Gold Discussion for Investors and Market Analysts

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(Sat Oct 04 1997 00:02 - ID#227238)
JTF: Those derivative numbers are nothing short of phenomenol. I never did well with progressions and infinite series, is that geometric? Exponential? ..... Or how 'bout: clearly out'a sight! 40 trillion by 1/1/98? .......... Someone is paying one helluva lot of interest. Eh?

(Sat Oct 04 1997 00:03 - ID#335190)
World War I @ Canada owing gold to USofA, over 62 years.=(1987)
World War I ( Canada 1914-1919 / USofA 1918-1919 )
In May intimation was conveyed to those European nations, which had not
yet funded their debts, that action in that direction would be welcomed
by the United States Debt Funding Commission. These included France,
Italy, Belgium, Roumania, Greece, Czecho-Slovakia, Jugo Slavia, Ethonia,
Finland, Latvia, Hungary, Lithuania and Poland.

The combined principal to be funded by these nations reached a total of
nearly $7,000,000,000. If to this is added the $4,600,000,000 already
funded by Great Britain ( Canada/Common-wealth ) the astonishing total of
$12,000,000,000 is reached. Based on the funding already made, taking
into account the varying paying capacity of the nations, the scale of
yearly payments, and the rate of interest charged, spread over the
sixty-two ( 62 ) years adopted as the uniform time term, it is calculated
that when the last payment has been made on the sixty-second year the
colossal sum of $22,000,000,000 will have passed from the pockets of the
debtor nations of Europe into those of the people of the United States,
a sum almost inconceivable by the human mind.

The year 1925 saw either the completion of all these fundings or their process well advanced. All these agreements were subjected to the approval of the United States Senate, after they had been signed by the
Debt Commission, and sanctioned by the President.

Opposition to these agreements was based upon the general ground that
these were business debts, voluntarily contracted, and owed to the people
of the United States, who provided the loans, and should, on principle,
be paid in full with a reasonable interest charge.

The opposite view maintained by no inconsiderable body of business men
was that these monies were advanced for a common cause, and before the
United States had taken on its part in the War, and that these advances
might well be looked upon as a contribution to the common cause and wiped
off the slate.

The view of the Debt Funding Commission was that the debts should be held payable, but that capacity to pay should govern the amount, the scale of
yearly payments and the rate of interest to be charged. On that basis
they made the agreements, and through Senator Borah, with a considerable
following, led an uncompromising and keen opposition, the Senate by
substantial majorities adopted the Commissions view, and approved the
agreements so far presented

The transference of these immense sums yearly from Europe to the United
States, either by gold shipments, imports or foreign investments, or an
admixture of all three, and its effect financially and economically on
exchange and trade, raises a question which may, in its practical
solution, demand in the future drastic modification of terms or new
methods of financing. Experience alone can provide the key to the problem

Golden Cheesehead
(Sat Oct 04 1997 00:08 - ID#431263)
Correction: I meant to say FAVRE-it colors! ( Sorry Brett )

(Sat Oct 04 1997 00:09 - ID#22778)
Earl,A frend gave me volume one and two "Atlas Shrugged", I read some of it ,I must not be worthy, I didn't get it. I was better amused by "Don Quixote".

(Sat Oct 04 1997 00:14 - ID#173274)
@the scene
Earl -- My SuperNova scenario! Yes, it'll leave a 'singularity', but it will not die 'quietly'. Not hardly! Singularities are born out of the extreme violence of SuperNovas! That process will be cause of a lot of wailing and the 'knashing of teeth' and with pieces flying off to wherever 'salvation' of value MIGHT be found! We know where that is! Any economic body tied to it will be like the inner planets in such a blast. Crispy critters, economically speaking! Start over from the ground up! I hope everyone is giving the Feds and Rubin their thumbs up 'cause once the paper stops 'rolling' properly, the scenarios start coming to fruition! Pray for Dow 10,000 and 100,000! We all know it's BS paper but the alternative is.............

(Sat Oct 04 1997 00:14 - ID#227238)
Golden Cheesehead: As fugitive from the South side of Milwaukee, in the sterling days of Thurston and Kramer, Skoronski and Gregg, and Willy Davis and the crazy man linebacker with no teeth, and Jimmy Taylor and Paul Hornung .... Vince and Bart get enough recognition ........ IMO, your comments are right on the mark. A perfect fit. ...... Now, are the Packers going to pick it up? 3 and 2 are they? Not good. I only watch a game if they're on the Tee Vee. ........ and there ain't enough gold in the entire world to get me to wear one of them stupid hats.

(Sat Oct 04 1997 00:30 - ID#227238)
Earl ( ) : It's an aquired taste. Like classical music, better taken in small doses in the beginning until the appetite is whetted.

"Atlas Shrugged" is a stretch for all but the heavily committed - or the about to be committed. The prose is pedantic, often shrill, the ideas are repeated unnecessarily and the story is a real stretch. Or so I thought, 30 years ago. I read it again 2 years ago. Now it's not such a stretch to believe. ..... In short, serious philosophy does not make for swell novels. Twain is more fun and the writing is better. Failing that, try some HL Mencken. It'll help you shed some bad training in Sunday school. .... and you'll chuckle a lot ...... and the writing is even better yet.

I still recommend "The Virtue of Selfishness".

(Sat Oct 04 1997 00:31 - ID#410246)
skunk in the wood pile
The best way to get a skunk out of a wood pile is with fire

(Sat Oct 04 1997 00:36 - ID#222167)
Earl: You live in Wisconsin, and you're not a cheese-head?

(Sat Oct 04 1997 00:40 - ID#173274)
@the scene
Earl -- The 'play' will not require anywhere near the large anticipated numbers to be involved. 'prices' of it can easily go to the moon and back if only a few 'large' investors got involved! But that is essentially meaningless in the endgame of paper, unless those who hold gold go about distributing it by purchasing 'items' with it. It will be useless as a universal currency unless it gets into everyones hands somehow. But the PLAY before then WILL/MUST be absolutely spectacular! Who knows what a singular 1 oz coin might command at the extremes! But you damned well also won't be very well off by not having some on hand the day the paper burns! All the paper you traded your gold for won't help you on THAT day!

(Sat Oct 04 1997 00:56 - ID#227238)
Puetz: Lived, in Milwaukee, during the '60s. Have no idea what it's like now but it was fine city in those days. .... Before that stupid hat. The Pack of the 60s would have puked on the field to have been presented with such a display. ... They'd a walked off the field in disgust. .... Then again, there's always the money. That makes things all better.

(Sat Oct 04 1997 01:07 - ID#335190)
1925 debt @ Canada
****Not "Uncle Sam's Pocketbook" Dominion, Provincial and municipal taxes take every year one-quarter of the value of the net production and about one-seventh of the value of the gross production of the country ( Canada ) .

It is estimated that they take about one-half of our national surplus. The Dominion, Provincial and municipal debts have been growing steadily since the war ( 1914-1919 ) , and have reached enormous proportions. Apart from war debt, this situation has arisen to very considerable degree from extravagance. Apparently, Canadians want to live on the scale of the United States.

Our public buildings, hotels, railways, roads and public services are modelled on theirs, but we forget that we have not Uncle Sam's pocket book. Canada resembles a man with five thousand a year trying to live like his neighbour with fifty thousand a year. The inevitable happened --we got into debt and then went to the United States to borrow at a good rate of interest.

The United States is liquidating its national debt at the rate of one billion dollars a year, and plans to pay it all off in twenty years. What hope is there of Canada paying off her debt in twenty years? Since the war ( 1914-1919 ) , it has been steadily increasing. Considering operating expenses and interest charges against income for the fiscal year 1925-26, we are glad to see that Canada shows a balance of $13,000,000 on the right side, and an estimated decrease of $22,000,000 in national debt.

But when the advances to the Canadian National Railways are included, our national budget has come within millions of dollars of balancing since the war. For practical purposes these advances must be considered as part of the national obligations. This view was expressed by the Hon. Mr. Robb, Minister of Finance, in his Budget Speech in the House of Commons on April 15th, as follows:
"Our total payments in respect of these railway corporations now reach $601,000,000, actual cash outlay charged to our national debt. This is exclusive of accumulated interest charges, as well as the capital cost of the original Canadian Government Railways"

Most of the Provinces and municipalities are not making much progress in reducing their debts, and, on the other hand, many of them are planning new borrowing.

The establishment of branch factories in Canada has been restricted, because the manufacturers of other countries are waiting to see if other tariff rates will be reduced to the point where they can ship goods into Canada from their home plants. Little capital is available for industrial enterprises, except for industries such as mining, and pulp and paper.

(Sat Oct 04 1997 01:08 - ID#227238)
6pak: How much did the repayment of those post WWI debts contribute to the experience of the 30s? ... The initial sum of $12 billion in debts, would have been the equivalent of some 600 million ounces of gold ( $20/oz ) transferred from Europe to the US. A princely sum. .... Nowadays, repayment is unthinkable. The operative terms are rollover, restructuring, rescheduling and etc. Or better yet; encourage C to lend to B in order to repay A. As in: IMF to Mexico to US. In order that Bill can appear to be in control of his lending destiny.

(Sat Oct 04 1997 01:23 - ID#227238)
6pak ( 1925 debt @ Canada ) : Always interesting stuff. .... A Dominion 3000 miles in extent and only a few hundred miles wide. Not exactly configured to make productive use of assets and capital development costs. Eh? ..... Too much land to develop and too few people to do it with. ..... Probably would have been cheaper to tie into the Great Northern line of those days and avoid the cost of a full transcontinental rail system.

(Sat Oct 04 1997 01:38 - ID#195260)
Boy - come surfing bye on a Friday night I find the Kitco's talking
Packers and Rand. One I know alot about - one I am studing.

Earl - you'll never get me to believe any Packer would walk off a field
while Saint Vince was standing on the sideline! Period. As for the hats
- I don't where them either. But I'm crazy enough as it is while I'm at
the game. wish I was going to be at Sunday's game, but It's my sister's
turn at the family's tickets.

As for Rand, I'm reading "The Voice of Resaon" right now - I like it
better then "The Virtue of Selfishness" ( VoS ) . VoS is to 'expected'
for me. I kept thinking this is exactly how life should be.

(Sat Oct 04 1997 01:46 - ID#227238)
Kuston: I'M sorry, I wasn't able to understand your thought in the last sentence. ... Haven't read the "Voice of Reason". I'll pick it up tomorrow.

(Sat Oct 04 1997 01:49 - ID#195260)
"Atlas Shrugged" a stretch? While I'll was reading it, I kept thinking
this is what Cuba must of been like in the 50's/60's. Today we are
seeing the end results.

Milwaukee hasn't changed much since you have been there - bigger better
roads and the surrounding area's are now developed. Most of great
resturants downtown are still there - the south side hasn't changed
any I'm willing to bet. They do have a new arena that sits next to the
Mecca - donated by the Bradley family.

(Sat Oct 04 1997 02:03 - ID#335190)
Earl @ 01:08
I suggest that these World War I debts, contributed directly to the depression of 1930's. Consider, the level of education ( almost zero ) ,
the control by major world corporations,& trusts. The introduction of the Central Bank of the USofA ( Federal Reserve ) 1914. Immigration, results in cheap labour costs. Captured European nation's in the debt squeeze,Canada also, via Great Britain. Consider, that these European nation's maybe, began to push back, against the debt squeeze. Then, the creditor puts the arm on these nations, and there was an absolute transfer of power to the USofA from the defeated, and indebted nations. ( depression then WW II )

Great plan, and it is, and was, a success story, the USofA waited 4 years to get into WW I, and also waited 2 years before WW II ( 1938-1945 )
Again, a transfer of wealth was directed back into the USofA. Great plan, and it has been accepted, as the best thing for the World.

