I have thought all bonds entusiasts might be interesed in the following story: http://www.scmp.com/news/template/templates.idc?artid=19970907235440047?=biz&template=Default.htx&maxfieldsize=3086

Chineese bonds are in trouble and the government is considering a "forced sale of bonds to work units." Together with looming strikes that should create some fireworks there.

Nick: Is Giralia a mining stock, an index, or what. Why such volatility?

To Nick@Canberra, would like to send you an E mail regarding roulette, please send your address.

All- For the technicians, or just anyone enjoying looking or studying charts, thanks to whoever posted the candle of bond yields this past weekend, I spotted something of interest.
Check out the time period when bond yields made a bottom at the end of 1995, and again the hammer formation 6 weeks ago, and compare this to the charts, both monthly and weekly of golds, and you'll see something interesting. The turn in the yields, or of course the long bonds themselves, preceded the turns in gold and are now predicting a turn in gold either now or within the next 2-3 weeks.

Tell me if you agree?

As much as I usually agree with Mr Puetz, his comments on gold funds must be addressed. I can find only 14 established US gold funds before 1985, half of which concentrated on S. Africa, including ASA. Due to the steady fall in the value of the rand, most S. African stocks have lost big time and taken some funds down with them. Today there are over 40 US gold funds and several Canadian, although one quit last month from lack of interest or business or something. http://www.eaglewing.com

Since 1985 there has been only one serious Dow market crash, October, 1987, and while gold funds took a serious tumble, they fell from a point just below their yearly highs. Most made recoveries within 2 months, only to follow gold down from its high of 501 set in December, 1987.

Today's situation sees most gold stocks already clobbered due to the low gold price, companies operating at a loss and waiting for any excuse to rally. I am convinced that most of these gold stocks will rally when gold does, and with vigor. Their stocks trade like a doberman on a lease, being dragged one way by the owner while trying to go the opposite way to rip up a victim. If the lease breaks, they will drag most gold funds to big gains. As CC mentions, if gold reaches $400, several of the funds in small cap gold stocks will probably double, while gold will be up 30%. I drool all over my PC when I consider $500.

An exception will be those funds stuck on the big golds listed in the S&P 500, which will have to share in the market liquidation of index funds when redemptions are forced across the board due to an overall market meltdown. I think we are seeing some of this now as the XAU seems to be supported when the Dow climbs and has a hard time climbing when the Dow falls.

S. African stocks and gold funds will not suffer when the Dow croaks, and the rise in gold will certainly increase the value of the rand, and everything valued in rands, such as US gold funds concentrating on S. African gold stocks, valued in rands and reported in dollars. This will give these funds a double whammy up when the time comes, just as they have suffered on the down cycle.

REIFY.. I agree with your conclusion. For the last two - three years, gold rallies have coincided with the 30 year bond rate going up, and decreasing rates have usually predicted lower gold values. Lately, this has almost been a daily indicator as if the world trading of US bonds is signaling the value of the dollar, and inversely the price of gold. In the last three weeks, the rate seems to change direction daily as if someone is entering the market very often to keep the rate down ( bonds up ) when the free trading market is pushing it up ( bonds down ) .

Many useful tips on breaking into bank vaults can be found in Albert Spaggiari's account of how he and his team of specialists broke into The Socit Gnrale bank in Nice through the Parisian sewers and made away with a fortune:

The Sewers of Gold by Albert Spaggiari Granada Publishing 1981.

The following quote from Spaggiari himself, a bit of an adventurer:

" I like all kinds of women - especially brunettes, blondes, and redheads. I'm also fond of animals. All kinds of animals, but mostly the ones that are hunted, because we share the same fate."

Aura Tora! Tora! Tora!


Librarian to the Merchant Adventurers and Privateers of Kitco

Mike Sheller......Regarding your Gold advertizement Program post:

What about a statement form the connected cyber GoldBugs.
( eg ) Suppose that we decided to have a Gold Day. And on that
day all The GoldBugs purchased Physical gold, say half on the
open and the other half , just before the close. No one could
accuse us of market manipulation, as we would publicly
announce the date of the Gold Day. Suggest we purchase
from KITCO, as a token of our appreciation for their support.

Everyone concentrates on US or world economic statistics, the words of Greenspan and the market saving moves by Rubin.
The supposed huge amounts of money going into the market is the other point of over concentration.
Smoke and mirrors is what most here seem to agree upon. Don't any of you guys see that gold is cheap?
Most seem to agree that this house of cards is about to fall, but no one seems to buy gold or gold shares, the charts signal this and that and create other problems for you.
Just a bunch of fuddy duds with nothing to do but blabber on.

TIRED GOLDBUG: If you learn what to read and what not read I find you can learn a great deal here. Don't get tired so easy. Kitco provides the best investment board on gold around these parts my friend.

Larryn: You've got it right sir! If gold goes to $400 or $500, the gold stocks will soar no matter what the Dow does. Gold and gold stocks are MUCH CHEAPER today relative to the overall market than they were in 1987. Dow/gold ratio was 6 going into the 1987 crash; today it is 24. Gold and gold stocks experienced a strong bull move over the 1985-87 period; now we are in the 19th month of a savage gold bear.

December gold down 40 cents; Joberg off a tad. Gold stocks very cheap, but will not begin a sustained up move until volume picks up a lot from current depressed levels.

Dec.Gold still down .40 @ 3-2-5 ( what a way ta start the week,3-2-5 that is ) Malaysian KLSE had its secong big up day in a row, up 7.07%...Hang Seng up up 1.675....Nikkei 225 basically flat,down 0.09% and Taiwan only Asian market with a large ( 2.49% ) loss....Europe modestly down..Weather: Beautiful early morning sun on the North Atlantic ocean...

Hang Seng up 1.675= 1.67%

GEORGE COLE: Hi George. In your response to LarryN moments ago you raised a good point about the Dow/Gold Ratio being only 6 during the '87 crash. If I had been using the DG Ratio in those days I like to think I would have been smart enough to have just ignored the whole 1987 event. Tough to do when you are in the middle of it, but being aware of a ratio of 6 would have made it a lot easier.

TED: Good Morning!. It would have been OK to lie to us and say gold was 324.99 Everyone would have understood. Outside the Kuala Lampur Stock Exchange there must be a yellow sign that says, "Dipsters at Work, DRIVE SLOW"

Mornin Donald! Yeah, pretty slow goin in the markets so far today...I notice the dollar is generally weaker and wonder if Greenspan's speech is partially behind this??? How's your weather this AM?

PETRONIUS: Thanks for the post at 00.02. China is learning that the Market is the Master of us all. Greenspan could be faced with the same dilema soon. It further confirms my feelings that we are on the threshold of a serious "Financial Event".

TED: It is 65F and cloudy, seems we had a shower during the night and ground is still all wet. We need a good steady rain.

APH/NotaGoldbug:
It seems as if there has been a high correlation between the Dow in 87 and now. Following this thinking, we have another week or so to go. While its always possible for the similarity to continue, we all know markets tend to fool us just when we have them figured out. Would like to know your Ewave analysis. Could the correction already be complete, with the minimum ABC flat that started on 8/18 and ended on 9/5. Although the Dow did not make it back to the 8/21 A wave top ( failure? ) , the broader indices did.

Ted: Our Sunday paper's travel section had some spectacular photos of ocean views from the Cabot Trail. I thought of you and I envy you and your beautiful Cape Breton Island.

SCHIPPI: That would be a nice piece of a larger promotion ( Gold Day ) RJ: I have a shipment of these dynamite soup ladles coming in from Beijing in a few days. I can see the sweat glinting on Greenspan's forehead now.

US Nuke sub entered Hong Kong, Chinese waters. POLARBEAR, you still around, what do you think? Pretty soon I'll believe the NWO is here!
Paradigms, paradigms, anybody want some used paradigms?
http://www.yahoo.com/headlines/970908/news/stories/sub_1.html

Mornin Uris ....and yes, Cape Breton does have some spectaculas scenary!
Have been around the Cabot Trail many times and the most interesting place near it is a small hamlet at the far tip of Cape Breton called "Meat Cove"....When a friend first took us there she said,as we were approaching Meat Cove, "now I am taking you to the end of the world" and that's exactly the "vibes" the place gives off!.....spookie....

Dec. Gold down 1 dollar @ 324.40 ( I'll take that over 3-2-5...Donald ) S+P futures up .60...No longer sunny!

Mornin Mike! TGIM ( :. (

Hey Ted ..... Thanks for the mail on the weekend. Just got home from
the donut shop and gonna catch some shut eye.
Japan is selling more U.S debt and buying gold but like the Aussie's selling gold ,you won't hear about it for a few months.IMHO

Last Updated: 6:33cet 8/9/97
Waigel rejects proposal to delay EMU 5 years and fix EU
exchange rates

BONN ( AFX ) - Finance Minister Theo Waigel again rejected a proposal by Kurt
Biedenkopf, Christian Democratic Union chief minister of Saxony, that the
introduction of the single European currency should be delayed by five years and
exchange rates within the EU fixed for five years before EMU.The most important
issue is to implement all measures necessary to meet the EMU convergence criteria,
Waigel said at a CDU/CSU meeting on the budget yesterday.The continuous
discussions on what will happen if the criteria are not met serve no end, he said.

In an interview with Bild am Sonntag newspaper, Biedenkopf said exchange rates with the EU
should be fixed for five years before monetary union, and the euro's launch delayed by five years to
allow political union to progress before the final launch of the single currency.Biedenkopf made a
similar proposal in July, at which time Waigel said a dely in launching the single currency would
amount to the death of the project.

Anyone: Which gold stocks are part of the S&P 500?

IMF to double cash available to central
banks

MONDAY SEPTEMBER 8 1997

By Robert Chote in London

The International Monetary Fund has agreed to double its $28.5bn
overdraft facility for central banks, resolving an argument between
industrial and developing countries that has dogged the global economic
watchdog for the last three years.

The decision, taken by the IMF's board will provide countries with an
extra cushion in the event of balance of payments problems. This should
ease pressure for trade restrictions or the need to squeeze economic
growth when countries face problems such as falls in export prices.

The move involves allocating 21.4bn "special drawing rights" ( SDRs ) to
IMF member countries, each worth about $1.36. This "paper gold" allows
central banks to borrow foreign exchange reserves at interest rates
available only to the most creditworthy countries.

Each of the IMF's 181 member countries will end up with SDRs worth
29.32 per cent of its "quota". Quotas are the subscriptions that determine
each country's shareholding in the fund, roughly reflecting its importance in
the world economy. A fifth of members have no SDRs, having joined since
they were last issued in 1981. The UK will get the smallest increase; it
already has SDRs worth nearly 29 per cent of its quota.

In an acrimonious disagreement at the IMF's 1994 annual meeting in
Madrid, managing director Michel Camdessus proposed an
across-the-board allocation of SDR36bn, with the backing of developing
countries. The Group of Seven industrial countries insisted the allocation
should be limited to SDR16bn and skewed to countries with few SDRs.

Mr Camdessus thinks countries need extra reserves because of expanding
world trade and capital flows. But the G7 disagreed. Germany also fears
that more SDRs could fuel inflation.

When the IMF's ministerial committee last met in April, the disagreement
had narrowed. Mr Camdessus backed an SDR22.4bn allocation, while the
US and Germany wanted no more than SDR20bn. Compromise proved
impossible, because the US also wanted a satisfactory agreement on
proposals to increase countries' quotas. But it has now decoupled the
issues.

Mr Camdessus wants to increase quotas by 55 to 65 per cent, arguing that
the IMF's capital has shrunk 70 per cent relative to the world economy
since 1985. But the US insists the quota increase should be no larger than
35 per cent.

Hopes of an agreement on quotas before the IMF's annual meeting in
Hong Kong later this month may rest on a meeting of senior G7 officials in
Paris today.

There is more agreement on the way in which the quota increase would be
distributed. Most would be given to countries in proportion to existing
quotas, with the remainder used to reflect countries' changing importance in
the world economy or to rectify anomalies from earlier distributions. With a
total value of just under $200bn, quotas determine country's voting power
in the IMF and financial resources to which it has access.











 Copyright the Financial Times Limited 1997
"FT" and "Financial Times" are trademarks of The Financial Times Limited.

The paper losses ranged from a colossal 69.2 per cent fall for Prime
Minister Mahathir Mohamad's son, Mirzan Mahathir, to a 19.2 per
cent drop for the Yeoh Tiong Lay family. Overall, the losses average
out to 45 per cent.
http://www.asia1.com.sg/biztimes/pages/nfrnt01.html

...if he really believes that...will he retaliate?
Dr Mahathir accused James Baker, the former US treasury secretary
who later became secretary of state, of not wanting South-east Asia
to emulate Japan's rapid economic expansion of the 1960s.

"There has been always talk that we do not want to see any more
little Japans. This was actually said by Mr Baker to the Japanese. So
the Japanese are not supposed to help the emergence of little Japans.
Obviously, there are some people who are not happy that this has
happened," he said.-- AFP
http://www.asia1.com.sg/biztimes/pages/nseas03.html

...I wonder what Mr. Mitsuzuka's definition of 'temporary' is...a century? Will they buy US bonds?
Mr Mitsuzuka said the rise in the current accoun t surplus is only a
temporary phenomenon,

Japan's merchandise trade surplus for the first 20 days of August rose
236.3 per cent on the year to 233.106 billion yen ( S$2.94 billion ) as
the yen weakened against the dollar and automobile and electronics
makers boosted exports to the US and Europe, the Ministry of
Finance said yesterday.
http://www.asia1.com.sg/biztimes/pages/nasia04.html

IDT -- Here are the stocks that are in the SnP 500 and are mining stocks;

AR

ABX

BMG

CYM

EC

ECO

FCX

HM

N

NEM

..vote of no confidence motion will add to political instability & continued financial ruin...
http://www.bangkokpost.net/today/0809_busi03.html

Comex: Gold down 1.70; silver down 2.5 cents; and PL down 3.40 ...S+P futures up 2.25....Mornin M.Graves! Good afternoon JIN!

The Korea Times warned of a "possible currency
crisis".

"I don't agree with some allegations that the South
Korean economy is in crisis," Mr Kang told the
Sunday Chosun after pledges last week by his
ministry and the central Bank of Korea ( BOK ) to
release five trillion won ( about HK$39 billion ) and
US$8 billion to banks to ease the liquidity crisis.
http://www.scmp.com/news/template/templates.idc?artid=19970907235440049?=biz&template=Default.htx&maxfieldsize=2197

Dow up 43....XAU down .52

RLM - The correction may or may not be over. The problem with E wave is you don't know for sure where you're at until it's over. You need more indictators. I don't think the correction is over until the Sept S&P trades over 955.

Puetz: With gold still in the doldrums there is very little chance of a market crash in the near future. As long as the gold bear continues, stock declines will be modest. I had been looking for a drop to Dow 7000 in October. But if gold keeps sinking, I doubt we will go below 7500.

