six and
the pilot had allowed them to put all aboard, and the plane
was just the same model and capacity as this. Reluctantly
the pilot finally permitted them to put all six aboard.

But when they attempted to take off and leave the valley
where they were, the little plane could not make it, and
they crashed in the wilderness. Climbing out of the
wreckage, one hunter said to the other, "Do you know
where we are?"

"I think so," replied the other hunter. "I think this is about
the same place where the plane crashed last year."

(Thu Sep 04 1997 13:08)
jMark and other politico knockers...
Please, I implore you to TELL me of an administration that is NOT corrupt and then I will continue to listen and read your posts berating this current administration. And please don't tell me that Clinton is more corrupt than say BUSH/REAGAN because I do not BUY more/less corrupt. A red shoe is red, a blue car is blue. There is NO grey area here. One can not 'grade' corruption. Now i'm gonna spit...

Cast the first stone...but don't think that Reagan and Bush should not be in jail too!! Damnit! I'm mad as hell...

And RUSH L. - You can Kiss My Bass, fatboy!!

Rush is one of the 'unemployed' in Sheller's stats... spit again


c'mon gold...get off plats BACK!

(Thu Sep 04 1997 13:12)
Contempt against Canadian @ Malaysia Court Judge
Thursday, September 4, 1997

Malaysian court sentences Canadian reporter to jail for contempt

KUALA LUMPUR, Malaysia ( AP ) - A Canadian correspondent for the Far Eastern Economic Review who wrote an article that offended Malaysian judges was sentenced to three months in jail today for contempt of court.

Chandra brought the charge of contempt of the Malaysian judiciary against Hiebert, who mentioned in his Jan. 23 article that her case had moved quickly through the court system and that her husband was a judge.

(Thu Sep 04 1997 13:14)
Racist Attack
Just as you were thinking the things could not get any better over there, Malaysian Prime Minister Datuk Seri Dr Mahathir Mohamad described the attack on the economy as the act by "racists." That is right, anybody preferring US phony money over Malaysian phony money is a RACIST, TERRORIST, COWARD, AND A BIGOT!!!!!

Gee, did that guy go to the same school as Clinton or what?
May you live in interesting times, Dr Mahathir Mohamad.

(Thu Sep 04 1997 13:15)
Never Corner a Tiger!
If the ASEAN nations wanted to defend their currencies and decided that the best way to do that instead of buying overvalued US dollars they would all use their reserves to BUY GOLD, what would happen to the US dollar? Also what would happen to the price of gold?

(Thu Sep 04 1997 13:17)
I will grade this corruption though...
Taking 'illegal' donations ( the elephants have NEVER done this ) and propositioning an employee...geee this is big stuff on a grand scale. Certainly much BIGGER than say...selling Cocaine to finance a war that killed thousands and THOUSANDS. Yeah...I guess you're right Clinton is a BAAAAAAD BOY!

What does the WINDBAG have to say about this...

and stop ruffling my feathers...

away :- )

(Thu Sep 04 1997 13:20)
I guess I have to get myself "in the loop" on this stuff. I am always "OUT OF THE LOOP". "FIND THE LOOP"


(Thu Sep 04 1997 13:25)
Hi M.Graves! Was starting to wonder if you'd disappeared or something ( just kiddin,I knew you were busy with kids,donut factory..ect ect ) ....Ken Holeskie ( manager of the Maxim Contrarian fund was on the "hot hand" segment of Squawk box ( CNBC ) this morning and he's bullish on gold shares,and in particular KRY.....and somethin else called Nevsun Resources ( Toronto ) ....but let's talk about somethin meaningful,namely the NY Rangers,and who are they going to get to replace "Mess" at center????
Cape Breton screaming Eagles home opener is Sep.20th and we'll be there cheerin em on....

(Thu Sep 04 1997 13:36)
Dick Davis Digest is now online at
If you subscribe already, or read it in the library, you can find the password in the current issue. This week it mentions ABX, FN, and BHP among gold stocks recommended. It is a good compendium of recent newsletter comments, with a front page original editorial, which this week discusses the widespread use of credit cards to borrow money to finance stock and mutual fund purchases.

(Thu Sep 04 1997 13:37)
"Danger, Danger, Danger, Will Robinson!!!"

Do not, under any circumstances, take lightly the use of RACE and RACISM by political leaders as fluff. Case in point; Rwanda. One of the most peaceful and well adjusted of African nations almost overnight became a seething caldron of hatrid and death. Race conflict and old wounds suddenly erupted into a race war. It seems that this will be the recurrent theme of many conflicts in the world for some time to come. Isreal/Arab conflict included here. I am suprised but in a way not suprised. This is a new twist in what we have heard from this region. Also do not look upon a 71 yr old leader in asia as feeble. In that set of cultures, unlike our own, age is considered a sign of wisdom and enduring strength. He may seem like a loose canon to us, but as was posted here regarding blind folded psychoanalysts and their assessments, it all depends upon your context and who your audience is. If this race issue becomes a major issue in the area, then chaos is only a few steps away ( IMHO ) .

(Thu Sep 04 1997 13:43)
@ rainy day man
EB ( 12:23 ) I'd be workin on my tan except for the fact that is in raining with approx. 30 MPH winds....instead I'm left here contemplating my navel and tryin ta think of somethin ( anything ) intelligent to say....needless ta say am at a loss for words....Reify ( 12:44 ) Sad...but TRUE!...Tort: I forgive you and wouldn't even mind a third # 2 was great!..holy sh!t, XAU is up .14....Re-gold....ride em cowboy....

