Pretty quiet down here in Baltimore tonight Waiting for Cleveland game tomorrow... wish I had some tickets...

Silver is consolidating but COMEX stocks keep falling I'm looking for the average investor to start buying silver in the 7.50-8.00 range look for the U.S. Mint's Eagle and Canadian Maple Leaf to be bought real heavily. U.S. silver stock is being used up for minting of Eagles and commem. programs. Where does Canadian mint get its silver... from the open market, or does Canada have a stockpile too.
Blanchard's Indian silver sink is really starting to materialize...

ALLEN: I just got back to the site after a long day of rehearsals and found your post to me regarding Mt. Lassen. Actually, I know well where it is, but I guess my sarcasm didn't quite make it over the bandwith, Nevertheless, it was sort of fun taking out the map and pinpointing just how preposterous Sollog's prediction is regarding LA being wiped out by an eruption. Funny, with all his moralizing he doesn't include a den of iniquity like San Francisco in the destruction wrought by Lassen even though it is only 100 or so miles away, vs about 650 or so for LA. For Lassen to blow up LA it would basically have to vaporize all of California. A cataclysm of that maginitude, ( assuming that it is even within the realm of possibility, which is absurd ) would be so enormous that it would probably lead to the extinction of all life except the cockroaches. Considering he is the God of Gods, Sollog is pretty dumb! Still, I kinda like his Clinton prediction... Anyway, thanks for the input.

To all: Couldn't resist another post. If ANOTHER is right about gold being sold as a "premium" to keep oil prices down, and gold prices drop when oil prices go up ( because of more gold sales ) , we should be able to figure out what is happening.
1 ) How long have gold bullion prices correlated inversely with oil prices? This is just the opposite of expectations, as I thought that gold tended to follow oil prices, historically. This should be easily checked out.
2 ) Why would gold sales associated with keeping the price of oil "low" in dollars push the price of gold down? If the sales are private, the price of gold should remain unchanged. Is an excess of gold being sold to keep the price down, in addition to gold sales to keep oil prices low?
3 ) Why did the dollar go up when the price of gold went down in the last 1 1/2 years? This would also tend to keep the price of oil low.
4 ) Can central bank gold sales account for the 30% or so differential that ANOTHER refers to in the last 10 years? I don't think so -- not enough gold sold publicly, at least.
ANOTHER'S post is intriging, but I sense that we are still missing something here! Comments on this post, anyone?

I don't think we are just talking about oil. It may be the testing of a new currency as well. Riddles within riddles!

KUSTON: I will detail the silver statement I posted tomorrow after I have a chance to get the details as accurately as my feeble brain permits.

To all: The following process might be what ANOTHER is talking about.
First, oil is priced in dollars. If the price of oil goes up, the mystery party sells gold ( in dollars ) , forcing the price of gold down in dollars ( and the dollar goes up ) . The end result is that oil prices are pushed back down. This would follow ANOTHERS scenario exactly. If oil prices go down due to oversupply, etc. then one reduces gold sales, and the gold price goes back up, leading to a weaker dollar, and higher oil prices. This might also explain why gold has been going down and the dollar up for the last 1 1/2 years. Opinions on this?
The only problem with this is: During times of rising oil prices, who is buying the dollars and selling the gold? All of the Central Banks, or only one? Our Fed? This conclusion is even more disturbing than anything ANOTHER has said so far! If it is not the US, who else would buy dollars for gold? Russia?

RJ -- Hope you really aren't going to wait on 415 platinum. It would appear that the next leg up may very well be underway! Let's see: 455-460 perhaps?

jmark - Since Eldo is his usual vague and wishy-washy self, might I be more specific on some kindly advice. What calls do you have ( what strike price ) ? Did you buy them a while ago and the trend continued down causing them to be worthless and now this recent ( short-term ) advance is bringing some worth back? With more info help could be on the way :- ) Perhaps they have enough worth to sell them and take your small loss/profit and move on. Perhaps you could sell some calls against your current positions turning the 'free-trade' and putting some cash back in your account and have NO risk and make a few bucks on a bigger jump up. Watch the stochastics on this one for overbought. And watch for profit taking that could drive your calls worthless in a matter of hours/days. What is the expiration of your calls? Do you have time for all of this. You could run out of time waiting for a 'next-leg-up' ( as Eldo says ) and say to yourself, damn I should have sold these things. Talk to your broker or an options specialist or just hold on and roll the dice. But, I've seen the dice come up 7's too many times. Funy-mentals are that they were looking for a BIG corn crop but it is still too early to tell. The prelim. #'s came out bullish and the farmers are holding out for higher prices ( wouldn't you? ) . El nio is lurking and so is CHINA ( both wildcards ) . But there is still some weakness in this market and prices can and usually WILL move against you fast.