Bank of Portugal rules out gold sales for now.

http://biz.yahoo.com/finance/97/09/08/y0023_z00_12.html

London Bullion Marketing Association ( LBMA ) is best described as a riddle wrapped in a mystery inside an enigma. Daily gold trading nearly 50% yearly production. Who & Why?
http://www.gold-eagle.com/gold_digest/baron907.html

PM down in early trading, spreads hamper gold.

http://biz.yahoo.com/finance/97/09/08/y0023_z00_14.htmls

Sugar,coffee, cattle up, all other commodity futures DOWN.

http://www.dbc.com/cgi-bin/htx.exe/dbcfiles/curcommt.html?SOURCE=core/dbc

Where did everyone go? I miss your words of wisdom!

30 year Bond yield @ 6.621

Ted,
over here,klse seem wild.shot up in 2 trading days!Gained a bits in stocks.still play cautions in gold market.looked liked the forex calm down a bit in s.e asia.bhats ,ringgits and rupiah sboth gained back the ground.physical seems cheaper here.the retail price a bit better dued to scholl holiday ,....sell high and buy back low next day...quite good excercised.IF , THE SITUATIONS GETTING BETTER will short again for stronger currency.......gold looked soft......let see...
these few days s.e asia a bit calm cause the g_7....and a meeting in hong kong around mid sept abt the forex crisis....dont know what happeened.just followed the wind blow..........

BOMBAY, Sept 8 ( Reuter ) - The Reserve Bank of India's decision to allow seven more banks to import gold will push down
prices marginally in the domestic market, industry officials and traders said on Monday.


The currency factor along with seasonal demand during a series of religious festivals ahead could see the market move up in
coming days, dealers said.

``Gold prices may bounce back, looking at rising seasonal enquiries and a firm trend in the dollar against the Indian rupee,'' said
Babubhai Jain, a leading Bombay gold dealer.

``Short-term trends for gold prices will remain firm but the long-term trend again depends on movements in the world market,''
Jain said.
http://biz.yahoo.com/finance/97/09/08/y0004_z00_6.html

Where did everyone go? *I* went to class.

Could grab 40 winks between posts eh? The wife comes in every once in awhile and says "You are worthless!", that keeps me awake and builds my goldbug *self-esteem*. BTW Most seem to see stocks up, gold down, +low # of postings; what do you think, the gold doldrums before the storm?

Roebear: It is the quiet before the something. It is quiet all over the "gold" net. I keep track of a dozen juniors on SI and they are dead or contemplating conspiracies by company officials. Other sites are discussing transit strikes in California. Clearly "bug" interest is low at the moment.

Check out the following link http://www.american-computer.com/roswell.htm This sort of stuff makes me wonder what military tools Uncle Sam really has in his back pocket, and what he is doing with them. Does this means that the U.S. could be the pre-emminent supplier of technology for the next hundred years? What are the ultimate consequences of this information entering the public domain? Will the mass realization of this affect the economy, the price of gold? Inquireing minds want to know.

..assisting A. Greenspan's vigilance on inflation...oh Allan..Allan...
1 ) Airline ticket prices rising
http://www.usatoday.com/news/nds31.htm
2 ) Bay Area transit
Members of BART's two largest unions last week rejected an offer to
raise their salaries 3% a year for three years. Union members
reportedly are seeking annual raises of 6.5%, 5.5% and 5% over the
next three years.
http://www.usatoday.com/news/nds3.htm

All Quiet on the Golden Front indeed. Came near to selling a few of my metals positions, actually hit the trigger but I was on the wrong account so I got an error message. I took it as an Omen!; ) Besides, we have company, others are also waiting to buy things cheaper
http://www.tampabayonline.net/news/news100g.htm
Perhaps the deflation monster is coming or more likely that market troll that likes to destroy everyone best laid plans?

Steve Williams' chart, "Comparison of Crashes":

http://home.sprynet.com/sprynet/fiendbea/stevewil.htm

MOSCOW -- Russia said on Monday it was concerned by an
Israeli commando raid in south Lebanon last week and urged both
countries to avoid steps which could cause more tension in the
volatile region.

Twelve Israeli marine commandos were killed in a clash north of the
city of Tyre on Friday and one more was missing.

"In this tense situation we stress once again the need to respect
Lebanon's sovereignty and territorial integrity," the Russian Foreign
Ministry said in a statement.
http://www.russiatoday.com/rtoday/news/06.html

LSteve 12:02 - Check out http://www.earthpulse.com/haarp/index.html and
http://www.geocities.com/CapitolHill/1606/akhaarp2.html. I posted this information once before. Technology based on the workings of Nikolai Tesla, I believe.

...assisting A. Greenspan spot 'inflation'...
The oil market has been under pressure all this year,
falling 25 per cent from its January highs. But now things
could change. As the oil market did this time last year, it
could roar higher on fears that the world might run out of
heating oil should a cold winter hit the northern
hemisphere.
http://www.afr.com.au/content/970909/invest/invest2.html

The gold lease rate is up an appreciable notch today. Interesting, given how quiet the spot and futures markets seem to be.

I understand that the recent decline in BGO's price is attributed to a materially reduced mineable ore, as indicated in the scoping study, in comparison to BGO's claim of 24+ Mil. ozs. au + 7 Bil. lbs. cu. Another reason is that the scoping study indicated a long project life with a requirement - in latter stages - to pipeline slurry ( ore muck for further proceesing ) 160 km west to a Chilean port that requires some upgrading. The project economics are more complex than originally 'sold' by BGO to investors. The take-over premium is now deflated. AZS ( VSE ) , with 51% control of the Cerro caslae project, is a better deal for the money - I switched most of my BGO to AZS when BGO was $1 higher in price. ( BGO owns 33% of AZS and controls its affairs. )

AZS is a better play simply because it offers the best price/value on the Cerro Casale find even after discounting to a 'bankable study' the mineable ore to about 10 Mil ozs. au at total cost ( net cu credits ) of ( say ) $200/oz. AZS share is about 5 Mil ozs. ( 51% ) at about $100 profit/oz after taking into account low gold prices and early heap-leach production that does not require a pipeline transport system and taxes.

So the US $500 Mil profit ( AZS's 51% portion ) in the ground at Cerro casale ( at todays prices ) attributed to AZS is much higher than the current market cap of AZS = 40 Mil shares @ CDN $6.70 = CDN $281 Mil or U.S. $202 Mil.

I may also add that even if gold price remains low and there is no takeover of BGO it would be hard to pass-up the Cerro Casale find as an asset play. The gold+copper at Casale may have a value of at least ( 24 Mil. ozs. au + 7 Bil lbs. cu US at $25 per oz. of au 'net' = ) US $600 Mil with AZS owning 51% or US $300 Mil. or U.S. $7.50 / share or about $10 CDN per share value.

Another benefit to owning AZS is that it also owns 51% of the 'Three Amigos', ( Jotabeche, Romancito, Cerro Roman ) three deposits in the Alderban range ( that includes Cerro Casale ) which BGO has claimed may form a network of open pittable ( low cost ) mineable gold deposits within a few km of each other.

AZS stock price at CDN $6.70 not only is fundamentally undervalued in relation to its 51% ownership of the Cerro Casale deposit but clearly not valued in respect to the Three Amigos at all.

I might add that Nesbitt Burns ( Gold Review, Aug5/97 ) , the now gun-shy analysts who did due diligence and sold Bre-X to an unsuspecting public, have a speculative 5 rating on AZS ( BGO is a 4 with high spec component ) with a target value for AZS of CDN $16 and CDN $4.14 with a 3% discount rate applied to a more conservative minerable gold reserve and copper credits at 90 cents per lb. with spot gold price at $321 and CDN $10.42 at a zero discount rate.

In summary, don't invest in BGO or AZS for an impending take-over. If and when a take-over is tendered we will see good price action. Invest in AZS or BGO for the long-term expectation that gold price will recover - however modestly - and that the economics of the Cerro Casale project will be better tuned to maximize daily ore throughput and more productive gold/cu recovery technologies without building a pipeline or upgrading port facilities. Although we may see 10 Mill oz. au project after the final 'bankable' study we at least will have a credible mine project that is worthy of an asset sell-out or take-over of AZS by a strong financial partner.

Cheers

...running to nearest 'paper shelter'....is the 'new shelter' any better?

LONDON, Sept 8 ( Reuter ) - U.S. fund managers are switching out of equities into Treasuries as an increasing number of
managers anticipate a rise in the Fed funds rate over the coming year, a survey published on Monday by Merrill Lynch said.

The survey of 41 U.S. institutions managing funds worth $1.88 trillion, conducted by Gallup between August 28 and September
3, showed buying interest towards Treasuries was strong, with buyers outnumbering sellers by 20 percent.
http://biz.yahoo.com/finance/97/09/08/y0004_z00_2.html

...running to nearest 'paper shelter'....is the 'new shelter' any better?

LONDON, Sept 8 ( Reuter ) - U.S. fund managers are switching out of equities into Treasuries as an increasing number of
managers anticipate a rise in the Fed funds rate over the coming year, a survey published on Monday by Merrill Lynch said.

The survey of 41 U.S. institutions managing funds worth $1.88 trillion, conducted by Gallup between August 28 and September
3, showed buying interest towards Treasuries was strong, with buyers outnumbering sellers by 20 percent.
http://biz.yahoo.com/finance/97/09/08/y0004_z00_2.html

Since gold did not react favourably to the turmoil in the Asean currencies of late we can now expect that gold price will not pick-up 'sufficiently' in 97Q4 as anticipated. This is due to gold's higher reletive price in Asean currencies and the inelastic price of gold for jewelry demand will hurt the prospects of a "strong" recovery of gold price lead by Indian suncontinent demand.

We need a media spin campaign to inform the retail investment community - outside of die-hard goldbugs - that gold and PMs are worthy investment candidates ( at these gold prices ) for asset allocation and diversification - something that Vierserre had been addressing in some of his early posts.

In this Age of Aquarius with New Age economics promoted as a panacea to all our economic ills it is clear that a marketing campaign is desparately needed to counter the negetivity induced by media spinners who feed off the vested opinions of professional market players that are holding the gold market hostage in the absence of benign neglect from retail investors.

Cheers.

The longer the US
economy continues to overshoot the Fed's growth target, the greater the risk that inflation and interest
rate risks will take both policy markers and the financial markets by surprise. As I see it, the odds of a
monetary tightening are once again starting to build, and I still expect the federal funds rate could rise
by as much as 50 basis points in the second half of 1997. That spells nothing but risk for an
unsuspecting bond market, and I see little reason to alter our year-end target of 7% to 7.5% The
cyclical clock is ticking.
http://www.ms.com/gef.html

Gold stock selling pressure intensifying. The low volume action these last few weeks is very bearish. XAU down 2% and HUI off 1%. XAU volume still modest for the most part, but ABX picking up. Looks like we may be in for another selling climax before long. Hopefully this will be the last one.

Well Kitcoites, I'm here to bid my final farewells to you. Apparently, some of the "regulars" here, feel that censorship is a much more important American ideal than open discourse. Ironic considering last evening's political debate. Some have complained to Bart. They seem to want to maintain a narrow, monolithic, single minded type of discussion which leaves no room for a different style, satire, strongly stated divergent views, etc.

I now have no access from either of my 2 personal accounts, in spite of requests to Bart to re-instate said access. This should greatly please the Site Nazi's who might feel comfortable in a place like North Korea, Cuba, or the Soviet empire of old. My final farrewell comes from an access point which I won't re-use.

When I review the comments of the past few days, I'm curious as to what my transgressions were, that warranted this level of censorship? My final posts here last week, ( 9/3 ) , were posts of "site links", a civil discussion of metal and market trends relative to the current economy, answers to questions some people posed re coins, composition of AE gold pieces vs. "pure" gold coins, questions re the "Crash" scenario, I initiated the discussion on silver price trends relative to digital photography, vs. increased use in developing economies like China and India. I was making every effort to respond positively to those who requested I moderate my tone and style, and I did extend an apology to anyone who may have been offended by too much editorial diatribe. None of this was contributory to the site??

Look Kitcoites, I admit that my initial posts here were somewhat shrill, condescending, adversarial, etc. But there was satirical humor in there as well, and certainly I gave rationale for the points of view. Whether you agree or disagree with the opinoin, the style, the personality of the poster, etc, is censorship REALLY what you want here?

I don't mean this final farewell to be self serving, so I won't carry on with a long sermon, however, I would leave Kitcoites who have done this, with a final thought.

All the analysis about gold and the markets will be moot, if you continue in this mindset. Why? Because when bad times do come, your gold could easily be confiscated by Uncle Sam. If you can so easily surrender my right to speak, you surrender your own rights as well. If you can so easily trash a give and take debate, so easily trash someone elses freedom, you limit your own freedom. You set the stage for being a stooge that the government can run over at any time. A mindset that believes in censorship, is a mindset that can be enslaved at any time. The thoughtful folks here who understand what our country is about, know EXACTLY what I'm speaking of.

The right way to deal with speech you find offensive, is to counter it with speech of your own. That's the thinking, freedom loving, adult way to do handle it. Running to the site provider to demand censorship, is a ggod way to put yourself in intellectual chains. It's akin to all the politically correct extremist folks who are constantly running to the Govt. demanding censorship of this or that. This is the kind of world you want?

I am not bitter or angry toward those who have done this, but I am saddened and disappointed. I enjoyed the site and will miss many of the posters here, even my old friend Puetz. To all of you who gave words of wisdom, thank you, you know who you are. To those who believe only certain voices, styles, and points of view should be heard here, I'd get busy if I were you, studying what our nation is all about. You have no idea how INCREDIBLY dangerous you are to a free Democratic society.

Goodbye all.

LurkingGbug

BOB: Thanks for the helpful comments on BGO and gold. There is a major problem with BGO. If the deposit is there, the stock simply should not be at this level, particularly when considering its other assets including the Tres Amigos, Quebrada etc. I notice that there is still relentlas selling coming into the stock. As to gold, the equities do not look good at all with NEM, ABX and PDG breaking down. The earlier run-up in these stocks may have been attributed to asset reallocation by general fund managers in expectation of a short-covering rally which now seems unlikely, particularly with the recent news on gold dishoarding in Asia and, as you mentioned, the lack of gold participation in the Asian currency turmoil. Gold looks very heavy.

If what LurkingGbug said is true and others in this group forced Bart to censor
his contributions I'm also wasting my time with this group.. I Just cannot believe
it. Bye all..

...comments from A.C. Moore , Chief investment strategist..
At this point, the internal market structure has not improved enough to suggest that an important low has been reached in the
Dow," said A.C. Moore, chief investment strategist at Principal Financial Securities. "New highs by the Value Line, Nasdaq,
and Russell 2000 indexes provide continuing life to the tape, but do not represent sustaining leadership. Leadership remains the
domain of the likes of Procter & Gamble, Gillette, and Coca-Cola, which are currently leading to the downside. In fact, the
poor performance of the highest-quality issues underscore a technical divergence that is taking place in volume and price, which
may prove problematic to the primary trend of prices."
Moore notes a divergence between NYSE trading volume, which has been declining, and the cumulative difference between the
number of advancing and declining issues on the Big Board, which has been rising. His studies indicate that, when volume falls
four weeks or more while the weekly NYSE advance-decline line moves to new highs, trouble lies ahead. "Looking at the 1975
to 1991 period, there were 10 such occurrances," he observed. "In nine cases, price declines of 15% or more followed. What
this type of volume sell signal suggests, is that, although stocks continue to rise, momentum is lacking, leaving the rise in price
vulnerable to a decline."
http://www.usatoday.com/money/mphotof.htm

BART - RE: LurkingGbug farewell. Can you confirm or deny what he alledges regarding being restricted? I believe LGB has shown that he can enter a constructive and spirited posting dialog, regardless of his first rather acidic and abusive posts. You are the moderator. If you feel that any of us has a negative impact on the site, then its your call. I vote to keep LGB with us since he *has* toned it down and shown that he can listean and take advise.