(Thu Sep 04 1997 13:44)
850 GLOBAL SOURCES of Daily Business & Financial News From 6 Continents
No website completely covers important world events and happenings like GOLD-EAGLE's "Global News." Therefore, we changed the section name from "Daily News" to "Global News" - grouped by continents:

(Thu Sep 04 1997 13:48)
Death @ More death etc. etc. etc.
Thursday, September 4, 1997

Fighting erupts near Kabul; Taliban army holds ground

Thursday, September 4, 1997

Heavy fighting in Sierra Leone, 11 reported killed

Thursday, September 4, 1997

Latest Algerian massacre claims 22 victims

(Thu Sep 04 1997 13:49)
To all KRY babes:Maybe you should look at chesbar ( CBI_Montreal ) .backed by ABX is a better bet and no legal hassels-yet!no endorsment from Mr. Grandich yet either,but that's why the price is still a reasonable $1.30 Can.
Chances are, they may find as much gold as KRY claims.

(Thu Sep 04 1997 13:54)
Danger, Danger
Allen: Believe me. I know the implications of starting to play the race car d. This is why I thought the article would interest people here. ( I just LIKE to sound cynical about everything )

The race card is absolutely the last card in a bag of tricks of a leader of a country crumbled by collapsing economy or lethal corruption. When you have nothing left to play, blame "these other people" for your trouble. When I hear rethoric like that from a Chineese or Japaneese leader, I am running for the hills.

(Thu Sep 04 1997 14:04)
Petronius - that is my concern as well. As it stands that past few decades have been pretty good for Asia. There is significant pride and self-esteem that has built up during that time. These market raids strike at the foundation of .. esteem, self respect. Japan has never truly accepted other races ( other than poss. the Chinese as their precursors ) as being on par with their own race. This came out during the OJ trial, etc and prior to that. I share your concern. Particularly of a Japan/China axis.

(Thu Sep 04 1997 14:16)
Rumplestiltskins Spinning Again?
Why is it that if you read headlines for the last month gold has been falling yet the price hasn't moved?
When it drops 40 cents it is "GOLD FALLS" yet when it is up 80 cents it is "GOLD MIXED"....sure sign of spinners, spinning paper into gold perhaps?

Who Cares
(Thu Sep 04 1997 14:26)
Things to do in D.C. when you're dead

Your mission, Mr. Greenspan, is to keep the game going, at least
until the current crop of plunderers leaves office.

What can Greenspan do?

1 ) Burn bonds. Produce or exacerbate some panic event that drives
money into U.S. bonds and drives down long rates below 5.7%.

2 ) Nothing. Wait for crash, then repump economy at some pre-
calculated rate that halts stock slide somewhere slightly
above Puetz's bets. : ) Tricky.

3 ) Increase oligopolic power by forcing even more of the money
stream into fewer hands that are more likely to "save" than
"spend". Heck, I'm not so sure 9% in M-3 will create
inflation anymore. : )

4 ) Raise rates a tad, to try to hold stocks in a stagnant range.

Downside - Greenspan gets blame for "crashing market" and
"best economy of all time". Is written into history books
as Satan rather than Savior.

5 ) Bring in a new "trading partner", to perpetuate the "free
trade" pyramid. Expand trade to China? Maybe Russia? This
one is complicated and requires helpers in Congress, though.

6 ) Increase "rewards" for holding "investments". How?

7 ) Increase punishments for selling "investments". How?

8 ) Reduce attractiveness of "alternate investments". Float
a rumor about gold confiscation. Float rumor about atomic
creation of artificial gold.

9 ) Shift remaining long-term U.S. debt into T-bills. Print
paper to cover bills.

10 ) Dang. I just *know* there's some kind of "electronic" thing
he can do. Raise capital requirements for banks. Introduce
encrypted electronic money.

11 ) Burn debt. Somehow, burn debt. By driving down long rates.
How else? Leveraging? Off what? Decrease margin that banks
are making on credit cards?

(Thu Sep 04 1997 14:30)
Canadian Nationalists @ MAI by OECD
September 3, 1997
Nationalists exaggerating MAI concerns: OECD head

OTTAWA ( CP ) - The former Canadian politician now running the Organization for Economic Co-operation Development says Canadian nationalists are exaggerating concerns over a pending global agreement to protect investors.

Don Johnston, president of the Paris-based OECD, said Wednesday the proposed multilateral agreement on investment is being villified unnecessarily when it will wind up helping developing nations and protect Canadian investments.

Currently under negotiation by the 29 OECD countries, the agreement is intended as an international rulebook for investment policies much the same way the general agreement on tariffs and trade was devised to prevent trade wars from ruining the world's economy.

But nationalist groups like the Council of Canadians claim that the agreement, negotiated in secret, will force Ottawa to offer foreign firms the same advantages as domestic firms.

(Thu Sep 04 1997 14:31)
Nick @ Aussie -- To trade options, you will have to get more information from your broker. I don't know how things work, 'down under', but check out the URL below. It will give you some idea as to the what the various ticker symbols would be for U.S. futures, options, and equities. There is information on strike price codes also.