LOCK IN SOME PROFITS, NOW! Many may do the same tomorrow! ;- )

in eldo's defense he did make the call...but I'll be shortin' this market soooon$$

away...to pop some corn


Strad 00:28 - thanks

"One of the bitter penalties of the appeasers is that even the most
brilliant of them turn out, as persons to be conventional, empty, dull."
The Objectivist, 1966

Isn't that true!!

JTF -- Perhaps there might be something in all that, and it would be worth pursuing, but I swear it'll give me a BIG headache in trying to figure it out. And how would one prove it? Besides, if that were the case, why not have ALL foreign trade settled in goods, paper ( interest bearing ) , and gold. That too might help explain a whole lot of gold sales!

I think Irvine-Boy meant that he would buy with Both hands if Platinum reached 415 or that it would most likely Not get to 415 before the next lift-off. Did you buy your plat and drink your juice today?

Let's strap in and ride this one a loooong way!

away...to watch the shiny white streak across the sky!!


October 7, 1997
Australian economists forecast Asian recession

SYDNEY, Oct 8 ( Reuter ) - An Asian economic crisis is looming with some nations experiencing recession in the next three years and China hitting "serious economic trouble" by 2001, an Australian economic think tank said on Wednesday. The National Institute of Economic and Industry Research warned that corruption, heavy foreign borrowings and rising
interest rates would cause Asian economies to falter. "By our standards there will be a recession across Asia," said Peter Brain, executive director of the institute. "We aren't saying that the region isn't growing fast on a long-term basis because it will be, over the long haul, one of the fastest growing economic regions in the world," said Brain.
"We feel it only right to highlight where the weaknesses lie over the next few years."

But the institute, a respected private think thank of former Melbourne University economists, warned in its report on world economies of a global recession from 2001 to 2002, with China facing serious economic trouble by 2001. "China can not sustain its current strong levels of growth in the next few years," Brain said. "In China we are certain political turmoil or a financial crisis will have a dramatic impact on this powerful player. It isn't a question of if it will happen, but when. Obviously if east Asia goes down, China will eventually follow."

"Some of these countries are dominated by corruption that reaches to the highest levels of businesses who have borrowed more than they can ever hope to pay back," Brain said. Out of Thailand's current $90 billion in foreign debts, $73 billion has been borrowed by the private sector and about $37 billion is short-term borrowings of up to one year maturity.
One of the contributing factors in the economic crisis would be a sharp rise in interest rates, according to the institute.
http://canoe2.canoe.ca/ReutersNews/ASIA-RECESSION.html

October 7, 1997
Australian economists forecast Asian recession

SYDNEY, Oct 8 ( Reuter ) - An Asian economic crisis is looming with some nations experiencing recession in the next three years and China hitting "serious economic trouble" by 2001, an Australian economic think tank said on Wednesday. The National Institute of Economic and Industry Research warned that corruption, heavy foreign borrowings and rising
interest rates would cause Asian economies to falter. "By our standards there will be a recession across Asia," said Peter Brain, executive director of the institute. "We aren't saying that the region isn't growing fast on a long-term basis because it will be, over the long haul, one of the fastest growing economic regions in the world," said Brain.
"We feel it only right to highlight where the weaknesses lie over the next few years."

But the institute, a respected private think thank of former Melbourne University economists, warned in its report on world economies of a global recession from 2001 to 2002, with China facing serious economic trouble by 2001. "China can not sustain its current strong levels of growth in the next few years," Brain said. "In China we are certain political turmoil or a financial crisis will have a dramatic impact on this powerful player. It isn't a question of if it will happen, but when. Obviously if east Asia goes down, China will eventually follow."

"Some of these countries are dominated by corruption that reaches to the highest levels of businesses who have borrowed more than they can ever hope to pay back," Brain said. Out of Thailand's current $90 billion in foreign debts, $73 billion has been borrowed by the private sector and about $37 billion is short-term borrowings of up to one year maturity.
One of the contributing factors in the economic crisis would be a sharp rise in interest rates, according to the institute.
http://canoe2.canoe.ca/ReutersNews/ASIA-RECESSION.html

Steve Peutz: If you are lurking...I think you had the scenario right; just early. ( Now guys, we've all done that many times...right? ) Steve, my question is: what is your next time line estimate for the stock bear to begin and/or drop rapidly?