Does anyone else feel that LGB is now an contributor rather than a detractor from this site's dialog?

Let's let LGB stay on-line. Even an idiot deserves to be
heard; I know personally I have learned a great deal from
posts in response to his.

Getchell, Euro-Nevada, and Franco-Nevada are doing well today, swimming against the tide. Hope my FDPMX ducats are still buried in those fine companies, but who knows... George Domolky, maybe... Hey. that 12:12 post by Leland is fine ( 'hood lingo ) . Take a look at the way the years 1929, 1987, and 1997 ( with a little 1937 ) follow an eerily similar path. If you believe in that sort of thing. The great thing about gold investing is that I've got so much less at risk than I did a few months ago...if you know what I mean.

So what's with Princess Di? I can't help but correlate that funeral procession with the Old Testament book of Esther, in which prime minister Haman was humbled as he was forced to parade his enemy Mordecai through town in honor. Such was the fate of Charles.

Poor Rush Limbaugh was in trouble today for suggesting that a mother who left her sons to go around the world making whoopy with a rich playboy ( my words, not his, but that was the general idea ) would not always have been deemed to have died in honorable conditions. He did laud her charitable activities.

So here's today's Kitco poll:

Princess Di was

( 1 ) A saint, real, human, altruistic, one of the great women
of our time, or
( 2 ) A complex person with a mixture of strengths and weaknesses like the rest of us,
( 3 ) A ditzy blonde fornicator
( 4 ) None of the above
( 5 ) All of the above

Allen, I'm with you on this. LGB has generously contributed his knowledge on several gold, bullion and other PM matters. He has not struck me as being an idiot at all. Am also more than a tad concerned if lgb's allegation is true.

Free Speach at Kitco or there will be no Kitco.

Well,
looks like inflow of money into stox continues, reversing the previous
decline
http://biz.yahoo.com/finance/97/09/08/z0000_z00_19.html

BTW, LurkingGbug could have been anoying at times but that was not a
reason to get rid of him. At least he's functioned as a lightning rod for
our frustration that the gold does not move. Now we have to beat on each
other.

I have an outstanding complaint against BGO that I presented to the OSC ( Ontario Securities Commission ) about the material discrepancy of information disclosed by BGO in May about the '24+ Mill. oz.au' Casale project and the subsequent July 2nd Scoping study that greatly diminished the minable gold and copper credits to about 15 Mil ozs.

BGO pumped the stock with huge reserve figures and 'open at depth and strike' type disclosures that fed the stock price build-up and support during these difficult gold price times.

It is important to remember that a Scoping study leads to a preliminary study that leads to a 'bankable' study that is presented for finance solicitations. At each stage of the 'study' process mineable gold is usually scaled downwards. If the mineable gold had been reduced materially to 15 Mil ozs. at the Scoping stage what would the mineable gold end up at the 'bankable' study stage ?

Therein lies the essential problem with BGO and Casale. Investors no longer trust the disclosures released by Clive and the boys in Vancouver.

In order for BGO to turn-around we need to see the Vancouver management team act like responsible intermediate gold miners instead of rock and roll VSE explorers.

The BGO poison pill gives Clive and his management co-horts an undeserved perk at the expense of BGO shareholders. Clive seems to believe that he deserves to have exceptional protection and stock options based on 1996 shareholder value accretion statistics. The fact is that most BGO shareholders are recent vintage and many ( like me ) are underwater. I can't get excited about pre-1997 shareholder value statistics indicating how Clive managed to build a five-fold increase in BGO shareholder value.

All the good news is priced in with the bad news and the result is that BGO is valued at $6.50 CDN almost 50% below its value of one year ago.

The solution ?

BGO shareholders need to determine if Clive is the man with the plan or perhaps a mine-engineering production manager would be better suited to lead the company in the development of Casale instead of relying solely on an asset sellout or partnership situation.

Unfortunately, BGO shareholders will tow the line and let the promoter lead a company that no longer needs promotion but astute mine management at the top.

Cheers.

Hope LGB continues to post. He has much to contribute.

XAU now down almost 3% led by PDG and ABX. HUI off only 1.1%. Very heavy volume in ABX today.

I am sure that the few voices ( if LGB has indeed been censored ) that pushed for his censorship ( let them remain anonymous...no need for further recriminations ) will be overwhelming shouted down by the many who will ask for his return. Ted ( your voice would appear to carry weight here ) ?... Was Kent State all in vain? Shall any voice go unheard, especially LGB, who has apologized in no uncertain terms...

Bart, I can't believe you would consider banning LGB. I've said it before and I'll say it again, you've got it ass-backwards, ban those jerks who respond to abusive posts, not the writers of the abusive posts. Abusers will go away if nobody plays their game. Why is that so hard to understand??? How about a graphic example! It wasn't the photographers that killed Princess Di, it was those mindless trolls that buy the tabloids. If nobody bought the tabloids there wouldn't be any photographers. Sure, I know we can never get rid of mindless trolls, they're everywhere, but you don't have to let them control this site. Just to make it perfectly clear:
Abusive Posts = LGB = Photographers
Responders to above = Mindless trolls

nomercy: Thanks for the last post, it renewed my spirit.

This is how it is going to go:

1. Stocks will trade in a range of 7600 to 8000 for a short period. They will then turn down. As soon as people begin to realize what's going on, they will rush out of stocks and move into bonds. This increased demand in the bond market will raise bond prices ( lower yields ) . Foreign holders of US securities will take advantage of these higher prices and jump out as fast as they can. The panicked US investor, who lost half his investment before he could get out of stocks, will see his money further erode in the bond market. At that point GOLD WILL SOAR.

On a down day the public debt, you can count on it, will be you know
where:

http://www.publicdebt.treas.gov/opd/opdpenny.htm

Bart,

Another vote in support of LurkingGBug's continued access ( wouldn't it be irritating if he were right after all? )


"If you are part of a society that votes, then do so. There may be no candidates and no measures you want to vote for...but there are certain to be ones you want to vote against. In case of doubt, vote against. By this rule you can rarely go wrong.
If this is too blind for your taste, consult some well-meaning fool ( there is always one around ) and ask his advice. Then vote the other way. This enables you to be a good citizen ( if such is your wish ) without spending the enormous amount of time in it that truly intelligent exercise of franchise requires."

R.E.Heinlien

I found the post to January 1997 article re: London bullion exchange very interesting. Thanks, whoever, for the post. There is definitely a rational intent behind that disclosure. Possibly those in London felt that other institutions ( CB's ) were inflating their importance in making the market. Particularly with regard to gold's supposed has-been status. Regardless of the CB rhetoic, there must be a cadre of financial powers who do not buy into the 'paper' kingdom and know that there will be hell to pay later. I once read a mildly successful business man quoted as saying that after a certain amount its not about money, but about power. I can imagine that people with the power to throw gold around at 30 to 150m oz a day have a concern not so much with the currency values, but with preserving, enhancing or projecting their power positions. Still 30m X 325 is only US$10b. Even at a 5 multiple that's only US$50b. That's alot of money but no where near the size of "money" that circulates the globe in the money markets. On the other side it is all tangible ( ? ) , whereas the digits that fly about representing paper are totally intangible.

Another thought is that the gold market represents completely untracible money. Anonymity, for whatever reason. I'm sure that many a government uses gold transactions to cover the paper trail of their covert operations.

Nuclear weapons transportation is a big problem. Particularly because these weapons are very compact and they emit gamma radition. A stationary satellite with a scanning point-appeture gamma spectrometer can detect and locate these sources very easily. It would be like watching fire flies moving in slow motion on a black background. Because stationary tactical weapons are poorly sheilded they are easy to locate. I wouldn't be so concerned about the US being bombed. I would put my bet on a second or third world country ( such as India vs Pakistan, No Korea vs So Korea, etc ) . I believe that we have a very good idea about where these weapons are based on this gamma emission ( if they are out of government control ) . I must say that we have been very fortunate to have not had major terroist actions in the US. Part of it is because of the shear incompetency of many of the agents. Such as the story about the middle-eastern agent who was driving down the NJ Turnpike with a bomb in full view in a gym bag in the back seat. Police stopped him for swerving while looking at a map, trying to get to New York City!

I believe that Bart has the right to ban anyone he sees fit. This is HIS RIGHT. He establised a code of conduct ( see Kitco netiquette guidelines ) Those who wish to post here should follow his rules.

Bart, I have read your guidelines and find them reasonable. I appreciate you providing this discussion site.

All ( especially Mr. Bart ) :
I think that the recent posters have missed the point regarging LGB......it is not a question of of someone presenting an inverse view of the gold bug mentality.....I wish it was JUST that, as it would help to check everyone's views.
But this is NOT the case here, LGB has repeatedly insulted, hazed, and attacked the character of various valued longtime contributors to KITCO. This is NOT what I would define as healthy opposition nor contribution to a discussion group. With any repeat of his past ettiquette, I'd also slam-dunk his a@# out.

Thank you Bart once again for your hospitality, and your perenial objectivity.

I am usually against all forms of censorship, but in this can I can live with LGB being banned. In my mind, this site was, is and should be dedicated
primarily to the promotion and dissemination of information about Gold and PM's, with the bias naturally being on the positive/long side.
This should not be a site to constantly debate the merits of owning Gold,
which many times end up starting long winded and useless arguments.
There are very few sites dedicated to promoting Gold, in these very difficult ( PM's ) times, with just about every financial advisor / economist bashing Gold. Kitco STANDS OUT in this regard.
SIMPLE - If you feel uncomfortable about investing in Gold, then DON'T, you don't need Kitco participants to tell you that.
If your a real Gold Bug in your heart, then you don't need a financial advisor to tell you to dump all your PM's and buy stocks, Kitco is the place for you.

IMHO he made many reasoned and worthwhile contributions to these "discussions". Obviously some of his incisive observations struck home amongst our more frustrated brethren in these diffult for gold times as evidenced by their own often shrill responses.This forum needs its LGB's to keep us on our toes..as also evidenced by the many excellent resonses his remarks have elicited.

Lurker: An interesting scenario! Stocks tank, bonds soar, bonds tank, gold soars. Could you elaborate on why foreign holders of treasury bonds will liquidate heavily on the rally you forsee?

XAU smashed 3% today. PDG and ABX down over 4%. HUI off 1.5%. This looks like the beginning of a real bad week. But heavy volume in ABX raises the prospect of a selling climax soon.

TO: Lurking Goldbug re: your email message:

Don't wait for a response in your email box from me. I'll handle it here.

I do appreciate being informed personally by you that you posted a message to the effect that you felt your access to the group was restricted. Why you would do it knowing full well that I would come back with a statement ( here it is ) denying that it was done, is a little beyond me.

Please explain how you were able to post your "final" statement when you were locked out. I'd also be interested in knowing exactly how you experienced the lockout. Did the "Add a Comment" no longer appear on your screen, or did it bounce back to the messages when you clicked on "Add a Comment". Maybe you were able to write in your comments, but you got some kind of message when you tried to post. Or maybe the keyboard just didn't accept any input at all. Did you know immediately that you were ( supposedly ) restricted or did it at first seem like maybe an internet thing?

Do me a favor. Shorten your handle so we can save some bandwidth here.

...market expectation = 5% Actual = 6.5% 'Spin comments'=The report was SLIGHTLY above market expectations'!!!!!!!

Consumers took out the plastic in July
WASHINGTON ( DBC ) -- American consumers took on more debt in July, the Federal Reserve Board said Monday.

Outstanding consumer credit rose at an annual rate of 6.4 percent in July to $1.225 trillion, following a 0.8 percent rise in June
and a 2.7 percent hike in May. Consumers took out more auto loans and put lots of purchases on their credit cards, while loans
for education, vacations and other purposes declined.

Auto loans rose at an annual rate of 10.9 percent in July, triggered by lower interest rates charged by auto finance companies.
The average interest rate fell from 7.64 percent in June to 6.71 percent in July, the Fed said.

Credit card debt rose at a 12.5 percent rate in July. Consumers now owe $521.9 billion on their revolving charge accounts, up
8.8 percent from a year-ago. At the same time, other kinds of debt have been stagnant.

The Fed said "other" loans, which are typically bank loans not secured by real estate, fell for the second straight month at a 9.7
percent annual rate.

The report was slightly above market expectations. The consensus among Wall Street economists surveyed by DBC was for a
5 percent increase. The Dow Jones Industrial Average had peaked at 7921 prior to the report; it closed up 13 at 7835.

Mickey Levy, chief financial economist at NationsBank, said he anticipated the credit card numbers, "but I am a little surprised
that the auto was so strong," given the weak sales reported by the automakers.
...full story was posted as link is changeable....
http://www.dbc.com/cgi-bin/htx.exe/newsroom/special/credit.html?source=CORE/DBC

*

Watcher ( 15:19 ) Re-Kent State all in vain and LGB....I stopped reading LGB ( my right ) as he became way too redundant and did not like the personal attacks but I certainly didn't care enuf to ask Bart to remove him....I'd have nothing against his return but if he does I'd like to see a little less posting on his part as I get tired of having to continually pass over his posts...this said as much of what he says,I believe in...but just don't want to hear it FIFTY times a day....Am juggling making dinner and writing this and am probably botching both but I have to say I am surprised that he was banned ( if he was??? ) and certainly don't support the ban.....but on the other hand,I don't miss him one bit!
Re-Kent State- am too rushed to say anything meaningful...Gotta run! Or I'll burn the damn meal!!!!

I believe that LGB did have his problems at first. He has repented. And after that played pretty fair. He did have interest in gold as a play at the appropriate time. Hence his participation on this site at this time. His main contention was that things aren't going to fall apart all together and there will be another day to play equities. There are a wide variety of views about the state of the mess, and so a wide variety of views about how to use gold or other PM's. I do not find that his view falls outside of many here. Hopefully he will be able to rejoin us again soon.

I have talked with a coworker about predictive statistics and will post something tommorrow with regard to lunar or other phenomena as they may or may not correlate to market phenomena. ( Puetz, I believe, places no casual role in lunar events, just noting correlations. I'm I wrong about that Mr P? )

Bart, one last thing about LGB from my point of view. It is better to make a friend from an enemy than to ostericize. Since this is a kind of redemption. And we all need that from time to time. When that occures we all sense that a community can go from fighting to caring, and have peace rather than war. Thank you for your consideration both pro and con regarding these matters.