As to how you trade U.S. instruments in foreign markets, I can't answer that question.

Here's another URL ( I thinks it's very slow during U.S. trading hours )

Also, you may want to try and browse their web site. Hope this helps some!

(Thu Sep 04 1997 14:34)

Both of these markets that are closely linked to the dollar have taken sizeable hits over the past few days. Ethnically, both are closely linked to Mainland China and wonder if something is brewing? Or is it just business as usual and related to Asean crisis?

(Thu Sep 04 1997 14:42)

Nick here is anoher quote source for futures and options, including stock options and LEAPs...

(Thu Sep 04 1997 14:55)
...welcome to the big league Dr Mahathir Mohamad....
Malaysia loses $30bn play in market

(Thu Sep 04 1997 15:00)
in sack-o-tomatoes
EB: That's one word. 'YO MAMA!' is two. :- ) Actually, don't have much faith in the Niners this year. Just hopin' they at least go 8-8. The Niners may not get us there this season, but gold will, I think. And that's good enough for me. BTW, EB, who do you like ( don't say, "THE BOYZ!" ) .

(Thu Sep 04 1997 15:09)

Ron--I think the Packers gotta be the favorite this year. Not because they're so great, it's just that they have less problems than any potential contender, such as Dallas or SF. And "Lord Help Our Colts".

(Thu Sep 04 1997 15:30)
Nomercy 14:55

So just the intent to save the Maylasian markets with a $30 billion dollar package sent them down 8%. Maybe this may make AG and BR wonder when its our turn?
Mahathir, a word of advice: IMHO; BUY SOME GOLD WITH THAT MONEY, say with about 50 % of it.

(Thu Sep 04 1997 15:37)

Jack--Re advice to Dr. Mahathir--Hell, why not? What's he got to lose at this point? Nothing else seems to work. If I were in his shoes, I'd GO for it!

(Thu Sep 04 1997 15:44)
from sack-o-potatoes
YO MAMA may be two words but YOYOMA is one ( STRAD? )

(Thu Sep 04 1997 15:45)
Jack...his dreams were grandiose...and they've been shattered as he overeached...and can't face the consequenses...he's now operating in uncharted territory for him and that's dangerous...
Here's more developments
Malaysia Ends Trade Limits on Benchmark Stocks, Anwar Says

Malaysia will remove trading restrictions on the 100 stocks of the benchmark Composite Index effective Friday, Finance Minister
Anwar Ibrahim said. The Composite Index has fallen 14 percent since August 27. On August 27, the Kuala Lumpur Stock
Exchange restricted trading on the stocks that make up the benchmark index in a bid to make it more difficult for investors to sell
borrowed shares short, in hopes they can be repurchased later at a

(Thu Sep 04 1997 15:49)
Does anyone want to start a letter to the good Dr. M that we can all sign and send to him via express post ( from Kitco Gold Discuusion Group ) . This may be our only shot to touch history in the making.

(Thu Sep 04 1997 15:57)
advice to Dr. Mahathir
You guys are missng the point. He does not have any money! He plans to issue a BOND to finance this nonsense. Let me see, people are dumping the stock because the ringgit was in a freefall, so he issues a bond ( nominated in ringgit ) . Great, now the only problem is to find a moron to buy the bond ( Any volunteers? LGB? ) . Something that stupid only works in the US ( and not for much longer ) .

Now, if he had any gold already, he could sell it and thus remove the excess ringgit that started the problems in the first place. Where did that guy learn economics? From Clinton?

(Thu Sep 04 1997 15:58)

Dow now down about 70 points and heading lower with about 30 minutes to go. Final stats to be updated in about an hour. We now return you to the regularly scheduled program on KITC

(Thu Sep 04 1997 16:11)
Petro - Wow, I thought you really wanted to, you know, maybe help this guy out. OK. I'm willing to do my part. But first thing I want to know is how big a Ringgit bill ( or bond ) is. That way I can figure out what the square yardage cost would be and if it would pay to use it as a wall covering material. ( Be the first one on your block.. )

ALL - Has anyone here done any rough calculations to determine how far out of wack the US$ is in relationship to gold. I recall we are at about 20% of 1970 on inflation effect ( our $ devalued 80% since then?? ) . But our debt and currency expansion certainly has been greater than that since 1982, hasn't it.

If our outstanding $6T / 260M gold reserve oz. that seems high ( at roughly US$23,000 ) . Any educated guesses out there?

GSC or others good with math - How would one go about making a rough stab at figuring this out?

(Thu Sep 04 1997 16:19)
George S. COLE ( or anyone else ) -- Why has there been a very strong correlation between the US$ ( DXU7, see ) and the S&P500 ( RSPU7, see ) during the past two months but not typically? The charts are almost scary, they are so identical. Please help, I'd like to understand. Thank you.

(Thu Sep 04 1997 16:20)
Trade War?

U.S. slaps sanctions on 3 largest Japanese shipping companies.