The Marshall plan was the clean up crew, to put the finishing touch to the plan, that had been hatched in 1914. The cold war was also a very important item in the game plan, divide and you win control of world power. Yes, Russia lost, but, will that nation be back. If they do come back, look out, because they see world power also, and want it.
The middle east will be used to stage the come back, maybe??

That is my take. Thanks take care.

(Sat Oct 04 1997 02:11 - ID#195260)
Virtue Of Selfishness - I read the fiction books first, each charactor
was so extreme to me. The characteristics of each were so exaggerated
that they were unbelievable but well understood. I found it difficult
to apply the characteristics to real life.

"Virtue Of Selfishness" applied them for me. Everyday I see the
selfishness, grayness, conflict and compromise in the people around
me. I always wonder why they are that way. "Virtue of Selfishness"
gave me an explaination to all the things I see everyday in people.
I saw them and knew they were unnessary before I ever read Rand, but
I didn't understand why people lived like that.

"The Voice of Reason" is a collection of 26 essays Ayn Rand gave throughout
her life.

(Sat Oct 04 1997 02:22 - ID#31876)
Nomination of the week for best story title: "DOCTOR, WE HAVE A PULSE!"

(Sat Oct 04 1997 02:25 - ID#195260)
A personal example of 2nd raters:
Individual Rights and Selfishness, my landlord started locking the
hottub at night a couple of weeks ago. I have a personal committment
from them that the hottub will be available to me 24 hours a day. I
have been in discussions with them about how selfish I am to expect
them to honor their committment. They are trying to convince me that
my rights should be exchanged for the rights of all my neighbors. ( They
picked the wrong time to start this - I thought to myself - I am prepared )
I explained to them that the collective has no rights if you remove the rights of the individual. How I respect the rights of my neighbors
enough as to not transpass on them and I only expected the same in
return. ( I thought I was doing good, my arguement was correct and logical. I supported my theories with facts ) I concluded that the end
result of this new policy will be the destruction of the property.
I guess I'm not very good at argueing philosophy, today they told me
I could move out. Like I said, I see the evil everyday but I don't understand why people accept it.

(Sat Oct 04 1997 02:35 - ID#227238)
kuston: Enjoyed your personal experience with the landlord. Wasn't unexpected; was it?

(Sat Oct 04 1997 02:50 - ID#227238)
Kuston: Have no illusions about changing the world. That should not be the intent. It's enough to recognize the falsehoods for what they are when they appear. Reading "The Milwaukee Journal" should provide ample practice in recognition. It was liberal in 60s, I doubt that time has improved it much. ...... They did have an excellent book review section. In Thurs edition if memory serves. ...... And keep in mind that a selfish person is always defined as: "Someone who thinks more of themselves, than they do of me". ..... On first reading it sounds tongue in cheek. But it ain't. That's the way it works.

(Sat Oct 04 1997 03:03 - ID#195260)
Expected? I never expect to fail - so in a sense it was.
I understand now I was tilting at windmills.

After reading my explaination of "Virtue Of Selfishness" I know I
didn't explain thoughts very well. Let me try again - if you would
of ask me to explain my thoughts on any of the chapters in the book
I would of said something along the same lines as what Ayn said. I
wouldn't of said it as completely or as well - but the major just
would of been there. So, in my words, the book was 'expected' to

(Sat Oct 04 1997 03:08 - ID#335190)
Earl @ 01:23
You suggested that Canada was 3,000 miles across and a couple of hundred miles wide. Interesting, but, not accurate. Canada's area is 3,851,788 sq. miles. The UsofA area is 3,618,765 sq. miles. Sooo, this land is big, and you also suggested that it was best to have used the USofA rail roads. Well, if you get a chance, to look at a map of Canada, you will discover that most of the provincial capitals are a good distance from the USofA border. The reason is the fighting that existed between Canada and the USofA. We were settled first by the French, then the British, as a result, Canada was in conflict with the constitutional, revolutionary, independence forces, and powers, of the USofA.

Canadians, have a very productive history, very hard working people, as an example, in 1925 records indicated the amount of roads that existed in Canada were as:
"Total construction for the year ( 1925 ) amounted to 7,804.79 miles. This brought the total of highways and roads in Canada at Jan. 01 1926, to 427,037 miles. In Ontario 1925, considerable number of important bridges were built, the largest, 540 feet long. 130 bridges exceeded 20 feet. span."

(Sat Oct 04 1997 03:37 - ID#255151)

Oh man! Dropped a few hunnert bucks on some Oct. 97 HM Calls Strike Price 15 today-expire Oct. 17. Oh man!

Mike Sheller
(Sat Oct 04 1997 05:57 - ID#347447)
Time to salute smartly in the direction of POORBOYS, whose post on Tuesday, Sept 30, anticipated the merry military antics of Friday. POORBOYS' post on Kitco pointed out the Mars/ Pluto conjunction of Friday. The comment was questioning whether there would be war, or some such threat, coming up somewhere. Friday's military "scare" spooking the markets a bit concerning Iran certainly demonstrated the wonderful symbolic quality of astrology in anticipating phenomena! Good catch POORBOYS!

Having Fun
(Sat Oct 04 1997 05:58 - ID#401220)
I think just following the US dollar index tells you all you need to know about gold. It's trending down and gold is trending up. Keep it simple.

George Cole
(Sat Oct 04 1997 06:59 - ID#430205)
dollar index
Having Fun; Dollar index does NOT tell all of the golden story. The dollar index has dropped several times these past few years, but gold has not responded in a major way until now. Gold's failure to respond to these earlier episodes was typical bear market action -- no news is good news, The fact that the yellow now is going up on good news is another sign that the paradigm has shifted in a fundamental way.

In other words the bear market is over and the bulls now are in charge.

Spud Master
(Sat Oct 04 1997 07:31 - ID#273112)
@stop inhaling, 6Pak
6Pak - if you believe the US is "paying off its debt at the rate of a billion a year", you are either the type of trusting, credulous type politicians & conmen adore, or you are the victim of a controlled substance. FYI, the US deficit ( real ) and debt ( real ) just keep getting bigger and bigger. The prole-feed pumped out from Washington D.C. and parroted by the American lap-dog media is purely for consumption & control of the masses of dumbed-down, credit-card debt-laden, morally depleted Americans. George Orwell, in his novel "1984", said it best: the chracter is the inner party member O'Brien speaking to Winston Smith in Room 101: "[If] the part says two plus two is five, it is... if the party says I can float off this floor, I can...". Go visit the US Treasury "Debt to the Penny" web page, 6Pak, and use your pocket calculator to find the debt by month & year. Curious how no one on CBS, ABC, CNN, or NBC ever mentions THAT fact and then asks the Whitehouse why they just lied to the Americna people.

(Sat Oct 04 1997 07:56 - ID#26793)
Barron's has a very long article on deflation which is worth reading. Also, this on gold from Randall Forsyth: "Yet amid the deflationary tendencies evident in many economies, gold continued to rebound, with the December Comex contract gaining $7.60 last week, to $336.90. The Philadelphia gold and silver stock index ( XAU ) also rose to 109.14, from 102.23 the previous week and 94.84 two weeks ago. This may be a bounce in the deadest of cats, to be sure. But gold is still gaining against the firm greenback, which means it's even stronger against the more suspect currencies with which the world now abounds."

George Cole
(Sat Oct 04 1997 08:01 - ID#430205)
open interest
Comex gold open interest has dropped from 200,000 to 180,000 contracts since the rally began. This demonstrates significant speculative short-covering activity. So the bears do have a point.

But, the enormous volume in gold stocks signals that short covering is not the major force behind this rally. The truly explosive phase of this golden bull probably will not commence until open interest starts to rise as prices climb. Once that happens ( demonstrating either shorting on strength or long buying on strength ) a move to $375 or more will follow very quickly.

(Sat Oct 04 1997 08:09 - ID#390214)
Thailand may need more than the IMF package
...good morning all...

(Sat Oct 04 1997 08:10 - ID#26793)
Gold and silver bullion on sale? 4.5% off? Where? Central Fund of Canada, that's where. The fund closed Friday at US$4.125. It had a net asset value at the close of US$4.32. ( Amex CEF ) Fund information 905-648-7878

George Cole
(Sat Oct 04 1997 08:10 - ID#430205)
Ode to Andy Smith
There once was a golden anlalyst named Smith
Who against the yellow had a terrible tiff
Only Martians will ever buy
Said Mr. Smith with a sigh
Just before the market gods on high
Sent the yellow to the sky

(Sat Oct 04 1997 08:10 - ID#251144)
George, what about the London Mrket? We get all sorts of stuff with Copper stocks; comex v. LME

(Sat Oct 04 1997 08:15 - ID#390214)
S.Korea banks (S&P downgrades)
MELBOURNE, Australia, Oct. 2 /PRNewswire/ -- Standard & Poor's today revised its rating outlook on Industrial Bank of
Korea to negative from stable, and affirmed its ratings on the bank ( see list below ) .

(Sat Oct 04 1997 08:27 - ID#26793)
Kitco King George has spoken
His Crown and Septre in place
The spell of Smith is broken
He's vanished without a trace

(Sat Oct 04 1997 08:52 - ID#333131)
Good Morning all, George, I'm of the same opinion as you regarding short covering, but the impressive thing to me is that this is starting while the dollar is still so strong. The move in gold also preceded the latest oil mini panic. I'm thinking there is more happening in the middle east than is yet evident to outsiders. Donald, are you picking anything up that really sounds serious over there?

(Sat Oct 04 1997 09:06 - ID#280192)
@ King of What??
King George ( king of what?? ) bad calls perhaps! Like a broken record like a broken record like a broken record.Testing testing ( is this a recorded message?? )

Bob M
(Sat Oct 04 1997 09:08 - ID#26059)
Spoke with someone yesterday that knows a military person, and was diverted to Turkey to be stationed..I also believe there is something more serious going on over is impressive that gold began this rally and especially silver before this event..let us hope that the price does not drop off if and when events settle over in the Mideast..that seems to have been the pattern in the last several years..

(Sat Oct 04 1997 09:11 - ID#24864)
Dear all Kitco readers,

I know us Down unders get keen on Normandy Mining
and I thought I would pass on a few information
sources for those that might be interested. I know
Millhouse in Hong Kong and Nick in Canberra follow
NDY so apologies if you gentleman already have this
info. Evening Steve in Perth.

Disclosure: I hold Normandy warrants and sold some
on Thursday.

I spoke with the company's "Shareholder Services"
people on Friday and at the moment it looks like
ADR's will begin trading in the week beginning
October 20th. They will be listed on both
Montreal and Toronto exchanges and 1 ADR will
represent 10 ordinary shares.

Normandy profile:

June 30th Result:

Five Year History:

Recent info releases:

NDY closed down 6c on Friday at A$1.78.

Interesting US trading day. Dow fell 180 points
from the high before the late buying arrived.
I was half expecting that at 3:15pm "they" would
announce that the Bundesbank was concluding the
sale of 213 tonnes of Gold. ( It was a Friday after
all ! ) . But instead Gold was UP. Reason: The
Nimitz was Not stopping for noodles in Singapore.

What's going on here? For the last few years, crisis
in the Middle East sent Gold up 20c or 30c only.

Bonds: Key reversal?