Bart, this site is your massive contribution, to an outstanding group.

For my take on LurkingGbug, Yes, he has been acidic, and abusive at
times. No, I did not like such posts. Yet, when his posts are put up
against the vast majority of posts. His at times, were ignored by me.
On balance, all the posts come out on the positive side.

Bart you have been forced into a tough call, your site, your rules. I
accept your decision.

My position is such: When a person, struggles and supports the rights of
others. In so doing, that person will also have guaranteed his rights.

I support your call Bart. I do not like the fact that there are those
at this site, that believe that such action was necessary. Bart, I only ask that the next time it happens, take a second look. SUITS EH! JERKS!

While I don't think that Lurker was saying anything really obscene, I don't think he was contributing very much to the discussions. Face it, if everyone who thought goldbugs were nuts, posted that opinion on this site, you would have 10,000 paperbug postings for every goldbug posting and this would become a pretty useless site. Lurker made his point. Having done so, he should have moved on to one of the many paperbug sites where he and his type pat themselves on the back for being such astute financial wizards.

Bart, Thank you for your post. I assumed I was blocked because I couldn't get access from my 2 home ISP accounts for several days, and still can't, ( both always worked before and both simultaneously began giving me the "error 404" message last Thursday, in spite of any and all attempts to reload the message address ) .

Since I couldn't get a response to any of my e mail inquiries as to whether I was "banned", or why my access was denied, I made the ( apparently erroneous ) assumption that I was banned.

My earlier post ( and this one ) works because it's from a work based shared account, which I can't use often for posts. I'll work out the technical problem, and apologize for creating a misunderstanding here on your site. I do indeed appreciate your providing this excellent site, and again repeat my apologies to any and all who may have been offended. I will comply with your request to shorten my handle, and will henceforth be "LGB" ( if indeed, I am able to regain access from either of my personal accounts, the adresses of which you are aware, from my former e mails ) .

To all who were supportive of the right of free speech, and my right to post what may be unpopular views, I thank you and will do my best to stay "on topic" and polite. ( While maintaining an acerbic, analytically honest, critical wit of course! ) .

To all who applauded a "ban" on my posts, I can only repeat, think that position through again as to it's implications. I'm here to try and make a contribution that will incite thinking through both sides of some of the PM and investment issues. I am not "anti gold" or "anti PM's" as anyone who has actually read any of my posts is well aware. I have a position in PM's, and PM coins and will be adding to same quite soon.

Signed,

LGB ( not to be confused with any former feline posters )

I have no idea of who was suspected of the now disproven ( by Bart ) theory that LGB was banned. I only believed that you were a well thought of poster on this sight and I was simply appealing to a man that is by all accounts open minded and fair. It now appears that this was simply another test ( Mother Theresa/Di ) ...closer to home...that Kitcoites may freely examine their own souls! Hope you salvaged your dinner.

As for myself, I don't have the extensive knowledge of world financial markets that many have here. I am continually amazed at the insights I see posted. As an outsider and novice ( I view myself as such ) , I viewed LGB as simply stating another viewpoint. I took no offense because I wasn't the one he was confronting. I, for one, hope he gets his computer fixed and continues posting, especially so in a way that will be more in keeping with the usual tenor here.

Would some COMPUTER BUG tell me if it would be possible for someone to disable LGB's computer and/or ISP's so that he would get "error 404's" when he tried to post to this site? Bart, thanks for clairification. I believe LGB was improving his rhetoric, and was becoming a worthwhile contributor.

Now that all that is cleared up, I do have a question for the Poster Formerly Known As LurkingGbug. What are your thoughts concerning the price of Gold over the next 3 months, 6 months and 12 months? Thanks.

GC: Foreign holders will dump US securities for one of the following reasons or a combination there of:

1. Asians, one of the larger holders, are a very proud people. They do not like the arrogance of the US ( and sometimes I can hardly blame them ) .
I think it has been particulary difficult for the Japanese. Once hailed and idolized for their astounding economic success, they must now take a back seat to the florishing US ( which they make possible by buying our debt! Ironic isn't it. )
2. SE Asia needs to bring their money home to shore up their failing economies.
3. A stock market bear in the US will diminish our ability to keep buying Asian goods, removing at least one incentive the Asians have to continue supporting our economy. Also, a bear market will bring out the protectionists hiding in the closet with Ross and Pat.
4. Germany will raise rates drawing investors from US.
5. Finally, they will dump bonds because, as Jimmy Rogers says, they will tire of playing our game.

LGB:
Welcome back!!! I read your Farewell Post and all posts in between.
Without further adieu let me say once again, WELCOME BACK !!!

Dow/Gold Ratio 24.35

Well, well, too much noise about nothing! Thanks Bart for explaining
your side of the picture and thank you for hosting this site.
LGB, your apology was in order, however, your reaction showed one more
time that you are too quick in making the judgment about other people
and events.

As a matter of fact, as a habitual user of Internet you should know that
the Internet site can not deny you the access to the side ( if there is
no registration and password protection of the site ) Of course, posting
to the forum can be controlled, however, as we know now, you were not
banned. Well, continue posting, but that should be a lesson to you that
you should be more prudent when making a judgment about other people
and their motives before you accuse them of nazis censorship.
404 error happens frequently but it is your domain server or traffic
related problem.

The most incredible item on the tape today was the consumer credit
report. Any half way inteliligent economist would have said thats
enough to tank the market. It now obvious that the fed has developed the same policy as the White House. That is to window dress any bad
news. The statement was made that the reason for the increase in
automobile loans was because of lower interest rates! Fact is they financed them anyway. I am the father of six married children and I
know how difficult it is for them to make things balance. Maybe the
Federal Reserve has already forgotten what the Resolution Trust Corp.
was all about. I recently had a discussion with one of my son's friend
who is a mortgage broker. He informed me that some lending institutions
are allowing up to 125% equity on loans for their homes. What in the
world is going on out there?

Billy, your kids and many othes are still paying off the RTC fiasco...How? One way I often see is as follows: Any FHA mortgage is assessed a fee at closing in addition to normal MIP, etc. Said fee is designated as going towards S&L bailout. I found out when I refinanced into an FHA mort. and lo and behold, at closing there was a $7,400 "special handling fee" which they generously allowed me to finance on top of the $185,000 principal ( plus standard MIP ) .

September 8, 1997

TD says banks can compete even if ownership limits dropped

TORONTO ( CP ) - Canadian banks can compete effectively even if the federal government drops the 10 per cent ownership restrictions on the industry, the chief executive of Toronto Dominion Bank said Monday.

"This would allow the prospect of both domestic mergers and foreign takeovers, a potential result that should be debated fully by Canadins."

The ownership restrictions have been in place since the mid-1960s, apparently in response to a proposed bid by New York's Chase Manhattan Bank to buy TD.

http://canoe2.canoe.ca/BizTicker/CANOE-wire.TD-Baillie.html

All: Beware of these gold con men: http://www.amcity.com/orlando/stories/090897/story1.html

Fundy: True, much of the world thinks that the US is out of step, and stuck in the rhetoric of 1776. But then they have always thought that, haven't they? Even in 1776. For instance, Brits have been whining about American gun laws since before the Revolution. Who's ahead and who's behind in this case? For each of the world's democracies, we will know who's ahead and who's behind when tyranny rears its ugly head, as it is bound to do. My money will be on the world's oldest democracy. Second, it is not true that in much of the civilized world "that matters," politics begins about where American liberals stand and moves leftward from there. Nearly every European country has, and even some of the former Soviet republics have, extreme right wing or nationalist movements that are flourishing at the moment. Finally, I'm not sure where you did YOUR sampling, but the US is positively lousy with liberals!

LGB: Stick around. You're a thorn in the side, perhaps -- but this compares favorably to Hepcat's Arkansas Toothpick. I saw only one call for your banishment, and no support for it. Perhaps you might personally apologize, by name, to every person who you clearly insinuated was in the business of deliberately defrauding nave investors. That would be a much more appropriate apology than a rather insincere general one to everyone who "might have been offended," and would go far in removing any residual hard feelings that might remain, IMHO. :- )

Ted: Have you bought a metal detector, yet? If I lived anywhere near Scaterie Island, I'd have several of them ( for different tasks ) . If you're still contemplating it, here are some links that I heartily recommend. The last three are discussion forums, much like Kitco: http://www.treasurenet.com/ ---- http://www.treasurenet.com/fisher/ ---- http://www.treasurenet.com/tesoro/ ---- http://www.geocities.com/Yosemite/8527/ ---- http://www.detection.com/ ---- http://www.treasurenet.com/whites/forum/current.html ---- http://www.treasurenet.com/fisher/forum/current.html ---- http://www.floridainfonet.com/wwwfinboard/index.htm . White, Garrett, Fisher, and Tesoro are all good names in metal detecting. I will not swear to it, but beware of things like Accurate Locators. I personally do not believe in the technology ( it's very poorly explained anyway, an almost sure sign of a rip ) . Basically, "If it's too good to be true, etc., etc."

http://www.ms.com/GEFdata/digests/latest.html

See"U.S.Tick Tock" article

London Bullion Marketing Association ( LBMA ) is best described as a riddle wrapped in a mystery inside an enigma. Daily gold trading nearly 50% yearly production. Who & Why?
http://www.gold-eagle.com/gold_digest/baron907.html

Bank for International Settlements VERY WORRIED about Y2K problem.
http://www.yahoo.com/headlines/970908/tech/stories/2000_3.html

Watcher ( 17:55 ) As a matter of fact I over-cooked the "veggies" in tryin ta answer you....Tried to pass the blame off on you but my wife wasn't listening...Just kiddin!....Haven't scrolled back past your post yet to see what the "latest" is on the LGB case is....Maybe he should hire Jonnie Cockroach and F. Lee Baby for his defense....Re-Kent State and was it all in vain????...Even though "it" occurred in 1970,"it" was a product of the turbulent 60's and those days are long gone....in many ways! Maybe it's a product of gettin older but I find myself with a much more "jaded" outlook on life and "the system"....especially the present administration in the U.S.of A....What a DISGRACE it is to have Bill Clinton the first representative of my generation!!!...I see Western civilization on a down-hill course and Asia ( deservedly so ) will RULE the 21st century....

LGB - Scary, wasn't it? : ) Now imagine being unable to find a job position because SOMEONE else posted using your handle. : )

Ah, who cares? In the schema of things, none of this matters.

Hi JIN! re-11:39 post: What a two day run the KLSE has had but how much longer will it continue???....check your mail box in another hour or so..
happy trading!

Ron: Do you think the Constitution would include the right to bear arms if it was written today? I think there is no chance. The oldest democracy is usually considered to be Greece but I assume you must mean France which is older than the US. I'm not going to search back to find my exacat wording but by European democracy I mean those comparable to the US not those still emerging from Russian occupation. The Conservative party in England is very close to the Democrats. The idea that there are lots of Liberals in the US is true only on a US scale. Viewed from outside the US the spectrum is from conservative to ultra conservative.

LGB:
Congratulations. This was your best "get sympathy" stunt yet!
First it was someone else posting under your handle, now its Bart censoring you?! And everyone falls for it.
You are good!

LURKING GOLD BUG: I have been irritated by you, especially by your baiting of Puetz ( which I'm beginning to think was well deserved and didn't require my attempt at a gentlemanly defense ) . I NEVER thought about excluding you from Kitco. As you must have known, I merely studiously ignored you. But you are like many excellent posters and fellows here. You came on strong, and with a chip on your cybershoulder, and you started to settle down. I predicted that, did I not? Yes, because I am the ASTROLOGER on the site. And you will go after me for that. As is your right. Until of course, you see that my predictions, when I make them, are usually right. I cheerfully confess I was one of the folks who PUBLICLY asked Bart to deal with HepCat. HepCat was sick. He could not help himself. You can. I was not one who sought your removal. I simply ignored you, as it is easy to do. But you are not without substance, and your repentance in your "farewell " post will go down in Kitco history. It will appear in the frontispiece of "The Best of Kitco", available soon on CD and Zip disk. I also did not think that Bart would act so hastily. You may have been acerbic, acidic, repugnant, repulsive, anti-social, and a bit nasty as well, but you didn't seem like you have gotten close enuf to Bart's line. Or the rest of us. Even tho I didn't like you. And many others called you an Asshole. Or at least things like As*h*le, and stuff. You know. And you were. BUT...your repentance speech is accepted here, ( at least by ME ) and in the words of that greatest investor of all, I say "You are forgiven, brother, go and sin no more." ( :- )

A few words on the controversy that is no more

My first thought was that this was a setup, that LGB's first post of the day was completely fabricated, and that his goal is to keep himself at the center of the whirlwind. But I was in one of my more Machiavellian moods and these suspicions soon passed.

It appears now that it was all one great big silly goofy misunderstanding and, jeeeeez fella's, can we all just be friends again? Let's be clear on one point: this guy is no Hep Cat. If he is our old friend, he has learned millenniums of subtlety. I had some doubts about the mental condition of Hep Cat, this guy LGB is a far cleverer species. This is a fellow that is very skilled at going to the edge of offense without going to far. Well, for the most part at least. As time passes, I expect his aim to become truer.

What truly distresses me is the few who supported the idea of banning LGB. On his worst day, he wasn't even Hep Cat Light. I was very happy to see the majority opinion here seems to be for free speech and not with those few who would bury it under the crawl space and explain away the stench to neighbors who wrinkle their noses, "It must have been a mouse what crawled under there, and got his self snuffed."

Warning, I now plan to cross that fine line myself, but its hot, I'm kinda' cranky and it needs to be said:

Whichever one, or two, or more of you said they approved of the ( supposed ) ban of LGB, and that this site should be a place that didn't argue the "merits" of owning gold Screw You Pal ( s ) , get yourself down under that crawl space; true you too will stink for awhile, but the sooner you get on down there, the sooner your smell will fade.

There, I did it. I was personally offensive to another poster here at Kitco. Deal with it. When one starts whining that another voice should be stilled, he/she has forfeited all right and every expectation to be heard. Those of you who supported this ban have every right to post your opinions, my respect for them has fallen considerably.


Bart is rightly angry at the public accusation, which is, I suspect, the reason for his quite public response, although I do understand. The proper forum for LGB, was to contact Bart privately. I can think of a dozen innocent reasons for a failure to make an Internet connection, it is surprising the a clever fellow like LGB would immediately jump to the conclusion that he was banned. Ockham's razor is a rule of science preferring the simplest of two or more competing theories. Perhaps he was in a more Machiavellian frame of mind.. Hmmmmmmmmmm.

RJ: It's a good thing, too. I was all prepared and getting ready to step in for LGB as the resident ascerbic. It's a tough ugly job, but someone's gotta do it, right troop? And I coulda been UGLEEEEE!

He he he heeeeeeee .PFKALG!!!

Dear LGB:

I for one am glad you got that all straightened out. It was a shame actually that you mistook your ISP/Computer problems as Barts, as I'm sure the rest of us were as shocked as I was in you thinking that Bart would silence you. That's just not Bart . I've never met the gentleman, however, anyone who has the patience which he has exhibited in the past, would find it impossible to change to someone ruthless and mean. As I said, I'm glad it's straightened out. BUT ( you knew that was coming didn't you ( :- ) ) ) !