(Thu Sep 04 1997 16:21)
Dr. Mahathir must have graduated from the Merril Lynch school of investing. The hedge funds led by ML no doubt outnumber gold buyers 10-1 and keep on holding the lid, even though every stat published is going against the paper bulls ( accelerating US economy, hence higher PUBLISHED inflation, higher interest rates in the US & Germany , currency turmoil, debts defaults etc etc. ) They are also trying to keep Bonds yield under 6.75% and CRB under 245, another couple of indicators and holding stocks above a watermark of 7800.
The paper bulls like Dr.Mahathir should bite the bullet and accept reality. It would be better to take a couple of steps back now and then leap forward instead of creating a catastrophe scenario, by trying to maintain artificial values ( over inflated stock prices ) and risk a serious financial crash, no matter how prepared they think they are. Their 'enemies' will pounce if the opportunity presents itself and they are going to be as sanguine as the hedge funds are being in Asia.
Sooner more than later the paper bulls led by Merril Lynch will learn their lesson, that the new paradigm never was.

(Thu Sep 04 1997 16:32)
Barton Biggs(Morgan Stanley)
I have this eerie feeling that in many ways, the summer of 1997 is the mirror image of the summer of 1974. Bob
Farrell of Merrill Lynch wrote a great piece couple of weeks ago making this comparison [ click on last week's
Matador], although he seems to come to less dire conclusions than I do. However, I have too much respect for him
to put words in his mouth. For my money, he is the best market analyst of all time.

What strikes me is that both of these long, hot summers represent extremes of stock market sentiment that may
occur only a couple of times in a generation, and of course, the fascinating element is that today is just the opposite
of then. The common thread is that people in 1974 were saying, "it really is different this time," just as they are today,
but with a different conclusion.

(Thu Sep 04 1997 16:39)

Dow trimmed losses to close down about 27 points. Next update will be during Asian market trading unless news warrants a more immediate update. We now return you to your regularly scheduled program on KITC.

(Thu Sep 04 1997 16:44)
@...Skylark - agreed
I posted the "quotes" from Yahoo Precious metals summary earlier today to confirm that media spin management is clearly employed to keep gold prices down. I totally agree that the Russian sale had zero impact on the price. The report as stated that Canadian CB "did not" sell any gold in Ausgust. The report indicated that Japanese jewellry demand was down 11% in the first half of 1997 but did not confirm that over-all global demand for gold ( jewelry ) was up - especially in the largest market, India. The spin masters are using these and other non-events to keep gold prices in check. I am not a goldbug. It is obvious that media spin doctoring is heavily biased against gold.


(Thu Sep 04 1997 16:49)
Japan Life Ins. Co's(selling US bonds)

Aug. foreign exchange volume sets record
high for month
Trading volume for the dollar and the yen on Tokyo's foreign exchange
market in August averaged $25 billion per day, a record for the month.

The high volume was attributed to speculative buying of the dollar, driven
by differences in fundamentals between the U.S. and Japan.

While U.S. hedge funds and other foreign investors sold the yen,
exporters and domestic institutional investors such as life insurers sold the
U.S. currency heavily when it rose to 120 yen, boosting trading.

Daily average spot transactions hit $10.2 billion, the third-highest ever for
August, while fowards and swaps trading averaged $14.8 billion, an
all-time high for the month.

(Thu Sep 04 1997 16:54)
Free Trade @ Canadian Businessmen Failed the test. (Suits eh!)
Thursday, September 4, 1997

Canada seen losing ground to U.S., Asia

Economics Reporter The Financial Post

Two reports issued this week by business economists portray the Canadian economy as falling behind the U.S. in productivity and losing ground in offshore markets.

Canadian manufacturers have failed the challenge of the Canada-U.S. free trade agreement signed eight years ago, says an analysis by Jeff Rubin and John Lester, economists at CIBC Wood Gundy Inc.

However, there is cause for concern about investment flows from overseas. "Frequently Canada is not even on the radar screen of potential foreign investors."

Foreign direct investment had negative connotations when used to control domestic markets behind a tariff wall. "Today, Canada is in competition with the U.S. and Mexico as a location for business to serve at least the North American market, if not the global market," McCallum said.

(Thu Sep 04 1997 16:57)

Just curious if anyone has used this search tool-- Try it out!

(Thu Sep 04 1997 16:59)
Russia CB accumulating gold

Gold held within a narrow range in quiet trading in a week
shortened by holidays in London and New York. However, the
price came under some renewed pressure this Tuesday on
reports of the positive identification of Russia as the central bank
seller rumoured to be active in the market recently. Russias
Ministry of Finance confirmed that it had completed the sale of 31 tonnes
of gold during August in order to raise funds to pay off state debts to the
countrys gold miners.

The Russian authorities emphasised that the sale had been planned
before, and the proceeds were provided for in the budget. Nevertheless,
some analysts were quick to seize on what they said were the bearish
implications of the Russian news, claiming that while the quantity of
metal was not significant in itself, the sale contradicted expectations that
had been built up in some quarters that Russia was seeking to build its
gold reserves and would therefore be a buyer rather than a seller.

News reports from Moscow suggest this view is incorrect, and that the
recent sale has no bearing on moves to build up the countrys official
reserves of gold. The Russian government has increased the gold
reserves held by the Central Bank of the Russian Federation from less
than 200 tonnes when President Boris Yeltsin took office in 1991 to 428
tonnes by May this year, and has committed itself to continuing to build
reserves by some 90 tonnes a year during this year and next. The
government has also said it will not sell gold out of its official reserves,
but will limit any sales to current production, following the pattern set by
the central banks of several other gold producing countries.