In relation to Normandy and all Gold stocks:

George C Cole Good Morning ( go the Martians )

Relaxing Weekend to all

(Sat Oct 04 1997 09:20 - ID#57232)
@another_perspective_on_SE Asia
To all: Lyndon LaRouche offers an interesting perspective on what is happening in SE Asia. While he is controversial, and says things that I cannot believe ( the paranoia is evident ) , I think he is worth reading for clues on where to find more accurate sources of information. At the least he is very intelligent and entertaining reading. You can see why he is unpopular with the "establishment".

Mike Sheller
(Sat Oct 04 1997 09:21 - ID#347447)
apologies to th' Bard
Old King Cole
is an erudite soul
And Donald a newshound true
Literate as they are
They couldn't go far
If poetry were all they could do

(Sat Oct 04 1997 09:27 - ID#424336)
JohnC: Would please give us Normandy Mining's 800 phone number to their Investor's Relation'd dept?

(Sat Oct 04 1997 09:28 - ID#57232)
To all- "Speculative stock buying shows danger signs", today's AFR. Apparently Warren Buffet is wondering of there are any undervalued stocks left in the market. My thanks to those "down under" who alerted me to this excellent electronic journal.

(Sat Oct 04 1997 09:32 - ID#280192)
@ Duh
Let's slap ourselves on the back for all the bad calls we've made in the past year or 15. Lyndon LaRouche ( har har ) now I've seen everything here!

(Sat Oct 04 1997 09:33 - ID#57232)
Mike Sheller: My sentiments as well. I have decided to cancel my Investors Business Daily -- What we have on Kitco, due mostly to Donald, is far more relevant. We should all try to contribute in kind to this site, though I must admit that some of us have less time than others. My day job does require 7days/week attention.

(Sat Oct 04 1997 09:39 - ID#251213)
Price makes the news

(Sat Oct 04 1997 09:41 - ID#188244)
I heard a blip on TV that the projected budget deficit is 23 billion. OK, we all know they add in the Social Security 'surplus', even though the present value of Social Security cash flows is hugely negative. What's the latest accounting gimmick? Anybody been watching this?

Bob M
(Sat Oct 04 1997 09:42 - ID#26059)
Skeptic- if you have seen everything here, then maybe it is time for you to move on...I am sure you can find much more interesting places to spend your time at..

(Sat Oct 04 1997 09:50 - ID#57232)
To all: This is from the Jerusalem Post, Oct 1. I think it shows the mood in Israel more accurately than our news media. When you face danger on all sides on a regular basis, I guess you talk more freely about it. My impression is that a military situation between Israel and the Syrians must develop this month, before winter begins, or be delayed until after spring. Any clue from the movements of the Nimitz? Perhaps the Iran/Iraq excuse is a smoke screen for more serious matters.

(Sat Oct 04 1997 10:03 - ID#347332)
TO Skeptic
GO my man. I'm behind you. keep it up. Need help? post me.

(Sat Oct 04 1997 10:07 - ID#57232)
Bob M: I did not see your post regarding Turkey. I think somethings up in this area too. The messages from the Jerusalem Post seem to me as if the Israelis are resigned to their fate of imminent confrontation. I have also read that a secret military pact has been made between Syria, Iran, and Egypt. Apparently Mubarek of Egypt got sucked in because of the threat of more terrorism at home. What I have read is that King Hussein of Jordan refused to sign. The apparent leak that lead to the deaths of the Israeli commandos in the Golan Heights suggests to me that Israel is having trouble keeping military secrets, this is new, I believe, probably secondary to the occupation of Palestine, and the complications this brings.
I think which party is stronger militarily is quite evident -- Israel, and I think Assad knows this. However, he might get the Golan Heights back if he is able to elicit the aid of Iran as backup. But things don't always go as one plans -- I certainly would not predict what Iran would or would not do.

(Sat Oct 04 1997 10:12 - ID#57232)
To all: "Bundesbank's role in EU central bank questioned", from AFR, Oct 4,97. I'm not sure of the implications of this, and leave it the the experts at this web site.

(Sat Oct 04 1997 10:16 - ID#57232)
@Home -- re sceptics
To all: To those of you who have contrary opinions -- why don't you respond with deeds instead of comments? Why don't you do as Donald as done, and let the rest of us see the source of your opinions? The test of time eventually proves or disproves the reliability of the sources we choose.

(Sat Oct 04 1997 10:31 - ID#430205)
JFT: On the matter of rude skeptics and psywar attacks. SILENCE IS GOLDEN.

(Sat Oct 04 1997 10:32 - ID#30116)
Larryn -- Your comments last night on the reasons for inflation rather than deflation are right on, to my way of thinking about the current situation. Isn't it curious how, now that many have been burnt in the gold market, that it is far easier to find bears rather than bulls? The lesson to learn here, is how to use sell stop / limit orders. The problem with this damn sector, is the emotional attachment that the precious metals engenders in people ( gold bugs! ) . I am guilty of this and have paid my dues accordingly. I'm still a gold bull. I still think inflation will be the problem. I still think that the stock market will rise, albeit much more 'exciting' from here on in, and most importantly I now use stops and limit orders. I'm now convinced that 'position' plays are for cats that have atleast nine lives. I only one!

(Sat Oct 04 1997 10:39 - ID#24864)
Dear Investor 9:27,
Sorry I can't help with 800 numbers. I don't think
they have one yet. They are in Adelaide, South Australia,
and I rang a Mr. Colin Jackson on the phone number in my
latest Quarterly Report. I assume you ( Investor ) are not
in OZ so the international Number will be something like
+61 8 8303 1703.

DISCLOSURE ( AGAIN ) : I own warrants on Normandy shares
( but less than I owned on Thursday morning. ) Make your
own trading decisions and CAVEAT EMPTOR.
Regards JohnC ( 00:37 in Brisbane and a pleasant
Spring 17 degrees celsius )

(Sat Oct 04 1997 10:39 - ID#228128)
John Disney: You said that you'd name a company if asked. Consider yourself asked. All: Want to know when a rally will start. They start whenever I'm away from my computer for two or more days. Maybe I should post my travel schedule.

George Cole
(Sat Oct 04 1997 10:54 - ID#430205)
response to news
BOB: I doubt the Mideast situation was the key factor gold's rise. Gold has not responded to other signs of world tension these past few years. But now that we are entering a bull market, the yellow responds to the kind of news it had long ignored.

BTW, I do think the escalating financial and economic turmoil in Southeast Asia is a key factor behind gold's newfound luster. This kind of turmoil has not been seen before. But the most important factor probably is that the smart money is beginning to notice how cheap the yellow is in relation to U.S. financial assets.

(Sat Oct 04 1997 10:54 - ID#333131)
JTF, Thanks for the Jerusalem post. Interesting. On oil and gold and upcoming events: while you still have a copy of IBD ( or Speculators Business Daily as I prefer to call it ) , look at the futures chart page and notice gold and oil over the last 4 months. You don't have to crunch numbers to determine that oil is the best correlate of gold on the page.

(Sat Oct 04 1997 10:56 - ID#410246)
found one,KITCO has more jabber boxes, know wounder i'm confused.

(Sat Oct 04 1997 10:57 - ID#424336)
JohnC: Sorry to trouble you again. Can you supply the FAX #?

(Sat Oct 04 1997 11:08 - ID#24864)
Dear Investor,
No trouble at all . Happy to help Fax +61 8 8303 1994
Shares Outstanding at 30th June 1,632,319,286. ( @A$1.78 )
Listed options outstanding at 30th June 248,541,703.
Exercisable at A$2.50 per option until 30 April 2001.
Closed on Friday at 27c.
Best Wishes.

Bob M
(Sat Oct 04 1997 11:09 - ID#26059)
George- I am in agreement..this rally in silver began before this latest round on tension in the Mideast...but...when the situation eases there, if gold drops off back to its previous lows..then this, I believe would negate the bull market theory...I firmly believe this is a critical juncture for gold..if it continues to rise then the bull market is intact, but if it drops off..then expect lower gold prices..probably a break of the $300 level....the next 2 weeks will be looked upon by futeure chart readers as a critical juncture in all markets

(Sat Oct 04 1997 11:13 - ID#386276)
(Now in the eye of the storm)
Donald and others, this URL could be worth adding to the list.
The editorial has articles on IMF, El Nino, Crashes, Burgenstock Derivatives Conference, and many other articles.
Also info on Dow derivatives.

Had a look at Indonesia the other night using the Earth Viewer
The fires were very impresive. They show up vastly larger than the cities do. Maybe I'll do some spying around Israel at night soon.

(Sat Oct 04 1997 11:16 - ID#410246)
have the web master get you there i'm lost

(Sat Oct 04 1997 11:16 - ID#424336)
JohnC: What "latest quarterly report?" Are you the author of the report?

(Sat Oct 04 1997 11:17 - ID#227238)
6pak: In regard to Canadian land area vs development, I was trying to imply that the effective, contributing portion of lands, was only a few hundred miles wide. A superficial thought, late of an evening?

(Sat Oct 04 1997 11:28 - ID#333131)
Nick at 11:13, I can't open your message. Would you post again please?

(Sat Oct 04 1997 11:35 - ID#427357)
"Homestake Mining Will Reach New All Time Heights..." - bb fisher
Internationally acclaimed Technical Analyst has performed another insightful study destined to be called "THE Homestake Mining Prophecy." His analysis exudes incisive thinking, and is expressed with great clarity:

(Sat Oct 04 1997 11:38 - ID#386276)
Here's another URL with lots of controversial articles. Latest stories on the Middle East, Dow 8000, worth a read, next ten days high chance of war. Plus anything else you can think of that you'd like to read.
Possible ten day run on gold?
Comments anyone?

(Sat Oct 04 1997 11:44 - ID#25645)
To all:
Re: situation in Mid-East, US interests and price of gold/silver the following rcvd from Eastern Europe News Service.

RUSSIA-IRAN UPDATE. A spokesman for Russia's Federal Security
Service ( FSB ) told ITAR-TASS on 2 October that the FSB has
intercepted unnamed persons who were attempting to supply Iran
with technology for producing nuclear missiles. The previous day,
Iranian ambassador to Moscow Mehdi Safari told a news conference
that the "rumors about Iran's desire to use Russian technology for
production of nuclear weapons are totally groundless," according to
Interfax. But Reuters on 2 October quoted an Israeli intelligence
source as confirming that Russian nuclear technology continues to be
transferred to Iran with official approval. Meanwhile, Yeltsin on 1
October denounced U.S. criticism of the $2 billion gas deal concluded
several days earlier by Gazprom, France's Total, Malaysia's Petronas
and the National Iranian Oil Company. Yeltsin said Russia, France, and
Iran "are independent and freedom-loving countries. No other
country should dictate to them what documents to sign," Interfax

From: RFE/RL Newsline

(Sat Oct 04 1997 11:59 - ID#386276)
Donald and others, this URL could be worth adding to the list.
The editorial has articles on IMF, El Nino, Crashes, Burgenstock Derivatives Conference, and many other articles.
Also info on Dow derivatives.

Had a look at Indonesia the other night using the Earth Viewer
The fires were very impresive. They show up vastly larger than the cities do.
Maybe I'll do some spying around Israel at night soon.

(Sat Oct 04 1997 12:15 - ID#370191)

George Cole - How about that Dow?
Are you ready for 8300 before
October 23? Nice call, George.
( "Reaching 8300 is an if, not a when" )

Hey all - Ad in the Denver paper today for
6400 oz of silver at 20 cents under spot.

Who's with me?

The cat
The cat
The cat
The cat
He's all of that
He's all of that

(Sat Oct 04 1997 12:24 - ID#348397)
there once was a metal named gold,
whose friends have long since grown old,
the latest oddity is that its just a commodity
though its 334 and the CBs have plenty unsold.