I quote:

"To those who believe only certain voices, styles, and points of view should be heard here, I'd get busy if I were you, studying what our nation is all about. You have no idea how INCREDIBLY dangerous you are to a free Democratic society. "

#1 Who's nation is "our nation" ? My nation and the founding site of Kitco is Canada.

#2 Are you presuming that all nations should act in the manner of the people you're referring to as fellow patriots? In other words, must we all guard American ( your country ) freedoms to be worthy? Perhaps a slip of the finger, and I'll accept that if true. If not, to infer that the elimination of your posting rights will hurt the free worlds speech, just because you might think that Americas way is the worlds way, is a little much, if that's what you meant. My point is that this is not an American site. It is not American "rules" here, and your "freedom" means nothing to me insomuch as to cause an intraspection of my country and it's freedoms. I object to being lumped in with your version of "freedom" ... American or not !

#3 Simply put, we're not you. Canadians do not want to become Americans. Not because we hate you or anything vindictive, however, there is a difference and we like to keep it that way. Next time you want the Americans to look inwardly, fine. Please don't expect the rest of the free or not free world to tremble for your freedoms.

Glad your back once again ...

TTFN

Panda: Thanks for the info. Much Appreciated! Bob: One thing that you might not have considered with an investment in Arizona Star is what will happen if somebody makes a play for BGO, a real possibility at these depressed prices. If that happens then they will also own 49% of the Cerro Casale and 30% of Arizona Star stock. All they have to do is wait out the AZS shareholders and pick them up for a song. I think at this point there are better prospects out their to double your money.

``We expect the whole thing to be liberated. There will be more of this to come,'' he said.

UBS's Smith said a key issue for gold demand would be the lowering of the premium ( over world prices ) of gold sold in India.

``Supplies should get to India more easily and that should increase demand but that in turn depends on what the rupee does,''
he said.

Any incentive to buy from a reduction in premiums would be wiped out if the rupee weakened against the dollar and pushed up
domestic gold prices, he said.
http://biz.yahoo.com/finance/97/09/08/y0023_z00_29.html

But Gero also noted that the implied one-month lease rate jumped to 2.07 percent from 2.00 percent Friday, which could be
bullish for gold. ``If those lease rates continue to climb, gold could be vulnerable to a short-covering rally, because producers
will be less willing to pay those rates to borrow gold to sell it,'' he said.
http://biz.yahoo.com/finance/97/09/08/y0023_z00_31.html

I had a discussion with a friend this weekend who reminded me the strong economy underlying the exuberant stock market is to a significant degree built upon a base of credit card debt, leased automobiles, and home equity loans. Consumer spending is 2/3 of GDP !

FRONT: Would it help if I told you my favorite coin was the silver Maple Leaf?

Ted,

Not sure wheteher the storms is over in s.e.asia.BUT one things for sure the local news medias keep on reported the GOOD STUFFS!WANNA KILLED FEW MORE DIANNAS AND PRINCESSSSSSSS!now,whole country heat up with stocks,even next door to me ,the 89 years old chap!CRAZY......THERE ARE THE POEM SAY THAT:EVEN THE BLIND CAN WIN THE MARKET INSTANCELY!The market is getting sick and unhealthy days after days....!people try to earn fast money!maybe ,the govt try to change their sights,instead,the real stuff!
THE RAINBOW GOING TO BLOW OFFFFFF?
HELP ANY ONE?THE REAL NEWS.....YOUR NEWS....!
E MAIL ( cssam@pl.jaring.my )
thanks and stay healthy...........

Donald,
I have posted this URL last month: http://www.ustreas.gov/treasury/bureaus/irs/prime/primerfc.htm.http://www.ustreas.gov/treasury/bureaus/irs/prime/primerfc.htm
Read it!!! See what this will do to the price of gold within 1 and 1/2 year. Kiss bonds stocks and $ good bye.
Here is Gary North's review of it.
"The IRS's mainframe computers, 63 of the , plus microcomputers are on the brink of total collapse. This amazing admission appears in a document at http://www.ustreas.gov/treasury/bureaus/irs/prime/primerfc.htm. The author is Arthur Gross, Associate Commissioner of the IRS and Chief Information Officer. Here are some excerpts
1. " In addition to three ( Memphis, Detroit, Martinsburg ) computing centers the latter of which is a fully operational center, the IRS deploys a total of sixty mainframes in its ten regional service centers. None of the mainframes are compliant." ( pg.9 )
2. " For the IRS, the Century Data Project is uniquely challenging, given the aged and non century compliant date legacy applications and infrastrascture as well as thousands of UNDOCUMENTED applications systems developed by business personnel in the IRS field operations which are resident on distributed infrastractures but not as yet inventoried." ( pg 13 ) - THEY EITHER LOST IT OR NEVER HAD IT!!
3. " Regrettably, the challenge is far more overarching: to modernize functioning but aged legacy systems which have been nearly IRREPARABLY overlaid by and interfaced with tangle of stovepiped distributed applications systems and networked infrastractures ( pg 55 )
4. " Our challenge, therefore is to forge a business plan and public/private partnership in accordance with federal governmental procurment laws and regulations absent the traditional level of DETAILED requirements typically established as the basis of the competitive process.... In general, the IRS seeks to create a business plan which: Shares risk with the private sector; Incents the private sector to either SHARE OR ASSUME the FRONT END CAPITAL INVESTMENT. ( pg 60 )
The IRS wants the private sector to put up MOST OF THE MONEY TO FIX ITS SYSTEMS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Read it for yourself, and see what is in store for the USA and the world.

JIN: The mailman is at your door!

LGB: Click on Shek's URL ( double listed ) just below this post and you will get the 404 error. This is a common internet problem not malicious at all.

Bart et al, the posting rate is impossible for a casual reader
to keep up with! one posting every five minutes it seems,
compared with every ten minutes several months ago. The short form seems
to work ok, an idea might be to reduce the date stamp to get
more words of the opening sentence on.
The commercial value of the site must depend on it being
accessible to everyone and information overload is a tangible
barrier. Posts may double or triple again,
...well, something to think about. I know of no system except
threads for handling information overload, perhaps some-else
has a suggestion? Threads, say maybe able to click on the treads
one wants to read, only that need be downloaded, would be
a considerable bandwith saving for ur server Bart, also
avoids the occasional friction that seems to arise as not forced
to read what seems objectionable to us ( though life says this
is where the gains are to be made ) .
don't want to seem negative, take a lot from the kitco site.

Fundy: Presumably, if the US Constitution were written today, we would have just emerged from a civil war. If conservatives won, we would indeed have a right to keep and bear arms, but it would be the First Amendment this time around. If liberals won, we wouldn't have a constitution at all, much less a Bill of Rights.

Huh? The US **IS** the world's oldest democracy. Indeed, the French Revolution was inspired, in large part, by the success of the American Revolution! Oh, come on, Greece!!! Democracy did begin there, but was abandoned, and did not finally reestablish itself until the military junta relinquished control in 1974. Far from being the oldest democracy, it is among the world's youngest, and least stable.

Fundy, I believe you are simply mistaken. It isn't difficult to verify the diversity of political organizations throughout the Western world. Nor is it difficult to verify their political influence. Members of some of these groups are downright fascists at heart, and are much more frightening than anything you'll find in the US. And the idea that there are no real lefties here is absolutely ridiculous. Sometimes I believe that the only true believers in communism are right here in the good old USA. There certainly do not appear to be many left in Russia. "WORKERS OF THE WORLD . . . WE APOLOGIZE!!" is a placard I recall seeing in Moscow after the fall of the USSR.

all,
the news dated should be 8/9..it s all right then...:
http://cnnfn.com/markets/bridge/2333.1.html
h tading

Front: got your missive....thankx!...There's gotta be some gold buried on Scaterie Island and I want to be the one ta find it...Will check out that site.....went swimming out FRONT today and the water temperature is down to 17-18 ( C ) according to my trusty old thermometer...pretty stimulating @ that temp...eh!...

LGB: I bet reading the last few hours' worth must have seemed like being at your own funeral. I also welcome you back, but caution you not to assume anything else about ANYONE at this site. If you're not sure...ASK! You may not always like the answer, but I'm sure it'll be an honest one.

lgb---

"people never KNOW AS MUCH AS YOU think they KNOW!"

what else do you know, grasshopper??

I'd feel really good if you'd sell me one below spot though ! So Mr. Astrologer.....how long for this plumeting to continue? Thoughts?

TTFN

Front ( 19:58 ) Thoughts I was thinkin....weird eh!...Too many in the U.S.of A think the entire world revolves around them....as too many "New Yorkers" think the "civilized world" ends @ the Hudson River..RJ ( 19:44 ) as usual you are right on the money!

It IS kinda liberating...like going 'commando' in your Levi's...getting your 'net' back...

For close to four days I TOO have been silenced. Bart, what a powerful man you are...do you know 'the smoking man'?

I thought Bart took mine one step further and contacted my internet provider. I could not, for the life of me, dial-in ( I have one line dedicated to internet that NEVER is disconnected but mysteriously was ) . After much anxiety that turned to anger that quickly turned to hunger I took this as merely a sign for me to turn off p.c. and enjoy the weekend away from 'it all'. So I satisfied my hunger pangs and went surfing. God, that clears the head!!

When the weekend started coming to a close and I STILL could not access I started getting nervous...uh oh! what to do...?

I quickly grabbed an old compuserve CD that was sent by mail and I loaded it and got online ( I got ten free hours...we'll see about that ) ...whew! Problem solved...and then I 'hooked-up' w/the Kitco gang and Donald tells us that the ROOOOOOSKIES delivered some Plat! uh oh #2! Conspiracies raced inside my melon. Did they ( ROOSKIES ) not want me to cover my long positions in plat??? the japanese? Chinese? RJ? Hmmmmmmmm...uh oh #3!

Needless to say, after much anxiety I was able to get hold of Chicago and cover...what a sleepless night ;- )

And now everything is back to normal and I am liberated...yes! i'm goin' COMMANDO! So 'LGB' I don't want to here no crybaby crap! boo-hoo so you couldn't access for a few days...It's not like you wanted to rush out and tell me how those Whiners handled my Lambs this weekend...INEPT vs. INEPT...eh? Dunkenmiller vs. Fumblefingers...uh oh #4!

AWAY...to chew on my provider

EB ;-^ )

NewPorter...what gives with PL...I will watch 2-nite and possibly dump all tomorrow...we'll see

BART; TANAMI: One other solution might be to get only two hours' worth at logon, with the choice of the rest of the day ( the current "submit" button ) , and a button for "the previous four hours." Sometimes you feel like a lot, sometimes you don't.

Donald, try this:
http://www.ustreas.gov/treasury/bureaus/irs/prime/primerfc.htm

not having to read my posts :- ) )

away
eb

hey ted! How's the market 2-nite bro!

EB: Was just wondering where you were....Dec. Gold down .20 @ 324.40 but crops are lookin good as weather continues to impress....Dutch Schultz on biography...whatta great dude!....

Dollar: Domination could be ended by the
euro

TUESDAY SEPTEMBER 9 1997

By Wolfgang Mnchau

European economic and monetary union, scheduled to be introduced on
January 1, 1999, will end the role of the dollar as the world's dominant
currency, according to a growing number of international economists.

They also predict that the change from a unipolar world financial system
based on the dollar to a bipolar system, based on the dollar and the euro
together, could lead to huge swings in the markets. Moreover, the change
could affect the way in which the world's large trading blocs co-ordinate
their economic policies.

Avinash Persaud, head of currency research at J.P. Morgan, estimates that
the euro will take a market share in international invoicing of between 35
and 40 per cent. "The reason why central bankers have certain currencies
in reserves is because these are the currencies they intervene with," he said.

"Trade and finance are invoiced in dollars because the US is the largest
exporter and importer. After 1999, the Emu bloc will be the largest
exporter and importer."

At this point, no one can be absolutely certain about the precise way in
which the international financial system would undergo such a fundamental
transformation. There is even more uncertainty about the timing.

International financial markets are complex and could yet show a surprising
degree of inertia. But there are various indications suggesting that
something may be about to happen.

At present, there is an imbalance between the share of the dollar in
international finance and the US share of world trade. The dollar's weight
in international finance vastly exceeds that of the D-Mark, the only
European Union currency that plays any significant role in international
finance. A reasonable estimate would give the dollar a share of around
three to five times that of the D-Mark.

At the same time, the US has a smaller economic weight than the 15 EU
members combined. In 1996, the EU accounted for some 38.3 per cent of
total gross domestic product among the leading industrialised countries,
while the US accounted for only 32.5 per cent. The EU also has a slightly
larger share of world trade and a larger ratio of exports to GDP.

Fred Bergsten, director of the Institute for International Economics, the
Washington-based think-tank, predicts that the euro and the dollar could
eventually end up with a 40 per cent share each of international financial
transactions. This would point towards a bipolar system with Japan as a
"junior partner", he said.

This shift would come about because of portfolio diversification. Fund
managers will rebalance their investment portfolios and central banks will
switch dollar reserves into euro reserves to match their countries'
underlying trade flows.

An example is the Bank of Japan, which currently holds no reserves in any
of the European currencies because none of Japan's EU trading partners
has sufficient critical mass. Once the euro is introduced, that situation is
bound to change. For the euro to match the dollar in market share, the
portfolio shift would have to add up to a staggering $500bn to $1,000bn.

Mr Bergsten has argued* that "many analysts agree that the euro will rival
the dollar as the world's leading currency. Most believe, however, that
such a shift will take considerable time, since any redistribution of
international portfolio occurs incrementally.

"But there is evidence from the history of major currencies that major
shocks can produce rapid changes in portfolio composition. The
devaluation of the pound sterling in 1931 permanently reduced the
international role of that currency and propelled the dollar into the
dominant position."

His analysis is shared by some foreign exchange specialists. Mr Persaud
points out that the shift away from the dollar is already taking place.
Several central and eastern European countries have been pegging their
currencies to the D-Mark. Asian countries may still have their currencies
pegged to the dollar, but it is conceivable that the pegs will become more
diverse, depending on whether the country in question has greater trade
links with the US or with the future Emu zone.

There is also surprising agreement among foreign exchange experts that the
euro/dollar exchange rate will become significantly more volatile than the
D-Mark/dollar exchange rate. In other words, the stability which the euro
will create inside the EU may be bought at the expense of instability in the
exchange rates between the EU and its trading partners. All in all, it could
be a zero-sum game.

This could have important policy implications. It could greatly add to
pressure on the Emu zone and the US to co-ordinate economic policy, a
prospect that officials at the EU's Commission regard as a likely external
consequence of monetary union.

Conceivably, it could also mean that pressure will increase for the
formation of a formal or informal exchange-rate regime to limit the
fluctuations between the euro and the dollar. This could open up internal
conflict between France and Germany, given Germany's preference for
free-floating exchange rates and France's preference for exchange rate
management.