In other news, the most recent Comex statistics support the view that
there has been no follow-through to the wave of short covering that
drove prices back above $320 in late July. The statistics for August 26
showed large speculators still holding net short positions of 51,542
contracts, equivalent to 160 tonnes, up from 49,707 contracts two
weeks earlier.

Gold lease rates have also held steady, with the one-month rate edging
back up to a fraction over 2.0%, while the less volatile 12-month rate
stood at 2.32%.

Elsewhere, Chinese officials told a conference in Singapore that
demand for gold in the country is currently outstripping supply, and
Beijing plans to raise output to "help bridge the gap".

Strad Master
(Thu Sep 04 1997 17:01)
Perhaps it's three?
ToRon: Sorry, it's Yo Yo Ma. First name: Yo Yo Last name: Ma

(Thu Sep 04 1997 17:15)
US Bonds
WASHINGTON ( MktNews ) - The U.S. Treasury's Bureau of Public Debt confirmed Thursday the
introduction of three new services for Treasury Direct customers designed to make it more
convenient to manage investments in Treasury securities.
The new services will allow customers to directly sell their securities through the Chicago Federal
Reserve Bank, pay for them through a debit on their bank account, and reinvest directly through
telephone orders.
According to the new rules, the sale of securities can be done without first transferring them to a
bank or government securities broker or dealer. A form which authorizes the sale is forwarded to the
Chicago Federal Reserve Bank which will act as the Treasury's agent.
The Chicago FRB will usually get three price quotes from dealers and accept the highest bid.
There will be a $34 fee for each security sold, and the proceeds of the sale less the fee will be directly
deposited in the customer's bank account.

(Thu Sep 04 1997 17:15)
in bill-paying-hell
Strad Master: I'm embarrassed to ask: But is Yo Yo Ma a musician?

Auric: I fear you are right about the Pack. What an arm on Favre! Thanks for all the links of late. I'm a little bit of a surfer dude, myself and here's a WWW Worm search engine I found the other day that's kind of interesting: . And this one will surely drive Kitcoites nuts. It's called Hep Cat Central: . Back to writing checks. Ohhhhh, I hate writing checks . . .

George Cole
(Thu Sep 04 1997 17:21)
virtuous circles
The latest issue of the DICK DAVIS DIGEST has an article recommending the Malaysia Fund. I assume this originally was published just before the drop. Talk about bad timing .....

KORODNY: The U.S. stock market and the dollar have tracked closely since this bull market began, although not as closely as the last few months. Make no mistake -- the dollar bull is the fulcrum of this mania. The strong dollar helps suck in foreign capital to buy our stocks and strength in U.S. stocks in turn sucks in more foreign capital and gooses the dollar further. A virtuous circle for the financial powers that be. But when the thing starts to reverse all hell will break lose.

(Thu Sep 04 1997 17:21)
Germans rhetoric
..what they're really saying is that interest rates SHOULD be raised but we can't because we don't want an economic slowdown & miss the Maastrich agreement --which they will anyway--- therefore higher global inflation...
" ( The Bundesbank ) will continue to take its stability mandate seriously until its monetary policy
role ends and so will keep an eye on developments in prices," Meister said.
"If the European Central Bank must begin ( EMU ) with the burden of too-high inflation, then
winning trust in the euro would be more difficult."

(Thu Sep 04 1997 17:24)
Careful about visiting Hep Cat Central. It has some of those naughty four letter words.

(Thu Sep 04 1997 17:27)
BOB: We seem to have a common interest in BGO. Are you aware of any recent events which account for the continued selling in the security. I find it of interest how the market from time to time changes its emphasis on gold securities. At the beginning of the year exploration companies were in vogue. Now, any announcement of a new find is treated with indifference. The market now appears to be focused on the majors and other producers with leverage such as Amax gold, whereas companies with undeveloped resources in the ground such as BGO, CBJ, and GSR are being sold. Perhaps this is due to difficulty in obtaining financing, both equity and debt, to develop such projects.

(Thu Sep 04 1997 17:30)

HAR! Hep Cat Central! Who would have believed it! I am just glad they didn't have a page that pops up and says, "THREE TWO FIVE"!

(Thu Sep 04 1997 17:32)
September 4, 1997

Don't expect much relief in unemployment rate

OTTAWA ( CP ) - The economy may be growing rapidly, but observers don't expect much relief in the unemployment rate when Statistics Canada releases August job figures today.

Most economists expect the rate to be about the same as it was in July - 9.0 per cent - or even slightly higher at 9.1 per cent even though the economy will have produced 30,000 to 45,000 jobs in August.

(Thu Sep 04 1997 17:45)
Does anyone know where I can access DOW news stories on the Web. Thanks

(Thu Sep 04 1997 17:54)

Ron--Thanks for the site that shows the most accessed links on the internet for the day. I saw that Jenny McCarthy, Demi Moore, and Pamala Anderson were in the top ten. The question begs to be asked, "Is the internet becoming another boob tube?"

(Thu Sep 04 1997 17:54)
Business @ Hate Labour - Love Free Trade (Suits Eh!)(Twisted Sense of Democracy)
Thursday, September 4, 1997

Business group presents Ottawa with wish list

Ottawa Bureau Chief The Financial Post
As well, the organization wants Ottawa and the provinces to reduce trade barriers and create a "truly free trade zone" in Canada.

However, it warned Ottawa not to bring back proposed changes to the Labor Code, prepared for the last Parliament but not passed into law before June's national election.