(Sat Oct 04 1997 12:38 - ID#370191)

JFT - Funny how pointing out that someone on this site has
been CONSISTENTLY wrong is termed PSYWAR and dismissed
with the treacle "Silence is golden". In the real world, we would
instead term this "Calling a spade a spade". How much time should
we give GSC to be correct in his prediction? Sure, gold will go above 400 sometime. Should he be considered correct if it tops 400 in the
year 2012? If I consistently make incorrect predictions ( none of mine
have yet proven incorrect, and I've made very six very specific
predictions in the last two years ) and am rightly attacked for making
them, should I thus be able to retreat behind the "Well, I was just
early" excuse or the "nyah nyah nyah nyah, I can selectively
ignore those people who point out my folly" dodge?. Steve Perps
was wrong. End of story. The market did not crash, and those
morons who listened to him and did what he said are much poorer
today as a result. GSC is wrong and has been wrong about the
stock market crash and the impending explosion in gold. It will
not go above 400 any time soon, and it is very slippery of GSC
to keep pushing back the date of this explosion when his target
dates continually pass without any evidence of said explosion.
Gold is now $10 higher than it was in July. Whoop de doo.
Three months later, and it has increased in value 3%.
My bank account performed better.

(Sat Oct 04 1997 12:51 - ID#263153)
WSF ( NC ) ID#188244:
I heard a blip on TV that the projected budget deficit is 23
billion. OK, we all know they add in the Social Security 'surplus', even
though the present value of Social Security cash flows is hugely
negative. What's the latest accounting gimmick? Anybody been watching

Been watching the debt with the abiding interest of an armchair
hobbyist since they moved my army paycheck from Sept. 30 to October 1
to satisfy Gramm-Rudman requirements in the mid-'Eighties. FY'97
just ended and I think a $32B deficit figure for the past year is
being popularly bandied about. The Treasury Dept. accounting indicate
an increase of $188B in public debt outstanding for FY'97 or a little
over $500M per day. Which is a 587% discrepancy from the $32B figure.

A small surplus is being forecast for FY'98, a booming stock market
willing. According to Pete Peterson, new head of the Concord Coalition
taking over for the late Paul Tsongas, on an actuarial basis method of
accounting according to FASB ( Financial Accounting Standards Board )
utilized by the private sector as GAAP ( Generally Accepted Accounting
Principles ) -- as contrasted with the cash basis of accounting employed
by the Federal Government as Creatively Reprehensible Accounting
Practices ( CRAP ) ...on an actuarial basis realising accumulating
liabilities in the year that they occur the Federal Government is
reddening the balance sheet at the rate of $1.1T per year.

An example of the result of that would be the officially
acknowledged shortfall of $1.1T in the federal employees pension and
benefit fund, an amount not included in national debt figures.

Amortizing that shortfall alone, making interest rate and other
assumptions from the present day environment, would amount to spending
an additional $87B per year for twenty years. An amount also not
included in popular figures bandied about nor the $1.1T owed federal
employees included in official Treasury figures of the public debt

You mentioned Security Social. I noticed recently a calculation
of rate of return for a 45 to 50 year old worker paying into the fund.
Government figures/GAO indicate an expected 1.5% rate of return for
said worker. Groups with an axe to grind such as the Taxpayers Union
forecast a negative 1.5% rate of return for the same worker
paying into Social Security. Either way it is not much to write home
about. Firstly, one is required to buy a retirement annuity. Secondly
one is required to buy a government retirement annuity. Thirdly, the
rate of return of said annuity is paltry contrasted with that available
elsewhere and not something any thinking individual would buy at present
given a choice. Fourthly, the trusteeship of the Social Security trust
fund, spending all funds contributed, is an indictable criminal offense
when done in the private sector in exercising fiduciary responsibilities.
I recall an attorney living across an adjoining back yard who had
plundered a client's trust fund, brought up on charges, paid a fine, did
time and suffered disbarment.

(Sat Oct 04 1997 12:51 - ID#335190)
Spud Master @ 07:31---Earl @ 11:17
Spud Master: Great comments, referencing the year 1997. My post was a reference and quote from a 1925-26 Canadian Annual Review. I considered your comments very funny. Great, you noticed my post. Thanks, Take Care.

Earl: No, I do not think your comments were superficial. In the time frame of Railroad Building, you are correct. Thanks Take Care.

(Sat Oct 04 1997 12:59 - ID#335190)
91.6 billion debt @ Thailand = 80 % private sector
October 4, 1997
Thailand may need more than the IMF package -repor

BANGKOK, Oct 4 ( Reuter ) - Thailand may need more than the $17.2 billion already made available by international donors to help its ailing economy, the International Herald Tribune reported on Saturday.
Bank of Thailand Assistant Governor Siri Ganjarerndee told a conference in Bangkok on Friday that Thailand's original assumptions about the amount of short-term debt that would be rolled over may have been overly optimistic, the newspaper said.
Thailand has secured $17.2 billion in funding under an International Monetary Fund ( IMF ) -sponsored aid package arranged after a currency flotation on July 2 which left the country facing its severest economic crisis for decades.

The central bank this week said at the end of July Thailand had $91.6 billion of total debt, of which $34.9 billion was short-term. About 80 percent of debt is within the private sector.

(Sat Oct 04 1997 13:00 - ID#347332)
To All:
Back from my jog.
I am looking for a list/link of MAJOR CENTRAL BANKS and
the # of ounces in their vault.
Can anyone help?. Thank You in advance.
I've searched and still listless.

Steve - Perth
(Sat Oct 04 1997 13:02 - ID#284170)
News Update: US sends carrier to enforce no fly zone
What about the no Scud zone??

An aside: Senator Brian Harradine went for a walk on the roof of the Australian parliament yesterday. He said that he "sensed evil" hanging over the parliament. More than normal obviously.

Q. How do you tell an honest politician?
A. When he's bought, he stays bought.

Goodnight all.

(Sat Oct 04 1997 13:05 - ID#335190)
War @ Turkey
October 4, 1997
Syria denies military build up on Turkey border

DAMASCUS, Oct 4 ( Reuter ) - Syria on Saturday denied Turkish reports that it was mobilising its forces on the border with Turkey.
"These news ( reports ) are fabricated and baseless," an official Syrian spokesman said in a statement. A Turkish army official said on Friday that Iranian and Syrian troops had massed near a Kurdish enclave in northern Iraq in an apparent response to a Turkish military offensive against rebel Kurds in the area.

He gave no indication of the size of the Iranian and Syrian deployments but said they mostly consisted of armoured units. But he added that "it cannot be said that Turkey is in danger."

Turkey says that the cross-border raid, the second major push into remote northern Iraq this year, will finish soon, once its objectives are achieved.

(Sat Oct 04 1997 13:06 - ID#286199)
@sunny day
GSC correctly called the top ( DOW ) before it happened in August. He has consistently ( and wisely ) refused to set a date for a crash or bull market. He has attempted to describe the circumstances which must occur in order for a gold bull market to begin and for a paper market to crash. Mr. Cole has expressed interest in Energy and related service stocks as well as the metals markets and these companies have been spectacular this year. Thanks in part to his thoughts as well as those of others, my investing skills have been sharpened.

Gold bottomed in July at 313 and closed Friday at 334.70 a rise of 7% in 3 months or about 28% per year. Homestake mining hit a low of 12 1/2 in July and is now above 15, a 20% gain in 1 quarter, an annual rate of 80%!! If you trade stocks and funds quarterly, Mr. Cole's free advice is worth considering. If you petulantly demand a day and stock or commodity and price, pay a broker ( or ask Mike Sheller ) .

Mike Sheller: Your SSC call is/was right on.

(Sat Oct 04 1997 13:08 - ID#287279)
in Florida
The Department of the Navy has a y2k Web site. In an August 29 posting, we read:
"This problem stems from the use of a two-digit date in many computer
programs, computer systems, and embedded computer devices. At the
turn of the century, some computer systems will think that the year is
1900 instead of 2000. This will cause systems to incorrectly calculate
data or to fail completely. During a recent test, a command and control
system failed when the date was rolled over to the Year 2000. This is
a very serious problem. Since the problem is known, it can be remedied before the results are ***catastrophic*** or significant, if action is taken now. . . . Y2K fixes must be deployed in Calendar Year ( CY ) 1998, if at all possible. Other enhancements are to be delayed and funds diverted to accomplish the CY 98 deployment.

(Sat Oct 04 1997 13:11 - ID#335190)
Iran @ USofA Sanctions over $40 million
October 3, 1997
U.S. delays sanctions on Iran gas deal - report

WASHINGTON ( Reuter ) - The Clinton administration has decided to hold off on sanctions against a French energy firm for investing in Iran in an effort to avert a trade war with the European Union, the Washington Post reported Saturday.
Quoting unidentified U.S. officials, the newspaper said that rather than punish Total SA for signing a $2 billion natural gas development contract with Iran, the administration was seeking an agreement with the EU in which Washington would scrap the threat of sanctions in exchange for increased European pressure on Tehran to curb terrorism.

The approach represented a shift in emphasis for the administration, which had held out the prospect of sanctions as a powerful deterrent to investment that U.S. officials say would give Iran funds to acquire weapons or promote terrorism, according to the Post.

The Clinton administration has endorsed the 1996 Iran-Libya Sanctions Act which mandates punitive trade measures against any company that invests more than $40 million a year in Iran's energy sector.

(Sat Oct 04 1997 13:17 - ID#335190)
Dangerous Drugs @ 100 people executed for drug offences
October 4, 1997
Malaysians spend $373 mln a year on hard drugs

KUALA LUMPUR, Oct 4 ( Reuter ) - Malaysians spend nearly 1.25 billion ringgit ( $373 million ) a year on dangerous drugs,and more youths and yuppies are turning to the habit, the nation's Inspector-General Rahim Noor said on Saturday. Malaysia has one of the toughest drug laws in the world but the nation's "drug addicts, as a whole, raise nearly RM1.25
billion a year" to support their addiction, Rahim was quoted as saying by the national Bernama news agency. He said 35 percent of Malaysia's addicts were students, factory hands, fishermen and those idling on government subsidies.

"The current shift to designer drugs has also affected the working class and yuppies who regularly frequent night spots," Rahim said. "More alarmingly, the younger generation is increasingly affected by drug usage." Malaysia's drug laws prescribe death for people trafficking in more than 15 grams ( 0.53 ounces ) of heroin and 200 grams ( 7.05 ounces ) of cannabis.

More than 100 people have been executed by hanging so far for drug-related offences. Rahim said police seized more than 100,000 kg ( 220,000 lb ) of dangerous drugs and arrested 3,248 people between
January 1995 and August this year.

(Sat Oct 04 1997 13:19 - ID#426220)
Acclaimed Compuserve Gold & Silver King has returned from the North Woods to share his considerable wisdom. He's found a pure silver play worth watching:

(Sat Oct 04 1997 13:26 - ID#335190)
Vancover Stock Exchange @ Junior Mining Stocks
Saturday, October 4, 1997
Quarterly Snapshot Vancouver Stock Exchange

VSE slide slows: worst may be over
Top VSE % Winners
Top VSE Net Winners
Top VSE % Losers
Top VSE Net Losers

The Financial Post
The Vancouver Stock Exchange's woes continued in the third quarter of 1997, but market watchers are confident that things are looking up.
The VSE composite index of about 1,200 stocks seems to have found a solid floor around the 800 level, according to Graeme Currie, vice-president of research at Canaccord Capital Corp.