October 7, 1997
Australian economists forecast Asian recession

SYDNEY, Oct 8 ( Reuter ) - An Asian economic crisis is looming with some nations experiencing recession in the next three years and China hitting "serious economic trouble" by 2001, an Australian economic think tank said on Wednesday. The National Institute of Economic and Industry Research warned that corruption, heavy foreign borrowings and rising interest rates would cause Asian economies to falter. "By our standards there will be a recession across Asia," said Peter Brain, executive director of the institute. "We aren't saying that the region isn't growing fast on a long-term basis because it will be, over the long haul, one of the fastest growing economic regions in the world," said Brain."We feel it only right to highlight where the weaknesses lie over the next few years."

But the institute, a respected private think thank of former Melbourne University economists, warned in its report on world economies of a global recession from 2001 to 2002, with China facing serious economic trouble by 2001. "China can not sustain its current strong levels of growth in the next few years," Brain said. "In China we are certain political turmoil or a financial crisis will have a dramatic impact on this powerful player. It isn't a question of if it will happen, but when. Obviously if east Asia goes down, China will eventually follow."

"Some of these countries are dominated by corruption that reaches to the highest levels of businesses who have borrowed more than they can ever hope to pay back," Brain said. Out of Thailand's current $90 billion in foreign debts, $73 billion has been borrowed by the private sector and about $37 billion is short-term borrowings of up to one year maturity.One of the contributing factors in the economic crisis would be a sharp rise in interest rates, according to the institute.
http://canoe2.canoe.ca/ReutersNews/ASIA-RECESSION.html

Sorry about that post, of many posts.

what is gold to do...this is a narrow channel ;- )

http://www.futuresource.com/cgi-bin/charts32s.exe?chart=Gold+Futures&month=Dec+%2797

away...to the twilight zone


re earls 2132

What a fine boy! Any parent would be proud of him. Hey earl is he your son?

October 8, 1997
China to send mission to buy American goods

BEIJING ( Reuter ) - Weeks before a Sino-U.S. summit, China's foreign trade minister promised to send a mission to the United States to buy American goods to reduce the bulging trade surplus in Beijing's favor, the China Daily said Wednesday. "To reduce the trade imbalance, China will send a purchasing group to the United States soon to sign substantial economic
contracts," the newspaper quoted Wu Yi as telling visiting U.S. Commerce Secretary William Daley Tuesday. She gave no indication of when the mission would visit the United States, how much it would spend or what kind of goods it would buy.

Wu also called on the United States to increase financing for exports to China. Sino-U.S. ties are starting to recover from a long slide that began with the bloody 1989 crackdown by Chinese troops on pro-democracy demonstrations in Beijing's Tiananmen Square.
http://canoe2.canoe.ca/ReutersNews/CHINA-USA.html

10/07/97 & 10/08/97 - then, and now
October 7, 1997; and, October 8, 1997 ( - then; and, - now )
INFLATION RE- AWAKENS, now.
Short-term ( option ) traders, are directed to my suggestions for option-trading portfolios, here; and
repeated - at the end of this communication. Traders, and long-term investors, as well; will
perhaps, find useful information, in the summmary-listing, and review, of my previous,communications - which follow.

Update - for Oct. 7th, and for Oct. 8th, 1997.
Portfolio suggestions for short-term traders:

For short-term traders, oriented/suited, and suitable, to/for these high-risk/-reward, strategies --
( where there is no guarantee of success, or profit ) -- the call options on Comex Silver futures at
$5.50 & $6.00 strikes, written against the March & May futures contracts, are recommended, at this particular time.
In addition, the call options, written against Comex Gold Feb, Apr, & Jun futures; at $340, $350, and $360 strike-prices; are also recommended at this time.

THE CRB index is in a bullish break-out. The bullish, reverse head-&-shoulders pattern -- for
primary precious metals mining stock-companies, ( - that I have been calling-for, for the last two months ) ....has been completed.

The energy sector -- including crude oil, etc.; is signalling 'trouble' in the Middle East.
I recommended the crude oil futures, in my 9/22/97
communication/kitco.com-post, entitled --
"WILD-CARD" . The 'grains' and the 'foreign currencies', are also the "Wild-Card"...for this time. ...as previously outlined.
------------------------------------------------------------------------------------------
This current communication ( 10/07-08/97 ) is, again, dedicated to a nation of "economic
illiterates" ..... a nation that means well,
but forgets its heritage. ....