Yves-Thibault de Silguy, the EU monetary affairs commissioner, agrees
that the euro will end the predominance of the dollar and produce a more
symmetrical multipolar system. "The potential gains to be derived from
co-operation will not only be greater, but will also be more uniformly
shared among participants," he said.

If this analysis is correct, European economic and monetary union will
affect not only financial markets but also a great variety of international
institutions, such as the Group of Seven, the World Trade Organisation
and the International Monetary Fund.

That would mean that the euro will not be just another currency. Nor will
be it an entirely European affair.

Ron: "Huh? The US **IS** the world's oldest democracy. Indeed, the French
Revolution was inspired, in large part, by the success of the American
Revolution! Oh, come on, Greece!!! Democracy did begin there, but was
abandoned"

Well my friend, if and when the US keeps the democratic form of
government for such a long time as old Greeks did, than it will deserve
the honor. Though the history of Greece goes back to 3000 BC, democratic
form of government in Greek cities started around 500 BC and ended around
50BC when the Greece became a subject of Roman Empire. The way we
continue to destroy it at ever more accelerated rate, it'll be gone in
much shorter time than in Greece and the US may become subject of hm..
XYZ Empire ;- )

"Are we ready for some football" EBN gold down .35 and dollar strong! Don't lie to me Frank!

ALL,
This GREEDY AND NEGATIVE GOLD DEALERS phoned me these few day from very first minute market since last week.if i am correct they ( hong kong side ) start to sell short from 328 per oz..... ill check it out..

You posed a possible scenario regarding the take-out of BGO and absorption of AZS over time for less than FMV. BGO has a poison pill program in place while AZS, to my knowledge does not. It is easier and less costly a proposition to take-out AZS than to wrangle with BGO management and deal with various other LT assets/investments that BGO has on its Balance Sheet. An Acquirier would target Cerro Casale ( CC ) and try to take it for the lowest price possible. BGO would be glad to off-load this mine engineering challenge to a greater entity and so, I believe, AZS would be offered as the take-over candidate structured to include the entire CC find excluding the Three Amigos - which conform more to BGO's prospecting/exploration and non-world class mine development style.

If gold price continues in the dumps it is quite possible that BGO would be the take-out candidate if the price drifts considerably lower. If gold price turns before yearend AZS should consolidate and form a base and then take-off at any sign of a take-over for either BGO or Cerro Casale.

Finally, in this day of shareholder rights it is conceivable that the silent majority of AZS shareholders could be organized to form a majority voting block to obtain control of the AZS Board from BGO management and seek a bid to realize fair market value for AZS shareholders equity - now wouldn't that be interesting ?

But you are quite right - anything is possible, even a no-takeout situation where BGO/AZS will need to solicit bank finance after a bankable fesibility study ( 1998 ) with a contracted and experienced mine manager ( FCX ? ) to bring the CC property to production value.

Cheers

( Comment by Donald: Reading between the lines this story says that U.S. export interests are complaining to Treasury officials that they can't compete with the dollar at these levels. In 1987, Sec. James Baker, speaking to this exact point, led many to declare his words the trigger to the 1987 collapse )
Japan's economy: US voices concern

TUESDAY SEPTEMBER 9 1997

By Gerard Baker in Washington

The US is still concerned at the state of the Japanese economy, according
to Larry Summers, the US deputy Treasury secretary.

Mr Summers said yesterday the US was keen that Japan should promote
domestic demand, not export-led growth.

He said he would raise the matter again when he sees Japanese officials in
Hong Kong at a meeting of finance ministers and officials of the Group of
Seven countries in two weeks.

"I continue to be concerned that Japan does what's necessary to achieve
the domestic-demand-led growth to which it's committed and avoid the
export-led growth that has been a hallmark of many past Japanese
recoveries.

Mr Summers' remarks, in an interview with the FT, followed mounting
evidence in recent weeks that the strong growth in Japanese consumer
demand recorded earlier in the year has fizzled out. Retail sales were
sluggish over the summer and sales of imported cars fell for the fifth straight
month in August.

Meanwhile, Japan's large trade surplus trebled in the first 20 days of
August compared with a year earlier. In the last two months the yen has
fallen by more than 6 per cent against the dollar, improving prospects for
Japanese exporters.

The US has been pushing Japan all this year to do more to promote
domestic demand. US officials had feared Japan might use the weakness
of the yen to increase exports and pull the country out of its long recession,
limiting the opportunities for US and other foreign companies to take
advantage of recovery there.

Robert Rubin, US Treasury secretary, repeatedly expressed US concerns
as the yen fell sharply at the start of the year, and Japanese leaders also
made clear their desire to see a balanced recovery.

In the spring, however, as evidence of Japanese retail spending rose
sharply in advance of a consumption tax increase, US concerns appeared
to have eased and the yen recovered some of its lost ground against the
dollar.

But Mr Summers' remarks emphasised the continuing sensitivity of the
subject in the light of recent evidence of a renewed slowdown and the US
desire to maintain the pressure on Japan.

Nick ( canberra ) - what happened to your 'lesson'. You know, the 'when to fold 'em' lesson?? Did you sell? Did you buy more? Was it rhetorical? Did I get hook-line-sinkered? What? I'm looking back but not far enough I guess. Oh, btw...I AM a gambler...you bettcha! It does tend to make oneself 'alive', NO?

What else did I miss, MikeS...anything good I need to print from you? How is that leeeeetle doggie anyway? Or did you answer? Sorry...

StradMaster - I received a copy of the concert from a VERY-NICE-GOLDBUG this weekend ( thanks again, you know who you are :- ) ) . I have only listened to a small amount of which I am Very impressed. You can sure play that fiddle ;- ) ...more review later.

Goldbug23 - Thank-you VERY much.

Donald - Thank-you for all your research. Nick mentioned it and I agree. It is very useful. I pick and choose the stuff I need. Tireless work...indeed!

Gold - dear beautiful GOLD! Why are you such a dog...and why can't I short you?? When I pick up the phone to Chicago it starts to get real HOT and I must slam it back down...But I'm not CLOSE to going LONG on you either... Does anyone see the narrowness of the 'channel'?? The 'pennant' is continuing to form and it's getting more narrow by the day...hmmmmmm...w/w I guess.

ALL - thanks for the good reading...for the most part...

away...to play with the kids in the street...now they can have FUN!

EB

Asian contagion: Is Latin America on
market hit list?

TUESDAY SEPTEMBER 9 1997

By Stephen Fidler, Latin America Editor

When Mexico's currency crisis was in full force in early 1995, it shook
financial markets as far afield as Asia. With south-east Asia in financial
turmoil, many are wondering whether Latin America will now feel the
shockwaves.

According to Paulo Leme, director of emerging markets economic
research at Goldman Sachs in New York, currency volatility could persist
in Asia until the end of the year. As a result, he added: "We have
marginally raised our estimate of the probability of contagion from Asia to
Latin America."

Most forecasters still argue that the chances of contagion are small. The
direct effect of economic slowdown in south-east Asia on Latin American
exports is negligible. Some 2.9 per cent of Argentina's exports go to the
Asean countries, 4 per cent of Brazil's, 3.1 per cent of Chile's and 0.4 per
cent of Mexico's, according to researchers at J.P. Morgan.

Moreover, given the different products exported by the two regions, Latin
America's market share in third countries should be hardly affected by the
devaluations in Asia.

Mexico's tequila crisis in 1994-95 showed, however, that the impact of a
financial crisis could spread to other countries without important links
where economic problems were perceived to be similar.

In effect, said analysts at ING Barings in London, investors drew up a "hit
list" where parallels could be drawn. There was also a general retreat from
all "emerging market" assets in the early phases of the Mexico crisis.

The common elements between the four south-east Asian countries that
have suffered the worst of the currency troubles - Thailand, Malaysia,
Indonesia and the Philippines - have been managed exchange rate regimes,
large current account deficits and weak banking sectors, worsened by
exposure to overheated property markets.

Of all Latin American countries, the one that offers the closest parallel is
Brazil. According to ING Barings, its current account deficit of 4.6 per
cent of gross domestic product compares with 5.9 per cent for Thailand,
but total debt service accounts for only 4.6 per cent of GDP compared
with 12.3 per cent for Thailand.

On the fiscal side, Brazil looks worse with a 5 per cent of GDP budget
deficit compared with 1.2 per cent in Thailand ( though growing ) , and
government debt equal to a third of GDP compared with only 10 per cent
in Thailand.

However, Brazil appears to be less vulnerable to capital flight: its gross
external debt equalling only a quarter of GDP compared with more than
100 per cent from Thailand. Short-term foreign debt is lower as a share of
GDP, while Brazil's foreign direct investment - helped by a huge
privatisation programme - is expected to cover 42 per cent of the current
account gap, compared with just 9.5 per cent for Thailand. Brazil's more
than $60bn of reserves also show it has greater defensive resources in the
case of speculative pressure, say the ING Barings researchers.

Moreover, a central element of the Asian crises has not been present in
Brazil: the rapid expansion of bank credit. Since the introduction of Brazil's
Real plan in 1994, the central bank has maintained a restrictive policy on
credit growth, while many of Brazil's weaker banks have been restructured
or recapitalised since 1995.

This was emphasised yesterday in London by Jos Roberto Mendona de
Barros, Brazil's secretary of economic policy. Furthermore, he said that
Brazil appeared to be at the beginning of a new investment cycle - helped
by privatisation - comparable to periods of heavy investment in the late
1950s or early 1970s. By contrast, many Asian countries appeared to
have entered a mature phase of their investment cycle.

In an interview, he also noted that the trading band for the exchange rate
was now being depreciated at faster than inflation. Consumer prices are
now rising about 5 per cent a year, while the band is depreciating by about
0.6 per cent a month. This, along with reductions in the costs of doing
business in Brazil and increased productivity, was helping the profitability
of exporters and was encouraging forecasters to reduce their expectations
for the trade deficit.

Mr Mendona de Barros said that the exchange rate "in the long run"
would have to be made more flexible. But in the mean time, some
exchange rate stability was needed.

Maintaining Brazil's exchange rate regime "strongly depends on its ability to
raise $55bn a year in external financing" to finance its current account
deficit and repay maturing debt held abroad, according to Goldman Sachs
estimates. This, said Mr Leme, required "favourable international capital
market conditions". Mr Mendona de Barros conceded that in financing
the current account deficit, the assumption was that the world's financial
markets "behave more or less normally".

There is no evidence in fact that the Asian turmoil has yet translated into
pressure on the Brazilian currency, even though investors in Latin American
mutual funds have been sellers of Brazilian shares for some time.

According to figures released last week from Micropal's emerging market
fund monitor, managers of Latin American regional equity funds pulled out
$148m from Brazil in the second quarter, investing $127m in Mexico.

In August, mutual funds pulled money of all Latin American equity markets
in three weeks out of four. However, this, said analysts, was linked as
much to US stock market volatility as Asian currency turmoil. Wall Street
thus remains a more important influence on Latin America's financial
markets than events in Asia.

Ron: Miro said it for me. Perhaps a few words about the quality of US education in world history is appropriate now but not necessary.

#1 -- You complain about ISP problems? We just had an area code change here. Today I started to receive "wrong number" calls. Then I got a message from the phone company repair office saying that my phone line checked out O.K. They left their repair phone number and the number of the line that they "checked". Well, I don't know what happened to MY phone number, but I now have SOMEONE ELSE'S PHONE NUMBER! Presumably, they must have my number???? I called the repair office and they said, "Oh. The problem must be in the central office." So it goes. Internet, phone lines, and technology. This, in the U.S. of A.

#2 -- We are not a, "Democracy." The United States of America was organized as a Constitutional Republic. It is a Republican form of government, not to be confused with the Stupid Party ( R ) . The model was partly based on the old Roman Senate. Democracy was viewed as a disaster waiting to happen, in the Founding Fathers eyes. Read the writings of Jefferson, Madison, Federalist Papers, etc. This is the stuff that doesn't get taught in schools anymore. Democracy sounds good in theory ( like communism ) , but it is doomed to failure.

LGB -- Nice try. A little paranoid though?

LGB -- Interesting! I have a login that also won't work today! Someone put cooties in the WWW!

RJ -- Yupper!

EB -- A very intersting pennant it is. More than likely to be resolved to the downside. I posted Friday that if it broke above Dec 325.5, there would be 'possibilities'! That still remains true, but I'd like this sucker to drop off a cliff first! THEN!!!!!

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

UGLY CHART!

TED: You mean there's a world beyond New York? Where they wear white belts and white shoes on Sunday and scratch their heads at Elton John? Nahhhh. That's no world at ALL. FRONT: I've been looking at an inverse Head and Shoulders forming in some gold stocks. I've decided to keep me eye on Homestake in this regard. If there's one more swoon down for the gold stocks, I see it ending at $13ish for HM. Then the right shoulder of the formation will be in. Some other stocks will probably have to suffer new lows, like my dear ECO, but so be it. This is a long haul play, and I just think that steady chunks of the gold stocks this year will pay off big 18 months down the road. If ever there was a time to "dollar cost average" an industry group, this is it for the golds. And of course, empty your pockets of spare change and look under the couch cushions to buy lotsa Sunshine Mining at these prices. IMVHO. All of my strategies for gold are Looong term. The year 2000 looks good, but the REAL monster year for the metals will be 2006. Yes, I know, a long time, but not much different than buying the Dow in late October '87, is it?

I have posted earlier on many occassions that I am neutral short-term ( under 1 yr., now under 6 mos. ) for the prospects of Gold price correcting seriously above $340-$350 notwithstanding Puetz or GSC's crash/stock ( respectively ) correction and major gold rebound forecasts.

Experience has shown that timing is the difficult variable when it comes to market cycles. Few of us believe in the New Age jingoism that is presented as the justification for an extended ( over-extended ? ) DOW BULL run. But we are also quite aware of the power of manias to prolong cycles especially one that is feuled by a media eager to remain politically correct in the face of massive support ( Diana's global funeral is a god example of media power ) .

Why do I continue to hold gold stocks ? Two reasons.

1 ) I am not a good timer - selling now because I'm underwater to buy-in later - if at all - is not my expertise ( been there done that- safer to hold through the cycle in my case ) ; and

2 ) Fundamentally, a severe drop in gold price has and will continue to shake out weak producers and investors that in-turn will provide the necessary condition to reduce new gold supply and thus tighten an already extended short position ascerbated by marginal ( at these prices ) producers who sell into the abyss.

Notice I leave out the robust US dollar and Asean currency problems, and Jap and German economic and high unemployment respectively. These problems will need to work through the global economy.

Gold will need to find its essential fundamental commodity value first. Global demand in the 3rd world is rising to compensate for Western jewellry declines and then some. Supply is resticted by low gold prices.

Gold's 'store-of-value' or political currency value would be determined in due course. We need to consider whether gold as a global currency may be seriously wounded and therefore require a major convalesence period until investors could become more interested in the yellow metal as an investment store-of-value.

I don't discount the possibility of a short-term rally but lets face the music and agree that there are a majority of smart investors who have not fought the tape and exploited the media campaign against gold and it is this factor alone - the negetive media messages ( CB sales, professional and trade short positions ) that weigh heavily on any prospect of a serious gold recovery beyond current prices in the near-term.