The index dropped 4.5% in the third quarter and has slumped 29.3% so far this year. It has been all downhill for the benchmark since it peaked at 1352.5 on March 10. Since then, the exchange, which is heavily weighted in junior mining stocks, has been plagued by a descent to 12-year lows in
gold prices and a stampede out of gold exploration firms after Bre-X Minerals Ltd.'s Busang deposit proved to be a well-concealed lie.

(Sat Oct 04 1997 13:35 - ID#335190)
Koranic Law @ Algiers
October 4, 1997

At least 100 reported killed in new Algeria massacres

ALGIERS ( CP ) - In the latest horror of Algeria's bloody insurgency, at
least 100 people were killed in a 48-hour spree of violence that included
school bombings and bloody massacres, witnesses and newspapers said
The insurgency began after the military cancelled a 1992 parliamentary
election run-off that Islamic fundamentalist parties were poised to win.
The militants want to overthrow the government and establish a state
based on Koranic law.

(Sat Oct 04 1997 13:44 - ID#411149)
Speed- would you explain what you mean about SSC. Is that a stock worth holding?

(Sat Oct 04 1997 14:02 - ID#26793)
Extract from Barron's, International Trader. "Carl B. Weinberg, head of High Frequency Economics, is a firm believer that money and credit are what make economies run. In his view, Japanese money supply isn't growing fast enough to turn around the nation's ailing economy. He's also concerned that bank credit lines are being cut and bankruptcies are increasing. However, his main worry is that Japanese financial markets could enter what he calls 'a death spiral.' In this bearish scenario, credit lines are cut or withdrawn, banks sell loan collateral in hand ( mainly equities ) , the stock market falls and the decline feeds on itself, with more credit lines cut and equities dumped."

(Sat Oct 04 1997 14:04 - ID#22956)
How is a bull market defined?? How is a bear market defined?? George...when this [gold] market turns and goes south ( which it started to do before this ridiculous 'seventh-fleet' move ) what will you call it then?? A mini-bear-waiting-for-the-cowboys-to-circle-their-wagons-so-we-can-defeat-the-evil-empire-and-send-this-yellow-to-the-moon-Bull-rally?? After every little $10 move the same stuff is written on these pages by ALL gold-bugs. And when the rally fizzles all is forgotten and it is business as usual...but the words/posts still remain for ALL to see. I thank Bart for giving us the ability to retrieve past posts and see who consistently makes GOOD calls and who has made the BAD ones. ( btw mikeS you are one damn fine consistent man who backs up his work with EXCELLENT technicals, and your calls have been fantastic, thank-you ) now back to my confusion...

ALL - I mean absolutely NO disrespect and I really do like GOLD and I really DO like KITCO ( there is a great deal of info here ) BUT, this emotional trading and cheerleading/backslapping and 'silencing' the contrary opinions should not continue. Many calls here regarding the 'imminent-stock-crash/imminent-gold-bull-to-$2000' should be silenced as well. I have read from you ( George ) the same stuff over and over and you keep pushing forward the months and back it with some talk about this and that ( it is in archives for all to see ) . When this new bull happens it will not be because anyone made a great call after making so many mis-timed calls. And then I will jump on board. There will be time. And the bull will not be tremendous... you can buy on the dips. this is EB's prediction and if I'm wrong someone will let ME know it... but I imagine if you are wrong then all will be forgotten and we will get on with our lives posting 'hope' for the rally to commence NEXT month. I don't know... for I am the confused one. And I tend to ramble...

And everyone should quit attacking contrary opinions ( skeptic/testing/JohnH ) and asking him to back up his info. All the info you use to back up your gold calls has been WRONG for the past year... so there...

I said it, now I must SURF, dammit...oh my! wax the board

Eldo - one good day in corn does not make a new bull. There is STILL alot of corn...the wildcard is the weather but I will go with fundamentals on this one...obey the trend.

(Sat Oct 04 1997 14:05 - ID#57232)
Mikey: This site has a list of the major central banks, world-wide, just in case you don't have it already!

Just click on "Central Banks"

(Sat Oct 04 1997 14:11 - ID#57232)
George Cole: re: "silence is golden" -- I got your point -- hope I helped -- time will tell.

(Sat Oct 04 1997 14:22 - ID#57232)
@Home: re IBD
Carl: Oil is doing better this year than the last 3-4 years. Also defense. Did you notice that the defense stock volumes went up dramatically at the beginning of 1997? I bought some defense related mutual funds, and then spotted the cause -- the middle east situation!
I do think the IBD is an excellent technical paper, but it is short on news. I might pick up an issue or two, or a couple of Barron's issues in the spring if the market looks better. Right now I only need to follow gold,oil and defense! Best place is right here and the internet! I will try to share all that I find.

(Sat Oct 04 1997 14:32 - ID#57232)
To all: re-Free advice. Noone on this web page need to follow any advice given, so there is no need to criticize any offered. Well thought out discussion of differences of opinion, however, stimulate free discussion that all will benefit from.
We learn far more and do much better in our investments if we learn for ourselves, and make our own independent decisions.
I consider advice given from one to another as a gift, and even better if the reasoning is also given.

What you do with it is up to you!

(Sat Oct 04 1997 14:38 - ID#335190)
17 Newspapers stop issuing @ Jordanian Government
Jordanian Gov. Obliged 17 Weekly Newspapers to stop issuing

By the down of today 25th of September 1997, all the Jordanian weekly newspapers ( except for SHYHAN, AL-SABEEL, AKHBAR AL-ASBOUA and AL-LEWA ) have been obliged to cease issuing after the period of time given to the papers to fix its positions according to the temporary law of press and
publications come to an end.>

(Sat Oct 04 1997 14:43 - ID#57232)
6pak: Thanks for what you do -- you also keep us informed.

(Sat Oct 04 1997 14:47 - ID#335190)
Try again @ Russia-Middle East links

1/: click on News/Media
2/: Then click on Internews Russia
3/: Then click on Internews Middle East
4/: Then click on SAD "Jordanian Government will shut down 17 Newspapers"

(Sat Oct 04 1997 14:48 - ID#216107)
Sitting here this morning trying to clear my head. I note:

that kitco on the whole is more bearish than I have seen it.
that gold has gone up on news where in the past middle east moved it not.

that the DOW is having trouble blowing through its old highs where it hasn't even wavered in the past.

that daily news is constantly announcing the death of inflation and the longevity of "the goldilocks economy".

that Japan and Asia are having major currency and economic problems and may need cash at home.

that every single item that I use or buy personally has and contines to rise faster than the governments rate of inflation.

that unions are starting to win wage increases.

that the money supply is growning in an ever increasing rate.
that the weather patterns that look to be particularily bad are ignored.

And not least of all commodities and metals are on an unswing.

Does this mean that the DOW is about to blast to 10,000?
Maybe, but I think not.

I think the odds are starting to favor commodities and the precious metals.

George Cole
(Sat Oct 04 1997 15:05 - ID#430205)
gold targets
BOB M: If gold fall to new lows there is little doubt it will drop below $300. Odds of new lows about one in a hundred in my judgement. The next big number we penetrate is much more likely to be $400 than $300. But a brief drop back to $329 or so to shake out the weak longs before the next upleg would not surprise me.

(Sat Oct 04 1997 15:11 - ID#18970)
Something I noticed in IBD this AM. That on Thurs there were approximately 6000 puts on Comex Silver versus 1000 calls and for Comex Gold there were approximately 7000 puts versus 3000 calls.
Is this a good contrary indicator? I have never seen ratios or activity like this in the midst of a precious metals rally. Comments please.

George Cole
(Sat Oct 04 1997 15:18 - ID#430205)
upside potential
Dundee: You have it right my friend! Since gold is cheaper now relative to financial assets than at any time since the early 1970s the upside potential is explosive. BB Fisher's forecast of $400-$500 by January may well be right on target. I am sticking with my forecast of $400+ during the first half of 1998.

(Sat Oct 04 1997 15:18 - ID#255285)
amongst the sages.
A fine golden morning to you from Aoteoroa. Kia Ora.

JTF an extraordinary link to Larouche this a.m. He is a magpie and may bring us shining treasures amongst the candy wrappers

(Sat Oct 04 1997 15:25 - ID#426220)
LBMA EXPOS: PART 4 (September 29, 1997) A Collective-Mind Analysis Compiled by The Red Baron
London Bullion Marketing Association is best described as "a riddle wrapped in a mystery inside an enigma." Daily gold trading NEARLY TWICE South Africa's annual production:

(Sat Oct 04 1997 15:28 - ID#252132)
@ In A Rush:

That XAU and XAU/Gold Ratio gap at Y.Auger's site looks like it wants to close that gap "in a hurry"!!!

(Sat Oct 04 1997 15:36 - ID#18970)
GSC What is your thought on my 15:11 post. Is there any historical significance or relevance to future price movement? Thanks.

John Disney
(Sat Oct 04 1997 15:51 - ID#24140)
To all
Many of my kitco cohorts seem to have a mindset
averse toward RSA. It's nowhere near as bad as you
think. For example, Trevor Manuel, the RSA Finance
Minister was in jail 10 years ago and was regarded
as a red street agitator. When he was made finance
Minister, he was so silly it was embarrassing. Now, he
is in the running for Finance Minister of the Year.
He is going to the IMF to appeal to them to cut the crap
on gold sales.
Compare that attitude to the Aussie Government who
ignored their national interest to please the
the US leaders who want to drive gold down so they
can keep flogging their phony bonds.
Quite frankly, I still prefer to live here than
anyplace else I can think of.

Bernatz de Ventadorm
(Sat Oct 04 1997 16:05 - ID#25028)
For All mah frans at zee kitco.

Ah do believe zat monsiour Cole ees a vairy good
analyst of zee fairst watair. Howevair, zat limereek
zat he posted at 8:10 was zo horrible !! Please
deseest Monsiour !

(Sat Oct 04 1997 16:22 - ID#255285)
whispering across the veldt
John Disney
It is very hard to assess political risk in S Africa, that may be one factor. Another may be the perception ( incorrect perhaps ) that one corrupt regime has been replaced by another. There may be an awareness that the gap between the large number of poor and the few rich in that beautiful land is potentially destablising. My new secretary has recently arrived in NZ from S Africa. She misses the beautiful country and her friends, but not the siege mentality she left behind.
I have followed your work here and am grateful for your generous contributions.

(Sat Oct 04 1997 16:28 - ID#195260)
John Disney - I've been following St. Helena ( SGOLY ) for years now. I
like the high dividend and small float. I remember a couple of months
ago you mentioned the stock in a positive tone. Do you still like the
stock at these prices?

EB - Are you proposing that we sit quitely and allow posters like JohnH
fill this forum with garbage? Like the night he claimed Ken Griffy
baseball cards were "as good a store of value" as gold!! If one's opinions
can not stand up to critic how good are they? Would we not be doing
them a disservice if we ignore them?

(Sat Oct 04 1997 16:30 - ID#335190)
Nuclear Protest @ Honk, if you care
October 4, 1997

Protesters gather near launch site to blast
nuclear spacecraft

CAPE CANAVERAL, Fla. ( AP ) - Anti-nuclear activists holding signs
reading "Cancel Cassini" and "It's crazy to destroy your own home"
protested Saturday outside the Air Force station where a
plutonium-powered spacecraft will be launched next week.
"I want them to just stop. They should just stop the nuclear debacle," said
Beverly Red, who stood along the road leading into the station and held a
sign reading "Plutonium Kills." She flew in from Vermont for the
Beside her stood Jim Ream, a NASA engineer who also opposes the
space agency's Oct. 13 launch of Cassini to Saturn. "Any chance of a
potential nuclear problem here in my community is one chance too many,"
said Ream, whose sign read "Honk! If you care!"