What follows, are recent updated 'excerpts' of some of my 'postings' , & e-mails -- to
investment friends & associates, including my '2-cents' worth - as added to various
investment discussion groups/boards.

These communications are contributed/directed -- to those of us - 'citizens', savers, investors,
and traders - interested in planning/preparing for the future.

( FOOTNOTE: 'citizens' -- is defined as those open-minded, concerned, & inquiring-enough:
to appreciate the monetary need for a world-wide, medium of exchange, as well as - a store
of value; that cannot be manipulated, changed, re-figured, controlled -- whether by
nations, politicians, bankers, or any particular 'blocks of self-interest' . )

I will attempt ... ( - based on my study of the 'masters', plus my own research-experience,
plus my 'intuition' ) ...
to include: what we might all consider doing next, and doing NOW ....
if we wish to plan for this time of unusual, even rare - opportunity.

Friday, 8/22/97 -- IS THE DAM ABOUT TO BREAK ? : : )
"...before the real BEAR, snares the 'Yuppie-Kingdom's' sacred-cow... ( or is that - ) ... the
sacred
Dow... ( -as in - Dow Jones Industrial Average ) . ... U.S. Treasury Bonds have their highest
'NET-SHORT' position among 'Commercials' ( -the 'big-boys' ) ...... - Accelerating interest
rates ...
( and the "whisper" of rising gold prices ) in the U.S., will be the ACHILLE'S HEEL of the
U.S.
Stock Market, and the U.S. Economy."

Sunday, 8/24/97 -- THE LEAD SOUTS . : : )
" Any considered study and contemplation of the gold & silver mining stocks listed on the
New York Stock Exchange ( -etc. ) , will lead any discerning student of technical timing,
to this conclusion: ....
the precious metals are 'gearing up' for an 'explosion' ... to the upside.

Friday, 9/19/97 -- LIFT-OFF ! : : )
"... Here, at the end of summer, and the beginning of fall, 1997 - we are at the beginning of
the first enduring, intermediate bull-market move, in precious metals, since the first
quarter of '95, and again, since the 4th quarter of '95. ( And, even since early '93, and
even since the 1st/2nd qtr. of '87 ) .
We are indeed, at ... ' Lift-Off '. "

Sunday, 9/21/97 -- LIFT-OFF ABORTED ( - ? ) ( - 'eating-crow' ) . : : )
" So, pride goeth before 'the fall' -- Jumping the gun, and wishful thinking, do not a bull
market make, not even in gold & silver. "

Wednesday, 9/24/97 -- LIFT-OFF RE-INSTATED . : : )
"LIFT-OFF back on track/re-instated. ... the 'count-down' for a precious metals bull-market
-- 'lift-off' -- , has begun. "

Thursday, 9/25/97 -- KITCO.COM ... A CALDRON... + SHAKESPEARE . : : )
"...what a caldron of....creative dialogue... 'The Lead Scouts' are offering us a golden
platter.... of opportunity in the precious metals investment markets, at this particular time.
My 'Shakespeare' may be a little rusty, but ... here goes:

" We at the 'height' ...are ready to decline...
There is a 'tide' in the affairs of men...
Which, taken at the 'flood'...
Leads on to fortune;
Omitted, all the balance of their lives,
Are bound in shallows & in miseries.

"On such a full sea are we now a-float.
We must take the 'current' when it serves,
Or lose our ventures. "

Saturday, 9/27/97 -- THIS..BEST - NOT BE IGNORED . : : )
"We... best be about buying/securing/completing - our positions, and commitments -- in
selected
precious metals investments ( - including mining stocks, gold funds, coins ) ; and including,
for traders ....call options .... at this particular time.

Saturday, 9/27/97 -- WHEN THE TENT ( -the U.S. dollar- ) COLLAPSES . : : )
"... And gold & silver ... will move up; at least for a year. "

Sunday, 10/05/97 -- 'FROM PERSONAL E-MAILS' . : : )
"... To sum it up, briefly - a very poweful, even explosive up-move, in the precious metals, is
upon us. Three to six months from now, most of us, will be in total disbelief - at how high, the
gold & silver prices, and selected mining shares, and their related investment markets ...
( - including gold funds ) , will have risen.