(Thu Sep 04 1997 18:24)
Just what the Doctor ordered
Blow other peoples money on an ailing stock market....I hope these stupid people weren't foreigners else he'll be laughing his head off.

If he realised how destabilising this would be for the US in such a precarious vulnerable position then he wouldn't be thinking twice. Say he uses some dollar reserves ( $20 Billion ) on margin forward BUY GOLD this could create quite a ripple, I should think.

(Thu Sep 04 1997 18:58)
Nick@Ausse - LSY is the symbol for the 1998 SPX Leaps contracts. Symbols and quotes for all SPX contracts can be found here:

It takes a couple minutes to come up.

Bill Buckler
(Thu Sep 04 1997 19:13)
@Treasury Debt
Here is the total from the Treasury's Debt "To The Penny" site at: on 09/02/1997 $5,424,368,836,901.08

That's up $US 20 Billion in one day and "only" $US 75.63 Billion below the present debt ceiling of $US 5.5 TRILLION. The latest total, for 09/03 was down by $US 11 Billion. Seems like something else is getting "volatile".

(Thu Sep 04 1997 19:38)
A Home
RYO up 1/8 to 2 1/8 with gold down. All Their shorts are expiring worthless and will be the real gold buy when gold rises. The management are genius level.
Buy all ya kin git that means you TED and GSC and Peutz and ( RJ as RYO has been successfully short. )

(Thu Sep 04 1997 19:40)
@ anyone
Any one out there: Does anyone know if stock certificates held in Street name ( the brokerage has the certificates ) are Federally insured or in other words what happens to your stocks held by a brokerage,if the brokerage goes belly-up????....No conspiracy crap! just the facts!

(Thu Sep 04 1997 19:44)
Ted: which country?

(Thu Sep 04 1997 19:44)
Money Supply -
NEW YORK, Sept 4 ( Reuter ) - U.S. M-2 money supply rose $3.8 billion in the August 25 week to $3,970.0 billion, the Federal
Reserve said.

The broader M-3 measure rose $14.9 billion to $5,206.2 billion. M-1 was up $3.9 billion to $1,069.7 billion, the Fed said.

The Fed said the four-week moving average of M-2 was $3,958.2 billion versus $3,950.0 billion in

(Thu Sep 04 1997 19:46)
TW: Hi dude....why RYO???? Kitco bein very sloooow for anyone else??

(Thu Sep 04 1997 20:00)
TW: In 92-94 I had a big position in RYO and did very well with it. Presently have none and am interested in you thoughts regarding their prospects. I agree that Peg is a ballsy lady but they are really rolling the dice, bigtime, with Kemess. I would apprecitate your thoughts on their present position. Volume the last 2 days has been good. More to come???? Please feel free to use email.

(Thu Sep 04 1997 20:01)
@Ted and fed insured stock certificates
Ted, I don't have anything in front of me but I clearly remember reading
statement from brokerage company saying something in this line "accounts
are not insured by fed. however they are covered by brokerage assets"

This tells me something to the effect that if it goes belly up you'll
loose. Not sure if certificate in street name gives you any protection
but I dont have more details right now.

(Thu Sep 04 1997 20:01)
Bill Buckler
Re: US Debt ceiling
I thought it was recently raised to $5.9 re: recent budget

Strad Master
(Thu Sep 04 1997 20:03)
Happy to oblige!
RON: Yo Yo Ma is probably today's preeminent young cellist. He's recorded everything and has sold a zillion records all over the world. If you keep an eye out, you'll eventually be able to catch one of his live performances broadcast on PBS.

(Thu Sep 04 1997 20:06)
Fidelity Select American Gold & Precious Metals Chart.
Ten market days ( seven hours / prices per day )

(Thu Sep 04 1997 20:06)




(Thu Sep 04 1997 20:06)
For What It Is Worth
Dec. 98 and 99 gold are both on their former lows, touched 4 times earlier.

Paula Jones
(Thu Sep 04 1997 20:11)
For your info. Bill has no b***s and other distinquishing characteristics. He showed me.

(Thu Sep 04 1997 20:12)
You mentioned that you could compare End Of Day ( EOD ) #'s for precious metals, or gold anyway. This is a site I rely on for what I think to be precise info. Tell me what you think if you've got the time...thanks


(Thu Sep 04 1997 20:20)
Saving Up For His Pentium VII
Auric: Yes, I think so. Web TV is already here. Boob cybertube is, too. Did you see the piece in IBD yesterday about making the web more "tv-like?" Advertisers want to be able to send us lots of live video and audio, as we surf. Bandwidth bandits, these guys. Get ready, folks. Live videoconferencing is coming to Kitco [too] soon, and we'll someday all be able to see as well as hear each other as we speak.

Here's another search engine that allows you to WATCH almost live as search requests come in: . It's pretty predictable what kind of requests you'll see, particularly late at night. has three pretty good "pages" of hot links. I found there ( another interesting research site, though the hits I got when I searched on 'central bank gold leasing' are kind of dated for the goldbugs at Kitco ) . And the movie links are great, if you are a movie buff. For instance, one of the sites will give you a test and then recommend movies for you. Another one will tell you showtimes for theaters near you, etc.

(Thu Sep 04 1997 20:26)
in sack-o-tomatoes
Strad Master: Yeah, but is he ever on CMT? :- ) Just kidding.