(Sat Oct 04 1997 16:33 - ID#370191)
Stop being so stupid with your analysis,
and stop extrapolating. If I put $1000
into gold at the beginning of the year
and $1000 in a CD, which one would
be ahead? The reason you gold bugs
are so dense and so poor is because
you convince yourselves you are making
money when you aren't. Gold investments
over the last 17 years have been shit.
Admit it. Stop hiding from it. You lost.

(Sat Oct 04 1997 16:34 - ID#335190)
Used Canadian Passport @ Israel bungled, killing.
October 4, 1997

Palestinians laud Canada's recall of Israel

GAZA ( CP ) - Palestinian officials strongly praised Ottawa on Saturday for
recalling Canada's ambassador to Israel over allegations Israeli agents used
Canadian passports in a bungled attempt to murder an Islamic leader in
Meanwhile, Canadian intelligence officers have interviewed the two
suspects being held in Jordan and confirmed they are not Canadians, the
Globe and Mail said Saturday in a report from Washington.

(Sat Oct 04 1997 16:35 - ID#370191)

Kunston - Ken Griffey cards went
up $15 catalog value this year.
They are at $90. He hit 57 or so
home runs. He will be MVP of the
AL. He 89 upper deck card is
not going to go down any time soon.
Stop denying reality. That is the way
it is. If you don't think so, please sell
me all you 89 Upper Deck Ken Griffey Jr.
cards at $10. I will be happy to take
them off your hands, you Kunston.

(Sat Oct 04 1997 16:50 - ID#26793)
BYRON: You are right about the XAU chart. What we need is a little more sideways action like the Nov 92 to June 93 period. Slow and steady wins the race they told me when I was a kid.

(Sat Oct 04 1997 17:03 - ID#255285)
Kuston, did John Disney answer your query about his pick? Having no memory ( can't look back ) is difficult on a fella.

(Sat Oct 04 1997 17:07 - ID#316193)
Nomination for the week, most thoughtful posting: "The Homestake Mining
Prrophecy" produced and directed by B. B. Fisher.

(Sat Oct 04 1997 17:07 - ID#195260)
testing/JohnH - I'm going to assume you are talking to me.

My opinion of you hasn't changed, neither will my response.
You are wrong.

(Sat Oct 04 1997 17:10 - ID#26793)
@Turkish Govt.

(Sat Oct 04 1997 17:14 - ID#228262)
On Japanese Bonds
Interesting Article on today's Ashai Shimbun:

ANALYSIS: Interest rates kept low as money flows into bonds

Long-term interest rates have hit record lows as financial institutions are shying away from stocks and other risky investments and pouring their funds into government bonds.

An economic slowdown has dampened demand for bank borrowing among corporations. In addition, banks, fearing defaults, have become increasingly selective in lending, analysts say.

One analyst warned that Japan's funds will eventually move out of the country if long-term interest rates remain at the current record low levels.

The yield on the No. 182 10-year government bond--the benchmark long-term interest rate--touched a record low of 1.745 percent per annum on Friday before closing at 1.790 percent.

Long-term interest rates have dropped to their lowest levels in the history of industrialized countries, except for wartime or other extraordinary circumstances.

A chief capital markets analyst at Yamaichi Securities Co.'s research arm described the current capital flows in Japan as "simply abnormal."

During the past six years, the government issued bonds worth as much as 102.5 trillion yen, the research institute estimates.

The amount corresponds to about 20 percent of Japan's fiscal 1996 nominal gross domestic product of 503.3 trillion yen.

An oversupply of government bonds should have sent prices lower and pushed up yields, but the opposite has occurred, the analyst said.

A senior analyst at Taiheiyo Securities Co. said funds should have shifted from bonds to stocks given the current record-low yields on government bonds.

Usually, stocks are considered better investments than bonds when bond yields drop to 2 percent or below, the analyst said. In contrast, bonds become more attractive than stocks when bond yields rise to 4 percent or above.

Some analysts say they are concerned about a "credit crunch" in the banking sector.

An economist said banks have become increasingly reluctant to extend loans to companies that have the possibility of facing business risks.

A key reason is that the government is planning to introduce new standards in the spring and order banks to slim down operations once the government detects deteriorations in the banks' balance sheets, he said.

Another economist also said there is an increasing risk that construction companies, financial institutions and other companies could go bankrupt.

He said financial institutions have few options other than to invest in "safe and liquid" benchmark government bonds. The other possible choices include bonds issued by electric utilities and stocks of well-performing corporations, he added.

In addition, a trader at a large life insurance company said it is difficult to increase investments in foreign bonds from the current levels.

That is because the yen could appreciate, which would sacrifice the value of investments in foreign currencies, he said.

Trade friction may develop over Japan's growing exports, which adds pressure to strengthen the Japanese currency, he said.

A financial market participant said Japan's funds will eventually head for overseas investments if long-term interest rates remain at their current record low levels.

He said Japanese investors traditionally fear the yen's appreciation because they assume that the holdings in foreign-currency investments should be converted into yen.

But investors may become willing to hold their assets in foreign currencies for a long time, he said.

The perception may change particularly after a revision in the Foreign Exchange Control Law takes effect in April to facilitate investments in foreign currencies.


(Sat Oct 04 1997 17:14 - ID#177260)
Aurator - No I haven't recieved anything from Mr. Disney yet. He has been
very helpful in the past, I'm in no hurry. The multi year chart for
SGOLY is terrible, it is an old mine, alot of things not to like about
it. But that double digit dividend has been paid for 20/30+ years
without dilution of the shares.

(Sat Oct 04 1997 17:16 - ID#195260)
Donald, do you have the cable modem? I found a new place to live
that offers it. I was wondering what the +/- are?

(Sat Oct 04 1997 17:17 - ID#286199)
Ray: SSC was brought to my attention by Mike Sheller. It is a silver mining company with too many shares outstanding, but which is responding well to the rise in silver price. Mike made favorable comments when the stock was trading at .75 per share and it is now trading in the 1.00-1.125 range, a gain of over 25% in just a couple of weeks. Beware the proposed 1 for 5, 1 for 8 reverse split. This is, in my opinion, a very speculative play, but quite profitable so far...

Testing: Timing is everything. Gold funds have done well in spurts this year and by moving in and out of sector funds, I have made money. Electronics and energy services funds have been the other places I camped out while watching gold. Your scenario of CD or Gold since the beginning of the year is only one way ( and quite boring way ) to play. If you're just going to make picks once per year, load up on Intel and Microsoft and go fishing.

(Sat Oct 04 1997 17:21 - ID#26793)

George Cole
(Sat Oct 04 1997 17:24 - ID#430205)
puts and calls
Bernatz: O.K. -- no more poetry ( for awhile, anyway ) .

WW: The high ratio of puts to calls in the metals seems bullish to me, signalling as it does continued investor skepticism about this rally. But I suspect that Glenn -- with his vast knowledge of the meaning of put and call activity -- can give you a more definitive answer.

My gut feeling is that gold will pull back four or five bucks sometime within the next few weeks before launching a charge at $350. I base this primarily upon the considerable drop in the open interest we have experienced of late.

Mike Sheller
(Sat Oct 04 1997 17:28 - ID#347447)
Puts over Calls
WW: In my humble opine, I DO like to see the put activity outrrun the calls in a commodity I'm interested in. And I AM interested in Gold and Silver. The surge of puts over calls in the metals is bullish as far as I'm concerned. In fact in every attempt at a rally previously, no such activity manifested. Seeing it now leads me to believe that this rally is not only genuine ( as silver has broken a 17 year downtrend! ) but we will not be seeing any testing of lows. A return move later on, sure, but those who are waiting for a return to this bottom may find the last train has come and gone, and there's a long walk to the next station. re puts and calls in commodity options: I would make it a trading RULE never to go long unless puts were running ahead of calls on a daily basis. And on a cumulative basis especially!

(Sat Oct 04 1997 17:28 - ID#263259)
this planet
6pak 16:30 post: I for one can think of no better use for plutonium than to power spacecraft. But look on the bright side, if the econuts ( or is that ecocoanuts? ) have their way, then they'll drive up the price of gold. Too bad it would be by making it too hard to mine and refine : (

(Sat Oct 04 1997 17:29 - ID#255285)
And did you know that Tulips came from Turkey. but that's another story.
Donald 17:07, Thank you. I like to remember that these battles are being fought in Mesopotamia, the Fertile Crescent, the Cradle of civilisation the first towns and cities of Catal Huyuk, Ur and Uruk . I do hope that peace returns one day, to those countries of great beauty and antiquity, and I can go visit again. It has been a long time.;- )

(Sat Oct 04 1997 17:29 - ID#26793)
Kuston: We have cable TV but they do not offer internet connections. I have heard about it, priced according to bandwidth, as much for $100 per month for the max speed. My ISP is a local call, $53 per quarter, 14400 BPS max but it seems to work best at 9600. Unlimited service and I never get a busy, rarely an outage. Does your new location have a connection to the hot tub? ( grin thing )

Bob M
(Sat Oct 04 1997 17:34 - ID#26059)
Testing- I wonder if back in 1982, if similar remarks that you make right now to the gold bugs, were made to the stock holders of the Dow at that time? Interesting how the fate and fortunes of men go full is unwise to be arrogant with ones good fortune and belittle those who have made mistakes..remember in meet the same people coming down the ladder, that you meet going up it///

(Sat Oct 04 1997 17:35 - ID#26793)
Este: I had a post about 10:30, 11AM that fits in nicely with yours. Talk of a Japanese "financial death spiral."

George Cole
(Sat Oct 04 1997 17:35 - ID#430205)
Japanese stock market
Este: The overwhelming bearish consensus on Japanese stocks today reminds of the consensus position on U.S. stocks near the bottom of the 1973-75 bear market. The Japanese stock market probably has more upside potential than any other major mart over the next few years. Once that baby turns around, the upward run will be explosive. This probably will begin at about the same time the starts to tank. In other words, fairly soon.

BTW, Japanese stocks did quite well during the 1993 gold bull. I suspect we will see repeat performances in both markets during 1998.

(Sat Oct 04 1997 17:39 - ID#263259)
this space-time
Testing 16:33 post: The price goes up and down from week to week and month to month. To make money BUY LOW and SELL HIGH ( or, sell high then buy low, but that is too complex for the average feline brain ) . If you have opposable thumbs you can buy high and make something good from it like a pentium processor heat sink or a pair of earrings, then sell even higher.

(Sat Oct 04 1997 17:42 - ID#370191)

Kunston - what the f--- difference does it make your opinion of me?
That's like saying your opinion of Warren Buffett hasn't changed.
So who the hell cares about your stupid opinion? I make money
and you lose it. You can sit there and bad mouth 89 Ken Griffey UD
and Beanie Babies all you want - the fact is the manufacturers of
both are a lot wealthier than you and don't give a sh-- about gold's
store of value. I take it that people in gold want excitement. People
in casinos want excitement. Is that what this is all about - you
idiots have more fun losing money than I have making it? Sorry,
I guess I think a little longer term than you do - I like to provide
a little cushion for my family, not regale them with stories about
how exciting it was to lose money in gold. What a sorry lot.

(Sat Oct 04 1997 17:45 - ID#370191)

I wish everyone would stop assuming that I'm arrogant or
bragging because I point out how shitty gold has done
over the last 17 years. You all are the ones who point out
what a great investment it is and advise people to short
the Dow, and then stand back from the carnage and say,
"Well, I wasn't holding a gun to your head."

Give good advice instead of shitty advice. Look within
yourselves, don't attack me.