Monday, 10/06/97 -- ALL SYSTEMS 'GO' ( - "Lift-Off" confirmed )
"... By Wednesday, this week, Oct. 8th: the beginning of the first sustained advance in gold
silver, will begin ..... This Christmas, 1997:... Santa Claus is most likely arriving, with a
big bag of gold & silver 'gifts' ....... --- THE PRESENT IS THE POINT OF
POWER..................... ( and 'it' suggests that ) :

#1. individual long-term investors, fund-managers, & financial planners; are advised to
diversify into selected gold & silver mining companies' stocks, if not done so,
already.
#2. Inter-mediate term investors/traders are advised to focus on highly leveraged, &/or
low-priced issues, such as AU, BMG, SSC, AAGIY, & DRFNY.
#3. Short-term traders are advised to consider strategies including 3 to 6 month call
options, --- on selected mining stocks, & on gold & silver futures, at specific
strike prices. ( See - 'below'. )

----------------------------------------------------------------------------
Update for Oct. 7th, and for Oct. 8th, 1997:

Portfolio suggestions for short-term traders:

For short-term traders, oriented/suited, and suitable, to/for these high risk strategies, where there
is no guarantee of success, or profit:...... the call options on Comex Silver futures at $5.50 &
$6.00 strikes, written against the March & May futures contracts, are recommended, at this time.

In addition, the call options written against Comex Gold Feb, Apr, & Jun futures; at $340, $350,
and $360 strike-prices; are here-by recommended, at this time.


For additional information, you are welcome to e-mail me, with your specific objectives.
Sincerely,
David Blair Macrory
goldfevr@pacbell.net
Tierra-$anta Trading

Need to drum-up some bizz down there David?? Sheesh, did you get the note from Bart or what?

away


October 8, 1997
Vietnam says trade pact with U.S. possible in 1998

HANOI, Oct 8 ( Reuter ) - Hanoi and Washington could sign a comprehensive trade pact next year if both sides make positive efforts, Vietnamese Deputy Prime Minister Nguyen Manh Cam was quoted on Wednesday as saying.

Two small, but symbolic, steps towards an accord were taken earlier this year when Hanoi agreed to pay the United States debts which it inherited from the former government of South Vietnam
http://canoe2.canoe.ca/ReutersNews/VIETNAM-USA.html

October 7, 1997
U.S. team shortens visit to S.Korea on E.coli

SEOUL, Oct 8 ( Reuter ) - U.S. scientists and experts, looking into contamination of a U.S. beef shipment to South Korea, have cut short their visit after being satisfied with early meetings, a U.S. Embassy spokesman said on Wednesday.

On September 26, South Korea announced its inspectors had found the O-157:H7 strain of E.coli bacteria in 18.18 tonnes of beef shipped from an IBP Inc plant in Nebraska. The bacterium is an especially virulent form of E.coli and causes kidney failure and death.
http://canoe2.canoe.ca/ReutersNews/KOREA-BEEF.html

EB -- Be nice! David makes a decent poster here.
Here's an orange to chew on. See if you are in agreement; Nov. OJ; below 72.90 busts the short term 'possibilities' and above 74.70 sends it on its way, as of todays numbers.

October 7, 1997
Ukraine and G-7 in talks to close Chernobyl by 2000

KIEV, Ukraine ( AP ) - Canada and the United States will pay $2.5 million
US to repair a deteriorating section of the casing surrounding a ruined
reactor at the Chernobyl nuclear power plant, an official said Tuesday.
http://canoe2.canoe.ca/WorldTicker/CANOE-wire.Ukraine-Chernobyl.html

Eric: How do you do that E with a funny B thing? I enjoy your posts...you remind me of a mischievous younger brother who is quite bright!

David: I think I would agree with your recos, but give yourself some "room for adjustment"... ( just a thought from the over 40 crowd )

Wednesday, October 8, 1997
Rates will continue to rise: Thiessen

By KEITH DAMSELL
Vancouver Bureau The Financial Post
The Bank of Canada signalled yesterday it will continue to raise interest rates gradually to keep inflationary pressures in check and spur on the C$. "Some combination of higher interest rates and a higher Canadian dollar is what we see ahead," Bank of Canada governor Gordon Thiessen told a Vancouver Board of Trade luncheon. There's much evidence to indicate the Canadian economy is continuing to grow, he said, adding the full impact of low interest rates won't be felt for another 12 to 18 months. In his view, expansion marks an opportune time for the central bank to wean the economy from its dependence on low interest rates.

Unregulated growth can lead to higher interest rates, increased debt loads, unemployment and recession, he said. "You risk losing control and getting into serious trouble.