(Thu Sep 04 1997 20:32)
cAPs LoCK...Caps Lock...CAPS LOCK??
YoU wIN i lOSe...

bUSh iS bRaVe...

reAgAN Is cHUrCh gOINg...

mR. cLIntOn iS A coKE sNOrTin, BitCh GetTiN' F**cK-oFf



(Thu Sep 04 1997 20:32)
Five news stories...interesting development in Asia....
1 ) China warns Japan "China will not tolerate having Taiwan included in the scope of Japan-US military co-operation'

2 ) Sino-US ties are at a crossroads ahead of President
Jiang Zemin's landmark visit to the United States
next month,

3 ) Beijing yesterday hit out at the United States for
selling arms to Taiwan and called for improved
relations ahead of the Jiang-Clinton summit.

4 ) Beijing urged the United States yesterday to lift
sanctions on sales of nuclear equipment and
high-technology to China, saying the relaxation would
help to cut the US trade deficit.

5 ) Taiwan is set to buy 13 OH-58D Kiowa Warrior
helicopters and launchers for Hellfire anti-tank
missiles as part of a package worth US$172 million
( HK$1.33 billion ) , the Pentagon said.

(Thu Sep 04 1997 20:35)
TED and all,
Copy from reuter:
and try the "chat" too,though they sometime is too silly ! the local broken grammar....try your I.Q!....

(Thu Sep 04 1997 20:50)
@DFW Airport
Ted: Stocks held in street name at the brokerage house are NOT federally insured. Most all brokerage houses are members of an insuring agency known as SIPC, which insures your account up to 250,000 this is for USA,
I am not sure about Canada.

(Thu Sep 04 1997 20:54)
Ron Yo Ma Ma...MaMa RoNo
You talkin' about my mama?!? Duke's Up for sure!

You ask me my 'team'? I'll have to give an apropos analogy:

We are the goldBugs. We have been for years and years, like MOST goldbugs. All 'OUR' goldBug friends live in So. Cal. We have watched gold sink and sink and sink and sink and sink and sink and sink and yet we STILL LOVE GOLD. We don't know why. We don't ask why. We just DO IT! It is blind-faith ( great band ) that wakes us up in the morning and throws us in the shower to prepare for a 'NEW' day. We hate it and we love it...that Yellow-Stuff... and now "I" have been able to shed the bonds of love because we moved to St. Loius, where Gold will breath it's last breath. Only to return 'someday' from the bowels of the earth ( figuratively speaking of course ) ;- )

Need more hints...?

thought not...


but I still have my 'other' favorite team...whoever plays the 49boys...and no I don't care either way for "the Girls"

(Thu Sep 04 1997 21:07)
Uris ( 20:50 ) Thankx!....I ain't Canadian but Amerikan....My brokerage is Fidelity so I presume they would have that SIPC 250,000$ insurance...If this is the case it sounds as if your stock is as safe in their hands as your own ( if under 250,000 ) ...correct???...EB: What you on tonight bro??
Gold soarin tonight ( Dec.Gold up .10 )

(Thu Sep 04 1997 21:12)
Hi JIN! Thank you for the site and will check it out....Kitco is still verrry sloooow tonight for meeee....not good for someone who has A.D.D...

(Thu Sep 04 1997 21:18)
@ home in Fl.
Ted: Most all US major brokerage firms carry insurance with Security Investors Protection Corp. ( SIPC ) the limits vary but 25 million $ is about average.

(Thu Sep 04 1997 21:19)
@DFW Airport
Ted: SIPC stands for Securities Investors Protection Corp.
I am positive that Fidelity is a member I use Fidelity and Waterhouse

(Thu Sep 04 1997 21:33)
@Uris+ Plaintalker
Thankx guys!....P.S. Uris: What the hell you always doin at the airport??
Dec. Gold still up a dime.....

(Thu Sep 04 1997 21:36)
Thanks to all for help on puts.

I have an interesting chart which I would like to post here but I do not have Netscape so cannot attach it to my comment.
The chart is a 10 day moving average Swing chart, which follows NYSE, Amex, Nasdaq Indexes.
Is there someone here that I could email the file to and then they could post it here.


I think a very interesting week or two ahead.

(Thu Sep 04 1997 21:58)
One more thing, than its Eatskies...mmm good...
I remember the day that RJ came on the scene. He was Excited, Brash, Borderline Obnoxious, slightly Pompous, definitely Cocky, Full-o-Bombast ( shall I continue? ) . Many people did not like him and 'fought' with him. He was 'against-the-rule' as we say in my line of work. But then I started dissecting what he said and I read through his lines for the sheer reason of wanting to make MONEY and he also made a hell-o-lotta sense.

He said words to the effect "Buy Platinum at the Dips". Well I DID MY OWN HOMEWORK and concluded it looked good then I "bought at the dips". And NOW I am making big "Pails-O-Clams" on theses trades.

That leads me to say this: Join Us and Make the BIG-PAIL-O-CLAMS...or root for the St. Loius Rams and not want to wake up in the morning. btw the PL/Gold spread was trading well over 100 and now ( after the dip ) it is back around there AGAIN! Let's Go Gang! Let us ALL make money until Gold Shines Bright Again... ;- ) Join the few, the proud, the PlatBugs!