Looks like we have a long wait as the light at the end of tunnel is not quite evident as yet. The best thing to happen to gold now may very well be a shock drop below the historic low to shake more weak producers out of business, especially the OZ miners who can't seem to stop selling gold for marginal cashflow at these prices.

Cheers.

Barry Riley: Malaise of the east

SATURDAY SEPTEMBER 6 1997

Stock and bond markets around the world have become
volatile and trendless as they nervously await possible
turning points for short-term interest rates. August
generally turned out to be a poor month, blighted in
particular by events in south-east Asia where most of the
markets have, in fact, established a definite new trend -
downwards.

The Pacific ex-Japan index is down about 15 per cent this year in US
dollars. The setback is especially bad news for UK pension fund
managers, which have more than 4 per cent of their portfolios in the
region's equity markets. Before a sudden rebound yesterday the Malaysian
stock market index was down by over 40 per cent from its February high,
causing the voluble Mahathir Mohamad, the prime minister, to complain
about wicked foreign speculators and propose setting up a 12bn fund to
support share prices.

Are these Asian upsets ominous for the rest of the world? Not necessarily
so because, within limits, a slowdown in the region will actually be helpful
in reducing inflationary pressures - in commodities, for instance. Excess
manufacturing capacity in Asia is an important factor in the weakness of
inflationary forces worldwide.

Financially, though, there have been significant consequences. Huge, if
mostly unsuccessful, currency support exercises by central banks - and, it
is reported, the Sultan of Brunei - have had a noticeable impact on the US
Treasury bond market, where yields rose sharply in early August. Asian
central banks have been selling US Treasury securities held in their
reserves in order to finance currency intervention, involving tens of billions
of dollars.

On the other side, speculators are more likely to be parking the dollars in
money market accounts for the time being, so the net consequence has
been a steepening of the yield curve. The rise in long bond yields has had a
negative knock-on effect on the US stock market. Meanwhile, though,
outflows from Japan into dollar bonds, fleeing from sub-2 per cent
Japanese bond yields, have no doubt continued to be large, offsetting part
of the damage. Bonds will benefit, too, from low inflation.

There is a delicate balance here. The turmoil in Asia will cease to be a
benign factor for the rest of the world if Japan becomes sucked into the
crisis. There are real reasons for concern: 40 per cent of Japan's exports
go to the region, and Japanese banks have big exposures to Thailand and
elsewhere. In a nightmare scenario, the Japanese, too, would be forced to
repatriate foreign assets ( in practice, dollar bonds ) in order to shore up
domestic balance sheets.

For the moment, western stock markets have merely been demonstrating
volatility rather than vulnerability. Last Tuesday's 257-point rise in the Dow
Jones Industrial Average was a record in absolute terms, although the
percentage gain of 3.3 per cent was merely remarkable rather than
unprecedented. Only Germany, where the stock market fell by 9 per cent
during August, has experienced a real correction.

Volatility can, however, give warning of trouble ahead. According to
NatWest Markets, the Dow has been more volatile in 1997 - in terms of
the number of days when it has moved more than 1 per cent either way -
than in any other year since 1987. Such erratic progress indicates an
unusually wide conflict of views between bulls and bears.

The bulls are chasing the trend, and are fuelled by excess liquidity and
savings flows, against a background of solid economic growth and low
inflation. The bears are looking for fundamental value, but they cannot find
it at anywhere near current price levels. The markets are sustained by "this
time it's different" arguments which will be dangerously exposed if, as with
the likes of Malaysia, it turns out that classic mistakes are being repeated,
after all.

We should not be unduly alarmed, however, by tumbling stock markets.
Equities are supposed to be owned by risk-tolerant investors, and they
represent an important buffer zone in the economy which protects other
sectors.

It is actually more worrying when characters like Mahathir come along and
attempt to support the equity market. They are not removing the
fundamental economic risks but they are transferring them somewhere else,
possibly less appropriate - in this case, it appears, into official pension
funds and other state institutions, although the details are somewhat hazy.

At present, it appears unlikely that dollar short-term interest rates ( and
certainly not yen rates ) will be raised very soon in a way which might
worsen Asia's problems. In Europe, it is true, the markets are steeled for a
slight, possibly only psychologically important, rise in Germany's 3 per cent
repo rate. But the D-Mark's 5 per cent rally against sterling since the
beginning of August has been a healthy correction.

Yet, the markets live anxiously from one month's statistics to the next.
Yesterday's US employment numbers proved harmless. However, US
economic growth has been running at more than 4 per cent so far this year,
an unsustainable rate. It will be surprising if the inevitable deceleration
proves painless.

Miro: I believe democracy didn't exist unbroken in any of the city-states of Ancient Greece during that period. Athens was never able to impose it throughout the country, despite the many wars it waged to conquer it. Even Athenian democracy itself was destroyed several times during that period. And democracy did not survive in any meaningful way during the reigns of Phillip or Alexander. Of course, if you insist on counting city-states, then I'll insist on counting the "democracies" of various ancient Native American Tribes. Hey, don't laugh! Some of them weren't far removed from true democracy. And I'll thank 'ya not to make me explain the word 'oldest' in this context. ;- )

BTW, I was in the US Army, stationed near the Czech border in 1968. I remember the invasion well, as it happened on my birthday. At the time I figured it was my last, simply because we were not put on 'alert.' You see, US Army, Europe, high command reserved alerts for training purposes and trivial international incidents, and since they did not call an alert for a full-scale Soviet invasion of a neighboring country, I knew it was serious.

( This story relates to my earlier post about Sec. James Baker in 1987 )
Dollar Slips vs Yen After Summers Expresses Concern About Japan

The dollar slipped against the yen after U.S. Deputy Treasury Secretary Larry Summers warned in
a newspaper interview that Japan shouldn't resort to exports to boost its economy. In an interview
with the Financial Times yesterday, Summers said he's ``concerned that Japan does what's
necessary to achieve the domestic-demand-led growth to which it's committed and avoid the
export-led growth that has been a hallmark of many past Japanese recoveries.'' The dollar was
quoted at 120.80 yen, down from 121.15 yen in late New York trading yesterday. It was quoted
at 1.8124 marks, up from 1.8081 marks in New York.

Fundy: Oh Brother!!! Don't pull any punches on my account, pal. Let's DO compare educational systems. After all, I did KNOW that the French Revolution came after. What do they teach you guys up there? Sheeesh!

EB--you asked for it, so here goes.

As I said I am a gambler, not an investor. It is extremely tough out there but I make a good living by following some very simple principles.
These principles can be summed up in Kenny Roger's song The Gambler. There is more share market wisdom in this one song than in the combined knowledge in my 300+ investment books. My eternal thanks to you K.R..
From memory--something like this:

"If you're gonna play the game boy, you gotta learn to play it right. You gotta know when to hold 'em, know when to fold 'em, know when to walk away, know when to run. You never count your money while you're sittin' at the table, there'll be time enough for countin', when the dealins done." "Every gambler knows that the secret to survival is knowin what to throw away, knowin what to keep. Cause every hand's a winner and every hands a loser, and the best that you can hope for is to die in you sleep".

My translation: ( hold em ) = NEVER buy "anything" unless it is going up ( down if you are short ) on HEAVY volume. NEVER hold 'em if they turn and go against you. Swallow your pride, take your loss but NEVER hold if they go a'gin ya!!!!.If you can't do this then stay out of the market cause you will lose money. Call it what you will--a stop loss or knowin when to fold em but it is the single most important principle of share tradi---er gambling. IF you are right and they keep going your direction BUY MORE.
And more, and more etc. You will end up having a huge position in one or two shares--but they will more than make up for all your little losses.

Sorry if this sounds preachy--but it works. When to sell is difficult--but as a rule if you are up big time and ain't gettin no sleep, then sell. Take a few days off and start over again refreshed. Oh--get yourself a CHEAP discount broker and for heavens sake don't take ANY advice from him. If he knew what he was doing he wouldn't be sitting there selling you shares--he would be on the French Riviera with his feet up watching the scantily clad young lasses. Then remember the last line of the song--relax--enjoy yourself--it is all a big game and you're trying to outsmart a lot of very smart people out there ( the reason for following the BIG volume is that these are the smart traders and THEY know something and that is why the share is moving. Don't gamble on what you THINK something is going to do, eg gold is gonna go up. Wait till it moves on HEAVY volume. Don't try to outsmart these big traders-- you will get your buns roasted. Cheers, Nick.

The XAU is really a proxy for NEM, ABX, and PDG. These three issues account for seventy five percent of the index value. Is it really a good indicator of the direction of gold? Check out the contract specs at;
http://www.phlx.com/products/xau.html

IMF: Move to double cash available to
central banks

MONDAY SEPTEMBER 8 1997

By Robert Chote in London

The International Monetary Fund has agreed to double its $28.5bn
overdraft facility for central banks, resolving an argument between
industrial and developing countries that has dogged the global economic
watchdog for the last three years.

The decision, taken by the IMF's board will provide countries with an
extra cushion in the event of balance of payments problems. This should
ease pressure for trade restrictions or the need to squeeze economic
growth when countries face problems such as falls in export prices.

The move involves allocating 21.4bn "special drawing rights" ( SDRs ) to
IMF member countries, each worth about $1.36. This "paper gold" allows
central banks to borrow foreign exchange reserves at interest rates
available only to the most creditworthy countries.

Each of the IMF's 181 member countries will end up with SDRs worth
29.32 per cent of its "quota". Quotas are the subscriptions that determine
each country's shareholding in the fund, roughly reflecting its importance in
the world economy. A fifth of members have no SDRs, having joined since
they were last issued in 1981. The UK will get the smallest increase; it
already has SDRs worth nearly 29 per cent of its quota.

In an acrimonious disagreement at the IMF's 1994 annual meeting in
Madrid, managing director Michel Camdessus proposed an
across-the-board allocation of SDR36bn, with the backing of developing
countries. The Group of Seven industrial countries insisted the allocation
should be limited to SDR16bn and skewed to countries with few SDRs.

Mr Camdessus thinks countries need extra reserves because of expanding
world trade and capital flows. But the G7 disagreed. Germany also fears
that more SDRs could fuel inflation.

When the IMF's ministerial committee last met in April, the disagreement
had narrowed. Mr Camdessus backed an SDR22.4bn allocation, while the
US and Germany wanted no more than SDR20bn. Compromise proved
impossible, because the US also wanted a satisfactory agreement on
proposals to increase countries' quotas. But it has now decoupled the
issues.

Mr Camdessus wants to increase quotas by 55 to 65 per cent, arguing that
the IMF's capital has shrunk 70 per cent relative to the world economy
since 1985. But the US insists the quota increase should be no larger than
35 per cent.

Hopes of an agreement on quotas before the IMF's annual meeting in
Hong Kong later this month may rest on a meeting of senior G7 officials in
Paris today.

There is more agreement on the way in which the quota increase would be
distributed. Most would be given to countries in proportion to existing
quotas, with the remainder used to reflect countries' changing importance in
the world economy or to rectify anomalies from earlier distributions. With a
total value of just under $200bn, quotas determine country's voting power
in the IMF and financial resources to which it has access.

Forex accounts law may be amended: no more blanket
immunity

RECORDER REPORT
ISLAMABAD ( September 8 ) : The Federal Government
reportedly proposes to amend the Protection of Economic Reforms Act
1992 to stop its misuse which is leading to the State Bank of Pakistan
losing foreign currency, it is reliably learnt.
In order to create a liberal environment for savings and investments,
the Parliament had in July 1992 passed the law which permits all citizens
of Pakistan, resident in Pakistan or outside Pakistan, and all other persons
complete freedom to bring, hold, sell, transfer and take out foreign
exchange within or out of Pakistan in any form without the requirement to
make a foreign currency declaration at any stage and no one can be
questioned in regard to the same.
It is now proposed that the freedom to bring, hold, sell and take
out foreign currency shall not apply to any foreign exchange borrowed
under any general or special permission given by the State Bank of
Pakistan.
Nor will any payments from abroad for goods exported from
Pakistan or for services rendered in or from Pakistan be retained or
moved in and out of Pakistan in foreign currency and the surrendering
requirement of the Foreign Exchange Regulation Act 1947 shall apply.
Similarly, earnings/profits of the overseas offices/branches of
Pakistani firms and companies, including banks or the proceeds of
securities issued and/or sold to non-residents or any foreign exchange
purchased from an Authorised Dealer in Pakistan for any purpose can be
kept in forex accounts or taken out of the country without official
permission as required under the Foreign Exchange Act.
It is said the Economic Reforms Act 1992 was promulgated in a
hurry in April 1992 and as a result it was quite badly drafted.
In a number of respects, the law is in conflict with other laws of the
land and also leaves grey areas which still need to be spelt out in clear
terms.
While the law permits resident Pakistanis to take abroad foreign
currency of any amount without question or hindrance or any declaration,
the Economic Reforms Act is silent on the question of whether resident
Pakistanis are permitted to hold bank accounts abroad, or with money
taken abroad can hold moveable or immovable properties.
The Federal Law Ministry despite several requests has not been
able to give a definite opinion in this regard during the last five years.
Section ( 5 ) of ERA gives immunity to foreign currency
accountholders from being questioned by the tax authorities, while Section
( 4 ) - which would be renumbered Section 4 ( 1 ) when the proposed
amendments are included under a new sub-section 4 ( 2 ) - only in broad
terms gives protection
from questioning by the authorities.
The law was tested once the government which had it passed was
dismissed in 1993. Federal Investigation Agency ( FIA ) under the Benazir
government through an order of a civil court judge obtained details of
forex accounts held by companies owned by the Sharif family.
This decision has only been recently overturned by the Lahore High
Court ruling that FIA cannot obtain bank records of forex accounts.
The irony is that while the Benazir government pressurised banks
though FIA to obtain forex account details of the political opposition, the
present government is obtaining details of the politicians, bureaucrats and
businessmen under investigation through the central bank in order to
overcome problem of Section 9 of ERA 1992, which states that the
secrecy of bona fide bank transactions shall be strictly observed by
all banks and financial institutions.
Section 40 of the SBP Act empowers the central bank to inspect
and obtain copies of bank record for implementation of banking
regulations.
The information so obtained can be shared by SBP with the board
of a bank whose operations have been inspected for imposition of a
penalty in case of a violation or for required rectification, wherever
necessary. The federal government can, however, ask the SBP to conduct
inspection of a bank under Section 40 and submit a report to the Ministry
of Finance.
The reason for amendment in Section 4 is said to be the growing
cases where exporters of goods and services instead of surrendering their
foreign currency proceeds to the SBP are holding them in forex accounts.
In case these funds are held abroad it affects SBP's foreign exchange
balance, and in case these proceeds are held in forex accounts in Pakistan
- even though the amount is reflected in SBP's forex balances - the
exchange risk is on SBP's account.
The basic objective of ERA 1992 was to initiate the process of
bringing foreign currency held abroad by Pakistanis into the country for
promotion of national savings and investments.
But the manner in which the structure was created after the passage
of the Protection of Economic Reforms Act 1992, it became, instead, a
source of immediate balance of payments support for the government. But
in the long-term it has become prop which has permitted successive
governments to delay the steps which can tackle the current account
deficit which has grown over the years.
Now with nearly $10 billion in private forex deposits and only $1.5
billion in official forex reserves, necessary changes in fiscal and monetary
policies to tackle the imbalances in the economy have become difficult to
implement.
In case the amendments sought in Section 4 of the ERA 1992 are
promulgated the adjudication powers given to SBP under Section 23-B to
23-J of the Foreign Exchange Regulation Act will remain, with FIA
completely out of the picture.