Thiessen said the unemployment rate is much more complicated than inflation to influence. As for the output gap, how much room there is left for the economy to grow before it reaches its full potential, Thiessen declined to say. He said the gap is narrowing and the bank will provide an update in November.
http://canoe2.canoe.ca/FP/econ_oct8_rateswillc.html

ELDO: Would you be recommending May OJ calls? what strike? other thoughts?

6pak: Nice to see that you're on the job. What's your personal opinion: will we see a true revival in the gold price in next 6 wks? 6 mos.?

Savage -- I'm the wrong person to ask about options of deferred contracts. I operate only with futures and do not ask what something 'must' be way out there in time. Otherwise, too much in the way of 'belief' factors have to be built into a decision. I'm like everyone else; Only have 20-20 vision in hindsight. Usually it is difficult enough in seeing only one day ahead!

ELDO: Thanks for response. I've been trying to buy some OJ calls and the price keeps moving away from me. Don't want to chase it...but I would like to know what others think. Am I being too obstinate...time will tell.

JTF & Another : You two have me completely confused. Isn't the gold
part of any oil transaction the insurance for the transaction? Once the
transaction is completed, I thought the gold sale was reversed. The
only way the liquidly would be dried up is if the oil transaction didn't
take place.

Another's conclusions are better then any other conclusion I have heard.
Correct me if I miss understand these:
1 ) The LBMA announced the volume with the CB's approval.
2 ) The announcement was used to fight the corner in gold.
3 ) The free flow of oil and gold in the world has delayed the fiddler
from collecting on the dance the CB's have been enjoying.

Savage at this moment in time, I am frustrated with the whole stock
market, gold thing. My take, it should have been a crash in stocks, and a
huge rise in gold,weeks ago. The major world economic player's are doing
a great job of keeping the world economic system going forward. The best
that can be done, is to continue to be prepared. Yes, the time line is
getting very short. There was a time that economic condition's had a base of facts that could be supported, and referenced, to gain a feel for the
near term. I suggest not no more, the reality dictates, cooked books and
numbers. Sooooo, it is anyone's guess eh!

SAVAGE- you may want to try something else with OJ. sell 65 puts basis
the march contract. Premium is about 2.?? should they expire in the money, you will be long @ about 62.?? ( 65 minus premium recieved ) wich is at or below 20 year lows in OJ. I'm waiting for a premium of about 3 points if I can get it . Good luck. Joe

Savage -- Yeah. I would know exactly what you mean. A futures contract can/will go up and down a whole lot of times by then. Who's to know where it'll wind up at? But if you find a decent price to buy at, then liquidate at a profit, and do that a few times between now and then, who can complain but the seller of them? Perhaps EB would have been more 'favorable' towards my 'wishy-washy' response to Jmark if I had included this answer in that posting. I don't do options so I really do not like to comment on them too much. The wrong strike price; the wrong timing on the purchase; A non-volatile commodity, can all kill them.

Hey there Mr. Oracle

I have an essay here which directly refutes your information on the shareholders of the New York Fed: http://garnet.acns.fsu.edu/~eflahert/own.html

Could you please tell us your source for the shareholders? I hope it wasn't just taken from some wacked out conspiracy theorist and not thoroughly researched.

Organ Great Post! Facts, jes the fax...;- )

Organ how are things with the Option Forces model you were looking at af ew months ago?

testing

Interesting numbers showing up! Particularly since last time I saw this particular scenario happen was the first overnight breakout of this whole move! Could be in the works again as 334.4 Dec should be enough to put it over. That's +1.1 from the close, and that is exactly what BMI now shows, as delayed as they are. We'll see!

to All
The gold/silver ratio has broken down below the 63-64
area and looks headed for 1988 low of 57.7. Thus I expect
at the end of this move silver will be some 10 per better
off than gold. However, after 57.7 has been cleared,
There should be much better action in gold.
We could have a situation where silver moves to 5.75,
and gold sits, and everybody gets frustrated.
Alternatively, Silver sits and gold falls to 303. Take your
choice.

to All
The gold/silver ratio has broken down below the 63-64
area and looks headed for 1988 low of 57.7. Thus I expect
at the end of this move silver will be some 10 per better
off than gold. However, after 57.7 has been cleared,
There should be much better action in gold.
We could have a situation where silver moves to 5.75,
and gold sits, and everybody gets frustrated.
Alternatively, Silver sits and gold falls to 303. Take your
choice.

Dow/Gold Ratio = 24.64 last night. I find it interesting that the last time the Dow was at these levels the DG Ratio was around 25.5, one ounce higher. This latest Dow rally is much less convincing to me for that reason.