(Sat Oct 04 1997 17:49 - ID#26793)
George Cole: The problem with Japan is that they are reluctant, perhaps for cultural reasons, to acknowledge the losses. Until that is done I can't see a recovery. Even a recovery requires that they have customers ready and able to buy. The US is one of their largest markets now. Will it still be their largest market after the Dow tanks? I think not. They are losing markets all around SE Asia, customers are no longer able to buy. One post this morning talked of capacity to manufacture 80 million new cars a year worldwide being on line soon. That is insanity! We can build spaceships to export them to Mars! ( Mike Sheller will tell us when the alignment is correct )

(Sat Oct 04 1997 17:50 - ID#370191)

Donald - I have it from a good source that
you cruise a lot of child porno sites. Do you
like looking at children's pudenda?

(Sat Oct 04 1997 17:53 - ID#255285)
enuff is enuff
TEsting 17;50 Cat alert.

Mike Sheller
(Sat Oct 04 1997 17:55 - ID#347447)
DONALD: Why, when the Moon is in the Seventh House, of course!

Mike Sheller
(Sat Oct 04 1997 17:56 - ID#347447)
I come upon a gross character
It strikes me that there is other than cars we might do well to send to Mars.

(Sat Oct 04 1997 17:58 - ID#26793)

(Sat Oct 04 1997 18:02 - ID#333131)
Questions for the coming week: Will Friday's treasury bond action turn interest rates up? Will oil maintain its gains? Will the dollar maintain its strength? If yes to one or more of these, how will gold act?

(Sat Oct 04 1997 18:05 - ID#31876)
Ladies and gentlemen ... may I have your attention pleeeese!! ( Pause )
There will be a five minute musical interlude while the ushers are
escorting guests who are leaving early. To all of you who remain, I
cordially invite you to a festive and enlightening evening, and one that
you'll long remember. Continue and enjoy!!!

(Sat Oct 04 1997 18:09 - ID#225157)
To testing
Hey "PUSSY" if you have made so much money, then why do you still live in an apartment?

(Sat Oct 04 1997 18:13 - ID#347332)
Forget saturday night boxing on the tube, I am
staying right here.

(Sat Oct 04 1997 18:17 - ID#26793)
Carl: Another for your question list. How will the Dow and Dow/Gold Ratio react to the new option trading?

(Sat Oct 04 1997 18:21 - ID#333131)
Donald, Good question. Can more leverage opportunity do anything other than exaggerate moves?

(Sat Oct 04 1997 18:25 - ID#347332)
To Peter:
TESTING still lives in an apartment because his multi-million
dollar home is being built.

(Sat Oct 04 1997 18:25 - ID#195260)
Leland - It is Saturday night, I wonder who'll show up.

Has anyone heard any more on the Nimitz?

(Sat Oct 04 1997 18:30 - ID#252312)
Aurator: Your comment about Lyndon Larouche being a magpie? How approprate! I think the "establishment" cringes when ever he talks! I suspect that some of what he says is true, and some is not true, but he does have an interesting way of looking at things.

(Sat Oct 04 1997 18:32 - ID#26793)

(Sat Oct 04 1997 18:35 - ID#252312)
George Cole: Re: Japan. I have the same impression that it bottoming. Generally the news is the worst at the bottom. Isn't it interesting that with all the bad news that it hasn't dropped more? My only problem is that I'm too nervous about the rest of SE Asia to invest in Japan.

(Sat Oct 04 1997 18:42 - ID#338452)

Re the 17:50 !

SEND THE PICTURE ! it's time !


(Sat Oct 04 1997 18:42 - ID#26793)
Carl: I am concerned that the Dow/Gold Ratio of nearly 100 years will reflect wider swings that could skewer the predictive value. Options are not my thing. I don't understand them or know how to price them. Perhaps daily results should be ignored and monthly averages will have more meaning. All of our historical Dow/Gold Ratio work was done with monthly averages so it may not be a problem.

(Sat Oct 04 1997 18:50 - ID#252312)
Donald: I think it was Earl last night that got me going on an implosion/bubble indicator. World wide OTC derivatives are doubling every two years, and are at 25 trillion$US as of 1996 ( BIS 1996 annual report ) . These derivatives ( I believe ) are unregulated, and are likely to remain so on the world market. It is unlikely that the worlds governments will agree on anything, despite SE Asia. This process cannot go up forever before the bubble bursts. Unfortunately we have little information on the risk from all the trading, and monthly ( let alone daily ) data is unavailable. My only guess is that if the cash risked exceeds world-wide assets we are at high-risk territory indeed!
So far, I am wading through the *.PDF files at the BIS and IMF. Mikey is looking for the reserve assets for the central banks -- something one could use in a risk indicator. Of course, we don't know how much of the derivative trading is at the central banks, but it is likely to be plenty! Any ideas where I should look for data? Do you have a better idea for a ( paper ) implosion early warning indicator? This one might be a year too late!

(Sat Oct 04 1997 18:52 - ID#255285)
@ wingd feet.
Mike Sheller; Mercury knocking on yer door.

(Sat Oct 04 1997 18:56 - ID#26793)

(Sat Oct 04 1997 18:57 - ID#252312)
Aurator: Is Auteoroa in New Zealand? Am I close? Someday I'd like to know what you mean when you say: Kia Ora!

(Sat Oct 04 1997 19:06 - ID#255285)
I wondered lonely as a ..
Aoteoroa = The Land of The Long White Cloud, given the name by the first Polynesian star-navigating-adventurers of a millenium ago. There is a move to return the name. I favour.
Kia Ora = G'day.
Ever see my question about Reynolds Numbers and Strange Attractors?

(Sat Oct 04 1997 19:07 - ID#427357)
The major problem facing the EMU caused the Bretton Woods Agreement ( Gold Standard ) to fail. Medium to long-term GOLD WILL BE the greatest single beneficiary of the EMU:

(Sat Oct 04 1997 19:11 - ID#252312)
Donald: Intersting post -- I'll explore it further. I am slowly becoming more aware of the derivative mathemathics. You probably already know this, but I think much of the derivatives risk analysis is based on the random walk/binomial expansion a la Black-Scholes. Mathematicians/traders, please correct me if I am wrong about any of this!
The key point is that the risk is based on a fairly steady market ( time scale longer than some period "t" ) . If the market has a sudden disruption, not only may the market be down, but all of the calculated risk parameters will go haywire, and those sophisticated butterflies.... etc. will be toast. My point is that the big traders ( read central banks? ) with their complex positions will find themselves in big trouble.
An estimate of

(Sat Oct 04 1997 19:14 - ID#252312)
Donald: Intersting post -- I'll explore it further. I am slowly becoming more aware of the derivative mathemathics. You probably already know this, but I think much of the derivatives risk analysis is based on the random walk/binomial expansion a la Black-Scholes. Mathematicians/traders, please correct me if I am wrong about any of this!
The key point is that the risk is based on a fairly steady market ( time scale longer than some period "t" ) . If the market has a sudden disruption, not only may the market be down, but all of the calculated risk parameters will go haywire, and those sophisticated butterflies.... etc. will be toast. My point is that the big traders ( read central banks? ) with their complex positions will find themselves in big trouble.
An estimate of the dollar value of complex derivative trading positions may be much more significant than the dollar value of simple hedging against a hard asset that one owns.
I enjoy your posts as always!

(Sat Oct 04 1997 19:14 - ID#263153)
Bob M ( ) ID#26059:

Interesting how the fate and fortunes of men go full circle...

( snip )

mistakes..remember in meet the same people coming down the
ladder, that you meet going up it///

Which reminds me, stampeding elephants have been observed retracing their steps.

(Sat Oct 04 1997 19:16 - ID#26793)

(Sat Oct 04 1997 19:21 - ID#344211)
in defense of gsc----

at the very least, he is a winner for having
survived, and being positioned for triumph.
a successful man is measured by the number of
his failures. the majority of futures traders
last only 6 months. gold is MANIPULATED in a
fashion that NO other commodity can lay claim.
he crawls the proverbial limb as few others do. his
techniques are not mine, however, they are another
angle to the great dangle that has confounded
so many for so long!

all REAL kitco-ites are survivors and warriors, ----
the "stuff" giants are made from.

blending g cole, sheller, d mcrory, ted, earl, spud-man,
da, old man, eldo, etc...YOU come to YOUR opinion on what
is best for you....

no one KNOWS AS MUCH AS YOU think they do........

cherokee!; ) squeezer-of-the-mezcal......bblwssfa

(Sat Oct 04 1997 19:23 - ID#252132)
@In between laundry room runs:
Donald: Re: 16:50 post. "The times they are a changing." Do wonder if that gap on the December gold futures chart will be filled ( below the current position ) and how quickly. Otherwise it's "Rocketman" time. ( 8+^ )

(Sat Oct 04 1997 19:24 - ID#263232)
@sollog-sollog-----what do you see grass-hopper?

(Sat Oct 04 1997 19:26 - ID#195260)
JTF - a few months ago D.A. posted some theories on derivative pricing
not valueing unstable market properly. It made alot of since - I think
it was just before silver fell to the 4.1x area.

(Sat Oct 04 1997 19:49 - ID#333131)
JTF & Donald, JTF, I think you are exactly right about the Black-Scholes pricing model for options. I was interested in this a few years ago and ask a pure mathematician to look into the model - he said it was fine if its assumptions concerning volatility were correct and they most certainly will not be, particularly "in interesting times". I guess the point would be that volatility itself varies and we have no compelling reason to assume any particularly shaped distribution for this "second order" distribution.
In any case, Donald, I just see more derivatives as more opportunity for errors to occur in people's commitments of capital. I don't see how this particular addition changes anything about the historical usefulness of inter market ratios. The Dow is too high on any kind of historical indicator you use. Whether gold is too low, well, I guess we'll find out.

(Sat Oct 04 1997 19:49 - ID#26793)
JTF: You probably already know this, but I think much of the derivatives
risk analysis is based on the random walk/binomial expansion a la Black-Scholes.
Mathematicians/traders, please correct me if I am wrong about any of this! OK. You are corrected! That is so far over my head I think I should write you a check for my entire net worth and let you invest it for me! ( grin thing ) I do this stuff for fun ( and profit ) it was never my occupation. I never, never, ever engage in complex strategies. I know history, and economic history, and what caused the failures. I feel I can see the future clearly. My weakness is in the exact timing. That is the reason for my interest in ratios, and last week we made a giant step in doing that with the XAU/Gold Ratio.

One of my strengths ( no modesty here ) has been an ability to take complex and seemingly unsolvable problems and "chunk" them down into smaller solvable problems. I strive for simplicity in everything. Complex ideas must be reduced to terms your office janitor can understand: "Would you rather have 24 St. Gaudens Twenty's or 1 share of each of the Dow stocks?" Is there a way to do that with derivates? I would love to work with you on it.

(Sat Oct 04 1997 20:06 - ID#26793)

(Sat Oct 04 1997 20:12 - ID#426220)
Acclaimed Compuserve Gold & Silver King has returned from the North Woods to share his considerable wisdom. He's found a pure silver play worth watching:

(Sat Oct 04 1997 20:16 - ID#26793)
CHICAGO, Oct. 3 /PRNewswire/ -- Duff & Phelps Credit Rating Co. ( DCR ) has
rated Bankers Trust New York Corporation's ( BT ) $200 million subordinated debt
'A-' ( Single-A-Minus ) . This 10-year noncallable issue has a coupon of 6.70
percent and was priced at 99.966 for a yield to maturity of 6.707 percent.
DCR's ratings for BT reflect the company's improving, but still modest
earnings performance and its solid balance sheet fundamentals. Core
profitability has been affected by the drop-off in the company's client
financial risk management business. This area was hurt by changes in the
market for complex derivatives and litigation and negative publicity
related to leveraged derivative transactions. BT's other core businesses,
specifically corporate finance, corporate advisory, transaction processing and
asset management, have been profitable but have not grown enough to offset the
substandard performance in risk management. Earnings growth in some of these
businesses has also slowed or plateaued, resulting in a level of core
profitability below historical results.