RJ - thanks again and should we meet at a Strad concert! count my pile-o-plat-bucks
EB ;-$$

anybody watching plat spot 2-nite? hee...hee...

(Thu Sep 04 1997 22:02)
Ted...It's good...want some??
Just "blowin' out the pipes" ;-0 Dinner 2-nite is a simple green salad w/fixins, probably a vinegar and oil combo w/ these tasty sourdough breadcrumbs I bake in the oven...yummy :- ) ) )

Slight clouds in the horizon...what a GREAT sunset!!

away eb

(Thu Sep 04 1997 22:05)
Front, Mooney: Ted's question has me wondering about Canadian brokers. I recall being told in the early '80s that segregated shares were filed separately from all the rest of the Brokerage's shares of the company. A client could ask to have all shares segregated which meant placed in his/her name to secure against the Brokerage house going under. No need for insurance. This sound right to you?

(Thu Sep 04 1997 22:17)
Yeah,It sounds good out a plate fer right over!....
......Dec.Gold @ UNCH....this is like watchin paint a warm spot fer that stuff,as YOU know...Go Giants!...Vermeil do turn-coat Rams

(Thu Sep 04 1997 22:25)
..... Salad Boy .....

Who are you calling excited?????????

(Thu Sep 04 1997 22:48)

I didn't know doom and gloomers could be so funny. You guys are a riot.

Sometimes I laugh out loud.


Sorry to waste all that space with caps. I'm kinda new, and just wanted to be a little more forceful. ( obnoxious )




(Thu Sep 04 1997 23:01)
@ the end
Dec. Gold up .40 @ 324.70 .....Malaysian KLSE up 8.95%....Indonesia up, this ain't gambling...."nite all"....

(Thu Sep 04 1997 23:10)
No More Doom & Gloom @ Up Up & Away Canada, Good Times Ahead.
September 4, 1997

Time to decide on rainy day plan, economist says

TORONTO ( CP ) - The best way to keep Canada's economy growing is to reach a national consensus on a plan to reduce the huge national debt, says Royal Bank's chief economist.

Once the federal government's annual deficits are tamed this year or next, payments on the $600 billion debt would help keep interest rates low and create a sense of confidence in the future to "anchor" growth, John McCallum said Thursday.

"Now is the time to prepare for the rainy day," said Anna Guthrie. "It does become important to determine policy priorities going forward."

Ordinary citizens who find all the talk about debt and deficits can think of it this way, she added. "If your income suddenly went up and you were deep in debt, wouldn't it make sense to pay off some of the debt or the mortgage before you get a new TV?"

Kahunna Grande
(Thu Sep 04 1997 23:30)
Permain Basin,Texas
While laboring greatly today and taking a well deserved rest, I was reading the August edition of International California Mining Journal. In Mellvile's collumn he was discussing the crash in the price of gold. Anyway there was a chart for the DJIA for the last year and also a chart for the London Fixing Price for the last year. It seems gold and the DJIA have mirrored each other. Gold is down 13% for the past six months and the DJIA up 17 % for the same period. January to July. With an average of 15% does this mean as the trend for DJIA is up and gold is down that in the next six months the DJIA should be around 9200 and gold at 270 oz. If somthing happens to change the trend for DJIA down and gold up would this put gold at 365 and the DJIA at 6800 in six months. I am not TA. All of this is simply an observation of two charts. Any comments?

(Thu Sep 04 1997 23:52)
What future for Gold ? @ Justice, and illegal standards, in the USofA.Now Canada eh!(Be Quiet-Consume-and Die) ?
June 3, 1996
RE: LRC 94-634
REED v. YOUNG, et al.

On July 5, 1991, one month shy of 5 years ago, my wife Janis and I mustered up the courage to register ourselves as plaintiffs in a civil law suit that we knew was seeded with political land mines. That original lawsuit, LRC 91-414, filed in federal court in Little Rock, Arkansas, and later to evolve into case number LRC 94-634, has transformed into an all-consuming endeavor, for not only Janis and me, our team of lawyers, but many concerned American citizens as well.

We knew all along, as well did Little Rock Federal District Judge George Howard, Jr., that this case was not only about the violation of our civil rights, but carried with it the burden of re-educating the Court, the jury, and the American people about a painful period known in the annals of history as Iran-Contra.

The Executive branch's by-passing of congressional restraints designed to prohibit or restrict military aid to the Contras through the law known as the Boland Amendment was in great part carried out on Arkansas soil with the full knowledge and complicity of our now-sitting President, Bill Clinton.

Some of the CIA's activities which took place at Bill Clinton's Mena, Arkansas were patriotically driven and justified. Other activities, however, those which included the importation of cocaine and money laundering, can never be justified in the domain of the public. For this reason, there has been a concerted and bi-partisan effort to keep the subject matter known as MENA from becoming legitimized through the court process.

With tears in our eyes, lumps in our throats, and knots in our stomachs, we are instructing our attorneys to non-suit this case.

To the hundreds of people who directly participated in our struggle, we would like to remind them of the many victories achieved throughout the course of our ordeal. In many ways we did win -- at least in the court of public opinion. Our numerous depositions, which were funded in great part by public contributions, have clearly established the fact that the CIA's
activities at Mena, Arkansas *did* take place, and that prominent politicians from both parties either were complicit in the illegal activities that swirled around this covert operation, or even worse, were directly involved or benefited.