XAU/Spot Ratio = .319 last night close.

Some of the chartists were saying gold would fill a previous gap up with a move to 330.90. It looks like it did that last night and is acting well in London.

Jakarta unmoved as the Rupiah stays in free fall.

http://www.afr.com.au/content/971008/world/wjakarta.html

G'day Donald. How can the U.S. markets keep powering onward and upward as Asia falls in a heap? Are the Asians buying American securities as a bastion against their own problems? Is this "Fortress America" ala 1939 all over again, or are you guys ( Yanks ) gonna wake up to the fact that when your trading partners suffer, the bottom line is eventually going to catch up with Mr. & Mrs. Smith on Main Street, U.S.A.?

XAU Ratio fans: With our new XAU Ratio at .319 and the Y.Auger chart heading for a "touch" on the upside it would seem safe to buy gold stocks here. If our ratio were at .319 and the Y.Auger chart had completed a "touch" or was moving away from one I would be out of gold stocks or selling short. A single chart that combined the two ratios would appear to have great predictive value. Comments?

Gold up a buck. Silver up 5 cents. Gooo Yanks/Rebs/Canucks!!! I've started to "nibble" again and need a little help from you guys!!

Auracious--where are ya mate??

Ted-- wake up!!! You were rather testy yestaday mate!!?? Couldn't have lost ALL yer money at the Casino last night!!!

Earl--I am just itching to repost your post to the idiot today!! Best post of the MONTH, mate. I have bookmarked it and shall flash it at Aurator next time I hear an Aussie joke. Earl--how the hell doyadothatanyway????

Silver creeps back towards 5.30 in overnight trading.

Retail Sales Expected To Drop From August To
September

Lousy results for September motor vehicle sales raised the
possibility of an August to September drop by total retail sales,
which would be the first month-to-month setback since May.
September sales of US-built light motor vehicles were off by an
unexpectedly deep 6.4% from a year earlier. Nevertheless,
despite a 4.4% August to September retreat by the
seasonally-adjusted sales pace of US-built light motor vehicles,
this measure of car and light truck purchases still advanced by a
robust 28% annualized from the second to the third quarter.

As derived from expectations of nothing more than a 4.5%
year-to-year increase by September same store sales, the 43%
of retail sales that most closely conform to our sample of same
store sales may record nothing better than a 0.7% drop from
August to September. In order to keep retail sales unchanged
from the previous month in September the remaining 57 % of
retail sales need to grow by at least 0.5%. However, the
attainment of such a gain seems unlikely if, as now expected,
autodealerships' 43% of "retail sales excluding those receipts
ordinarily found under same store sales" drops sharply from
August to September.

A 0.7% retreat by retail sales from August to September would
leave retail sales growing by merely 4.6% from a year ago during
1997's third quarter. So slow of a pace for consumer spending
will prevent inflation risks from rising perceptibly.

Detroit has to panic in response to the latest drop by auto sales.
The latest four week observation showed the US production of
light motor vehicles to be up by 14% from the contiguous four
weeks, while growing by 2% year-to-year notwithstanding
September's possibly very deep yearly plunge by sales.

Kaplan--Required reading every day.

"... a modest inflow into gold mutual funds could cause an upside breakout."

http://www.geocities.com/WallStreet/4915/index.html

C'mon compadres--get outta the sack!!! International markets--black cyberink everywhere!!! ( Except S. Korea -3.11% ) . J'burg gold +9.4 ( .92% ) . Gonna be a good day for the XAU????

Donald, Did you see my comment yesterday concerning the strange properties of the "touching" on the chart you refer to?

October 8, 1997


Market Place: 1,000-Year Bonds, in Time for the Millennium

By FLOYD NORRIS

EW YORK -- Will Republic National Bank still be around in 2997?

It appears that bond investors are confident it will. Lehman Brothers said Tuesday that it
was offering $250 million in 1,000-year bonds for Safra Republic Holdings SA, a European
subsidiary of the New York bank holding company. A Lehman official said the offering was going
well, but was not yet sold out.

The bonds were sold with a coupon of 7.125 percent, and priced to yield about 92- to
94-hundredths of a percentage point more than 30-year Treasuries now yield, or about 7.21
percent.

If all goes well for bondholders, they will get that amount of interest each year for the next 1,000
years, and then will get their money back. Given that no currency in the world has yet endured for
1,000 years, it is not easy to estimate what a dollar will then be worth.