(Sat Oct 04 1997 20:25 - ID#26793)

(Sat Oct 04 1997 20:28 - ID#255285)
Donald I derive a deal of 'derstanding from your derivative data do not desist danks.

(Sat Oct 04 1997 20:38 - ID#26793)
Aurator: How much will you give me for a mess of Potamians? Did you like that post? Know the past, understand the future or something like that.

(Sat Oct 04 1997 20:48 - ID#30116)
Take a peek, if you dare...

(Sat Oct 04 1997 20:48 - ID#26793)

(Sat Oct 04 1997 20:49 - ID#215208)
Donald - I spent a little time today reviewing your links and the discussion related to derivatives. Can't say I really understand the full scope of derivatives, and probably don't need to. Question: Why are you bringing all this to our attention? Are you just using it as an example of a popular investment media that has increased the risk of a market crash? Second, although you aren't focusing on precious metals derivatives, can you give a simple example or two of derivatives relating directly to precious metals. Last, in your opinion, how would investments in PM's or mining stocks ( my stuff ) be affected by derivatives, both in normal times and if we get a major disturbance in the force.

Would appreciate a little tutorial for the novice.

(Sat Oct 04 1997 20:51 - ID#255285)
bird spotting
Donald, your 1949 read just great to me. Analysis synthesis praxis, and then a beer.

But apart from perhaps referring to the confluence of the Tigris and Euphrates, you've post me on the Potamians, are you saying you can end possible crisis in the Middle East and are negotiating terms? ;- )

(Sat Oct 04 1997 20:57 - ID#30116)
JTF -- More options stuff for you. Check the VIX graph in my previous post.

(Sat Oct 04 1997 20:57 - ID#57232)
@derivatives - Donald, Carl
Donald: Your "knack" at distilling the essence -- you are a Physicist at heart! The trick is to do the same with all this derivative stuff - to approximate a "risk" index. Since the world-wide derivatives trading is growing exponentially ( two year doubling time ) we do not need to be very accurate. All we need to do is determine when it goes "out of sight" so to speak. The only problem is that, so far, I have only been able to get yearly, but not monthly data. One way to solve the problem would be to get ones hands on the data for the regulated derivatives markets, and use a scaling factor based on the annual OTC data. This way we could come up with a monthly indicator.
By the way -- I think the Cato post may be the best yet on the derivatives problem!
Carl -- Thanks for the support -- it has been many years since I have talked to a pure mathematician ( as you have ) -- glad to hear I'm not too far off base.

(Sat Oct 04 1997 21:01 - ID#158191)
800 numbers
If you want a company's 800 number, call 800-555-1212. Give the name of
the company and ask for the number. Best of all, it's a free call.

(Sat Oct 04 1997 21:01 - ID#57232)
Aurator: Re the Tigris and Euphrates post ... I think all we need is to get the warring parties on line with you .. after several hours of listening to your poetic posts, they will have completely forgotten what it was they were about to fight about!

(Sat Oct 04 1997 21:01 - ID#30116)
Now I know how that happens! My previous post is a bad link, due to a phone line problem.

JTF -- Check this site out for ptions stuff;

(Sat Oct 04 1997 21:02 - ID#215208)
What's going on?
Panda ( 20:48 ) : Interesting chart. I wonder why the volitility baseline is increasing? The previous times the volitility was high, it was spikes associated with major instability in the market. Very different characteristics this time. May be an indication that whatever is ahead of us, it might be totally different than anything we have experienced before, at least in the last 20 years. Is there any rational explanation for what this chart is showing?

(Sat Oct 04 1997 21:02 - ID#30116)
@One more time!
JTF -- Go here;

(Sat Oct 04 1997 21:09 - ID#93199)
Fidelity Select American Gold & Precious metals Charts
5 Years, 120 day, 30 day and hourly charts at:
Click on Gold Sectors

(Sat Oct 04 1997 21:11 - ID#188244)
2BRO2B: Thanks for the info on the deficit. I am an actuary and have always been amused by the fact that if the government had to reserve the way insurance companies are supposed to, we'd see a far different picture. What's even more amusing ( no, sad ) is that most actuaries I know have no idea of what we are talking about, which makes it easy to understand why we are where we are as a society.

(Sat Oct 04 1997 21:12 - ID#30116)
JTF, Donald, et al -- The chart at my 20:48 post would seem to indicate that the 'party' is near. What was that phrase from the fifties? Duck n Cover, Duck n Cover.... "Jane sees a bright flash from the west. Without hesitating, she ducks under her desk for cover and calls her broker... SELL!" :- ) )

Seriously folks, volatility will come down if the market resumes its' 'normal' rise. Otherwise the rise in volatility is indicating a possible ( gulp ) trend change.

(Sat Oct 04 1997 21:16 - ID#30116)
DJ -- Go to my 21:02 post. That URL will give you some information to 'chomp' on. Don't fall asleep reading it! :- ) )

(Sat Oct 04 1997 21:17 - ID#57232)
@vix+Panda -- options/derivatives risk
Panda: Your post ( and graph ) on the volatility index certainly is interesting! Do you know how it is calculated? Is this part of the Black-Scholes calculation of the options pricing? I think someone at this web site already told me this, but I don't remember who it was! If so, perhaps the first or second derivative of this index might be worthwhile in estimating the lucklihood of a serious deviation from baseline -- and increased likelihood that the complex derivatives traders could get caught! Comments?
Do you know of any indicators similar to this that correlate with derivatives trading risk?

Mike Sheller
(Sat Oct 04 1997 21:17 - ID#347447)
Winged Feetz
AURATOR: Mercurially back at you. CHEROKEE: Squeeze a little mezcal for me, too.

(Sat Oct 04 1997 21:17 - ID#30116)

(Sat Oct 04 1997 21:19 - ID#26793)
Aurator: As I said, I like simple solutions. We merely ring up Rand-McNally and have them make new maps restoring the Mesopotamian Empire. Then, after a few years it goes away as per this extract from the post. Problem solved. As they are all just a mess of Potamians they must get along with each other or perish.

"The empire originated in Mesopotamia, the land
between the Tigris and Euphrates rivers," says Liverani, professor
of ancient history at the University of Rome. Assyrian society
began to expand in the 13th century BC, and at its peak in the 7th
century BC, included all of what is now Iraq, Syria, Lebanon and
Israel, most of Jordan, southeast Turkey, northwest Iran and for a
short time, Egypt. Yet this great civilisation collapsed in just a few

Bob M
(Sat Oct 04 1997 21:25 - ID#26059)
Back in 1982 was not the cover of Time magazine saying that the stock market was dead..sentiment at a bottom is very negative...kind of reminds you of some other market..the next few weeks will tell the story in the gold market if a new bull is born..does someone know where I can obtain a gold chart that goes back to 1974 and the lagalization of gold ownership in the US and that the chart is still being updated..drop me an email or a post...Thanks

(Sat Oct 04 1997 21:28 - ID#57232)
@Duck_and_Cover-- oh_well
Panda: Great post! Alas, our early warning indicator would probably be no better than "duck and cover". I guess the vix or something similar would give us an idea of how nervous we should be, at least, even if we could not predict the precise time of the event. Pretty hard to duck when you've been blinded by the flash!
--- I must log off for my son for now ---

(Sat Oct 04 1997 21:35 - ID#26793)
DJ: OK, as this is my night for taking complex problems and reducing them to the simplest possible terms, here it is. There are $482,872,000,000 paper greenback dollars. There are $80,000,000,000,000 derivative book entry dollars. Everyone can't exchange their derivative dollar for a cash dollar at the same time. In a panic everyone wants to swap.

(Sat Oct 04 1997 21:37 - ID#263153)
WSF ( NC ) ID#188244:

....& thanx.

(Sat Oct 04 1997 21:46 - ID#255285)
Old Canard - KISS @ 21:35 ;-)
Donald. Duck.

(Sat Oct 04 1997 23:08 - ID#30116)
@e^-st u(t) factor
FWIW -- If you've watched the XAU index, you'll notice that it does not open with the markets at 9:30. The prices of the stocks have to be established before they can calculate the index on which the derivatives ( options ) are based on. So, as with all real systems, we have a lag in time. Given the many ways that one can create positions with options, such as going 'long' by selling a put ( collecting the 'premium' ) , you must take in to account the off setting position assumed by the market maker or the entity assuming the risk of the trade in order to create a market. If they 'buy' the put, do they go long the stock? Buy calls? Sell the put to a retail customer? Be creative, I'm sure you can think of many more variations on the theme. This is why 'witching' days have heavy volume and either neutral price movement or extreme price fluctuations. All of these off setting trades and differing strategies employed by many traders. If too many things go in a particular direction... ooops! Either you get lots of heat ( volume ) and no movement ( in price ) or you've just hit a patch of black ice at 60 miles per hour and the coefficient of friction isn't the same on all of the tires. Now, what direction and speed are you going on this ice patch? Remember, we don't know what the coefficient of friction is. We just know it's not the same on all four tires... Like I said, this is too simplistic an explanation and I've wasted too many electrons already, but I'm sure that you get the idea. How this seems to work without blowing up is beyond me. The one thing that I'm sure of is this; Options are like hot potatoes, you don't hold one in your hand for to long!

(Sat Oct 04 1997 23:16 - ID#30116)
@Duck'n cover
Regarding 1950s Duck'n cover films...
I love the film clip about the family on a picnic, they've just laid out the plaid cloth on the grass when... A bright flash occurs! They immediately all duck under the 'table' cloth, safe from the A-Bomb blast. If I could only get a hold of my broker that fast and execute trades as quick!

So, Duck'n cover and don't be blinded by the flash of the VIX or the TICK and TRIN shock waves. :- ) )

Good night all....

(Sat Oct 04 1997 23:23 - ID#240142)
@just depends I guess...
Panda...there are also many good sites for learning about options....but like just about anything else...learning ain't the same as doing. A simple search will get anyone all the info one needs on options...there are complete courses ( fundamentals, risk, strategies, etc. ) availble free at many sights. The CBOE has good's one i haven't explored fully yet, but has some interesting stuff. I prefer long calls on good gold stocks ( majors only! ) right now. There are some cheap options out there with incredible upside and very little downside ( cost of the option only ) .

Does anyone have a link for options on Canadian gold equities?

(Sat Oct 04 1997 23:27 - ID#240142)
Here is that options link...

should have previewed first.

BTW...seemed like there was more action at Kitco when gold was dead last month. Now there are signs of life and Saturday night is just about empty.

(Sat Oct 04 1997 23:42 - ID#289384)
Testing: You sound to me as if you are so deliriously happy, joyful and fulfilled you just HAVE to share your joy!!!
Thamk you for the delightful and exremely well written posts. Most specicically the gentlemanly language in which you couched your remarks.
I'm quite sure your li'l family is the most content and joyful in your neighborhood 'cause Daddy's such a good ol' boy and so generous with his good nature!! Enjoy the gold bear dush!!

(Sat Oct 04 1997 23:43 - ID#251306)
If anyone cares, you can sell the Dec 105 xau call for 4.25

If we are now in a gold bull mrkt, selling these options for the next few years will buy the groceries.