Lurker: Thanks for your reply. Apparently the Asian tigers already are selling our bonds to support their currencies, but the Japanese and Chinese are still buying.

The Japanese probably won't dump treasuries until their economy improves and interest rates rise at home, offering investors competitive returns. Chinese buying may reflect a quid pro quo -- they buy our bonds and we give them most favored nation treatment. How long this will last I don't know. If U.S.- China relations were to hit the skids for any reason, they probably would start dumping treasuries in a hurry.

Ron: I was ridiculing myself. Calm down and think of democracy going back 1000's of years longer than you ever knew.

Florida insurance company collapse avoided.
http://biz.yahoo.com/prnews/97/09/08/hum_y0017_1.html

rj@1944--------

with the village in ruins,
with the soon to be dead dying,
with the ether and flux-a-flyin',
c'mon,------ you've got the wemmen cryin'!!!; ) ------------------

LURKER, GEORGE COLE: Be sure to read my Bob Riley post at 22:00 for some insights on U.S. Treasury bonds. He offers an opinion about who is buying and who is selling, and why.

Thanks Nick for some good advice. You should print it on a business card and sell it for US19.95. Better advice than I have got in some books costing 45 dollars ( ;{ )

Crony Capitalisim at the heart of ( Asian ) abuses. ( Jin: This one for you )
http://www.businessweek.com:80/1997/37/b3544163.htm

That was a good flick ( movie ) ...

I was asking the more specific question...what did you do with your stocks? You said Steve ( Perth ) was quite happy taking his profits early on and I agree with him ( there are as many right answers as there are wrong answers ) . I gave you an answer but I didn't catch your reply to exactly what You did. You don't need to be specific just tell me that you made a killing ;- ) .

Thanks for the Tune and your thoughts on the markets and I am sure that you are successful but be careful that you don't come off sounding like the ONLY guy who has ever traded these here markets...it sounds a bit condescending ( is that an AUSSIE thing? ) . Thanks Mate, I enjoy all your postings :- )

AWAY
EB$$$

Fundy: I don't believe you. But please forgive me anyway. And Bart, 6pak, Miro ( ? ) , and any other Canadians who read that last outburst please accept my apology as well. I've always loved Canada, but I'm a bit irritable today, made worse, as always, when I hear American education ridiculed, with no distinction made between secondary and higher forms of education. I'm the product of American higher education, and bridle at the incessant innuendo that Americans are stupid and uneducated. Nearly half of us, I believe, do go to college nowadays, believe it or not. And our universities are magnets for students around the world. Whose fault is it that the other half of us do not study hard, nor avail themselves of this wonderful American resource? Admittedly, nearly EVERYTHING ELSE IS wrong with this country, and I and many other Americans are well-aware of that. So blast away at old-glory, if you must. I often do myself. But there are *some* good things about us: Higher education, . . . uh . . . I'm rambling. Going to take a chill pill and go to bed and ridicule myself.

EB--I forgot a coupla important things.

1 ) Keep on your toes. When markets are as nervous as they are now, they can turn on a dime.

2 ) Very important if you have a big winning position. I am generally not a big fan of insurance. I think it is a waste of money. Take good care of what you've got. Put the insurance money away for a rainy day. After a few years it should build up to the point where it will bail you out of any emergency. EXCEPT on the share market!!! For about 5% or less you can get insurance in the direction opposite to your big gains ( options ) . Buy it, EXPECT to lose it, kiss it goodbye the instant you buy it. Then sleep well at night knowing that in a crash you should at least break even.

"Gold deserves to be the weakest of the precious metals complex," said William O'Neill, senior futures strategist with Merrill Lynch & Co. "The prospect of further central bank sales still haunts this market. The Australian producer selling occurs almost on a daily basis. There are not a lot of reasons to be bullish on gold."

Roebear & Who Cares: While I agree with a lot that you say, I don't agree with the assessment that Greenspan has been successful in holding everything together the past 5 years. He has, however, succeeded in creating the greatest financial bubble of all time. And, he has succeeding in enticing banks to lend and debtors to borrow to the point that they can't repay existing loans -- at a time when the economy has been in a multi-year expansion.

If this is the definition of success, they I'd hate to see what a failure would look like. The exploding bankruptcy rate ( which may temporarily ease, because of another surge in mortgage refinancings these past 3 months ) is all the evidence needed to prove that the Fed's easy money policy has been a failure. It's clear that more easy money -- with a slight delay -- will only intensify the growing financial crisis.

Greenspan and the Fed have lost control of the financial markets. As Donald so accurately pointed out -- Greenspan is now at the mercy of the markets. I see a country in which the entire financial structure is in disarry -- one in which a stock and bond market crash looks imminent.

Bart--- "All the way with LGB!!"

If he was locked out electronically for his postings--then I would have obviously been on the wrong forum as I did not realize it originated in North Korea and I'd be outta here as well.

SYDNEY, Sept 8 ( Reuter ) - Canadian-based gold miner Placer Dome Inc said on Monday that operations at the Porgera gold mine in Papua New Guinea had been suspended due to dry weather with consequently possible lower output this month.

"Mining and other operations presently remain unaffected, but mill throughput will be suspended until substantial rain begins to refill the reservoir," said Place Niugini managing director Russell Barwick.

Placer said during the shutdown planned essential maintenance on the processing circuit would be carried out.

Barwick said gold production for the year to the end of August was only marginally below planned production due to the positive performance of the operation in the first half of 1997. "However, gold production for September may be lower if substantial rain does not fall in the next few days," he said.

Barwick said plans developed since the last dry spell were underway to increase the Waile Creek dam capacity but this would not materially improve the current situation.

Placer owns 50 percent of the joint venture, while Goldfields ( GLD.AX ) and Papua New Guinea mining investor Orogen Minerals Ltd ( OML.AX ) each hold 25 percent.

-- Sydney Newsroom 61-2 9373 1800
REUTER
Rtr 20:21 09-07-97

"Royal Oak Mines' Witte Is Best Paid Exec in Washington State"

TACOMA, Wash.--Sep. 5--Margaret who?

That could be the reaction of many who hear that Margaret Witte, 43, is the best-paid chief executive of any publicly owned company in Washington state, according to a list in the latest issue of Washington CEO magazine.

As CEO of Kirkland-based Royal Oak Mines, she earns a cool $1.72 million a year.

Not only that. Witte -- whose company reported a loss of $37.63 million in the second quarter -- earns more than Boeing CEO Phil Condit and owns stock in her company worth more than Condit's stake in Boeing.

Witte's annual earnings also top those of Microsoft's Bill Gates and Starbucks' Howard Schultz -- but her stock ownership comes nowhere near theirs in value.

Royal Oak Mines, a gold-mining company with operations in Canada, has seen its stock price slump this year in the wake of the lowest gold prices in 12 years. The stock closed Thursday up 6 cents at $2.06, but is trading 43.5 percent lower than at this time last year. The second-quarter loss included a special one-time expense of $28.7 million.

Witte's base salary is $280,300, but she receives a bonus of $950,000 and additional compensation of $492,134. Witte's stock in the company is worth $6.3 million.

According to the list, based on company proxy statements, Witte -- who rarely receives media attention -- has jumped from number 21 position in last year's lineup to that of top earner this year.

Although Witte tops the earnings list, most of the wealth of some of the best-known CEOs lies in their stock holdings rather than in their cash compensation.

For example, Gates, who earns $562,588 a year and is 18th on the Washington CEO list, is the world's richest private citizen because of his Microsoft stock, which is now valued at $37.3 billion. On occasion, Gates will sell stock to raise millions of dollars. Such sales also are not included in the compensation tally.

Condit, CEO of The Boeing Co., owns only 19,534 shares in Boeing, according to the Washington CEO list, which are now worth about $1 million. He earns $1.39 million a year and comes in third on the Washington CEO list.

In second place on the list is Bobby V. Abraham, CEO of diaper-maker Paragon Trade Brands, with earnings of $1.4 million. He really should not be on this year's list, however, as the company, which was spun off from Weyerhaeuser in 1993, moved its headquarters from Federal Way to Atlanta in January 1996.

Fourth place is occupied by Weyerhaeuser chief executive John Creighton, who earns $1.3 million. His stock has a market value of close to $28 million. In fifth place is Charles Pigott, CEO of Bellevue truckmaker Paccar, with $1.1 million and stock worth $110 million.

Next on the list are: sixth, Dennis C. Fill, head of Bothell's ATL Ultrasound, $1.06 million; seventh, Kerry Killinger, CEO of Washington Mutual, $1.056 million; eighth, Stuart M. Sloane, CEO of Quality Food Centers, $981,056; ninth, Peter R. Rose, CEO of Expeditors International, $879,866; and 10th, Roger H. Eigsti, CEO of Safeco Corp., $835,370.

Howard Schultz, CEO of Starbucks, was in 14th place with earnings of $671,219. His stock is worth $127.5 million.

RLM @ 6:54 -- Your points are well taken about the non-confirmations between blue-chip stocks and secondary stocks. In fact, this is another striking parallel between previous crashes and the current pattern.

In 1929, the Dow Utilities were the go-go growth stocks. 3 weeks after the Industrials peaked in 1929, the Utilities were still making new highs. 6 weeks later, the Utilities were still within a fraction of all-time highs. Then, all stocks crashed.

In 1980, when gold and silver peaked on January 21st, the speculative element of the precious metals -- platinum -- was still making new highs. Then, during March 1980, all three metals crashed.

In 1987, the secondary stocks ( such as the NASDAQ ) came back and made a double-top 6 weeks after the DJIA peaked. Then all stocks crashed.

In 1990 in Tokyo, secondary stocks kept rallying for 6 weeks after the Nikkei had peaked. Then all Japanese crashed.

In 1997, secondary stocks ( led by the Russell 2000 and followed by the NASDAQ ) are making all-time highs 5 weeks after the DJIA and S&P peaked.

The final top ( in the 6-week topping process exhibited in prior crashes ) is nearly complete. Another day or two or three up, then watch out below. The crash appears to be at-hand.

Credit; That which allows one to buy today what would otherwise have to be put off until a tomorrow. Also synonymous with debt; That which causes current income to go for paying yesterdays 'credit', thereby putting off futher purchases until a tomorrow. Typical alleviation comes in the form of paying off yesterdays debt. Todays alleviation is an expanded 'credit/debt' limit! HAR! Make the balloon BIGGER! It makes so much more 'noise' when it pops! It'll be a virtual 'shot' heard 'round the world!

You are correct. I have no good explanation of why full-moons ( especially the typed called lunar eclipses ) correlate with the starting point of crashes. My only observation is that the statistics indicate the correlation is non-random. I would appreciate any further comments you have on this subject.

BOB: Your points well-stated and I am of like mind. I also do not wish to try to time the market at this level, as I found this to be more beneficial in theory than in practice.

But having said this, I have several concerns, the sharp fall in NEM and ABX clearly demonstrate the vulnerability of liquid stocks held by institutions to a downturn in the general market, as well as to just a downturn in gold.

The fact that gold has not rallied from its Australian fall, despite currency turmoil, a substantial fall in global markets, support from NEM, and a sharp increase in physical demand in August clearly evidences substantial selling into the market, fragile investment interest and that gold is not ripe for upward movement.

Why should an investor buy gold - as a commodity, hedge against inflation or deflation, portfolio diversification.

Supply and demand due to fabrication demand, as I and another have posted earlier, is not the factor that has ever significantly moved gold. Moreover, such demand is decreasing in the West and but for India, it would be in a state of decline. And there is substantial risk that if demand declined in India, there would be a sharp fall-off in world demand.

Alhough there is a hint of inflation in the air in the US, IMO action by the FED to curb this will not only cause the general market to come down but also gold as well. Thus gold is in a no win situation. Only a very significant inflation scare may cause investors to gravitate toward gold, which cannot be presently seen. As to deflation, with due respect to Donald, I do not see this yet as a sufficient catastrophic threat to be beneficial for gold.

And the market is not otherwise apparently able to see the benefit of diversifying into gold as a means of diversifying one's portfolio.

Thus, what has not been considered here, is that gold may have a steady decline or flat movement for a year or more until economic or other conditions are ready for its advancement. This will continue to encourage CB selling, dishoarding by investors, lack of equity participation and producer hedging. Thus any reduction in producer supply will be off-set by above ground selling.

As any stuff declines in price, there is selling at each new lower price bench on the belief that the stuff is cheap, then, if it does not increase in price, a realization occurs that it may still be cheaper tommorrow and the buying stops - and it declines to the next level. And the longer gold stays down at this level, the less attractive it will come as an "expensive luxury"

As to gold as a monetary asset, the trend and times against it. And there is absolutely nothing on the horizon that suggests its ressurection, at least not of which I am aware and certainly not anything that has been expressed on this forum or on the Gold Eagle.

The bottom line is that it looks bleak.

Panda, Shek, and Cherokee: I agree with your assessments of the former Lurking Gbug, and now LGB. Something just doesn't add up with LGB. He seems to be evasive -- he's trying to hide something -- I just haven't quite figured it out though. But I do have some suspicions. I don't necessarily trust someone who wants to make a bet, but won't reveal his name, give an address, a phone number, or even an e-mail address. I imagine more on the LGB drama will unfold in the coming weeks.

LGB: I got a pair of shoes in dire need of a shoe-shine. Do you have an address or phone number where I can contact you about the details of getting these treads out of dis-repair?

Puetz -- I have to tend to be in agreement with at least a good part of your scenario. Tooooooo many things beginning to come together very quickly now! Time will tell, of course, but the 'change' is in the 'air', IMHO! The 'tsunami' approaches! Thanks for all your postings!

Puetz: Speaking of weeks are you still looking for a DOW below 4500 4 weeks for now?

STEVE PUETZ-- just wanted to say that I admire you greatly for most of your posts. Just like I don't agree with everything Oldman says---at least he SAYS what he thinks, as you do. There are so many bloody fence sitters out there, it is refreshing to hear someone take a definite position on something. As to your scenario--if it happens--I hope to be quick enough to do ok out of it. I do think you have met your match in A.G.. I think he has probably seen the similaries in the 1987 and 1997 charts and he has got a HUGE rabbit or two all ready to pull out of his hat if necessary. Regardless of how the next few weeks pan out--please keep posting as we need the spectrum of opinions here. You and LGB may even become good mates!.

NICK: Thanks for yesterday's reply. Been stung by a couple of YJ's myself. Good advice on the previous post. I guess the volatility of the Aussie markets makes you build a pretty thick skin. Sounded like a wild ride in the Ords last night.