There is no guarantee that the bonds will stay outstanding for anything like as long as that. The
bonds can be bought back by Republic at any time, Lehman said, but that call provision is a
relatively harsh one, with Republic having to buy back the bonds at a price that would give the
investors a yield of 25 basis points -- or hundredths of a percentage point -- more than the yield on
the 30-year Treasury bond at the time of the call.

In essence, Republic sold a security that will be viewed by investors as similar to a preferred stock,
which has no stated maturity date. And it is likely that banking regulators will view the bonds as
equivalent to preferred stock when assessing the company's capital structure.

But Republic will be able to deduct the interest payments it makes from its taxable income, as it
can deduct any interest payments. Dividend payments on preferred stock are not deductible.

The Clinton administration, worried about a number of 100-year bond issues by corporations,
proposed last year that interest not be deductible on bonds with a final maturity of more than 40
years after issuance. But Congress rejected the proposal. Still, many lawyers believe the Treasury
would reject deductions by a U.S. company on bonds with a maturity of more than 100 years.

Republic, the American company, has only a minority interest in the European subsidiary, which is
based in Luxembourg. And it believes that under Luxembourg law the interest payments will be
deductible.

The fact that the bonds did not sell out on the first day shows that investors needed some
persuading, as they did a few years ago when 100-year bonds returned for the first time since the
late 19th century.

Those old 100-year bonds were sold primarily by railroads, with investors taking comfort in the
fact they were sold in "gold dollars," which guaranteed investors that they would be compensated
if the dollar was devalued relative to gold.

Alas, that promise was outlawed by Congress in the 1930s, an act that was upheld by the Supreme
Court on a 5-4 vote, and those 100-year bonds proved to be exceedingly poor investments, as
interest rates rose well above the low rates at which they were issued.

In the late 1970s and early 1980s, owners of 30-year Treasury bonds suffered big losses if they
sold their bonds, because rapidly rising interest rates had driven down the value of existing bonds.
Those bonds carried the assurance that investors would get their money out, in nominal dollars, in
three decades, a fact that helped to hold down the losses.

These bonds will take 100 decades to mature, and thus would be expected to perform even worse if
rates did soar.

It is obvious that no buyer of 1,000-year bonds will be around at maturity, and institutions that buy
bonds tend to assume that they will be able to sell the bonds in time if it appears that interest rates
are soaring, as would be likely to happen if inflation were to recur. At the moment, inflation is
quiet, and few expect it to revive in the near future.

In the early 1980s, investors would have laughed at the idea of such bonds. Now, the fact that such
bonds can be issued is yet another indication of how little worry there is that inflation could ever
come back.

Mornin Mate! Me testy...NAH....Been trying to post for about ten minutes but zippo happens....can access about 10% of the sites on the "net"...could this possibly be my new-new super-duper up-graded ISP with the now reliable ( what's that, I live in Cape Breton ) service that was supposed to start last Wednesday....hm....

December gold up $1.20. Looks like XAU will be up this morning. But dangerous to chase a rally unless volume picks up.

Overnight gold rally probably reflects the dollar'sharp drop versus the yen

For all you Bre-X junkies:
October 8, 1997

Bre-X Investigators Place Blame
On Geologists for Tampering

By BEN DUMMETT
Staff Reporter of THE WALL STREET JOURNAL

Bre-X Minerals Ltd., the scandal-plagued mining
company, says private investigators it hired uncovered a
history of tampering with gold samples at the company's
Busang deposit in Indonesia, which they blamed on
geologists at the site.

Shares of Bre-X, based in Calgary, Alberta, became
worthless after claims of a huge gold find at Busang
turned out to be fraudulent in May. Bre-X is in Canadian
bankruptcy-court protection from creditors, as it fends
off numerous lawsuits filed by disgruntled investors.

Bre-X's private investigators at Forensic Investigative
Associates Inc., Toronto, said they found no evidence
that senior company executives including David Walsh,
chairman, chief executive and president, were either
involved or had any knowledge of the gold tampering.
Mr. Walsh was unavailable for comment.

Instead, the report laid blame squarely on Bre-X
geologist Michael de Guzman, who committed suicide
earlier this year, just before the discovery that Busang
samples were salted with gold; and Cesar Puspos,
another geologist at Busang, for masterminding the
salting activity. Mr. Puspos couldn't be located for
comment after the report was issued.

In its 430-page report, Forensic says gold tampering
began as early as December 1993 to keep the
exploration program from being discontinued after the
first two drill holes didn't turn up any gold.

"We were advised that there was an intention to stop the
drilling," Forensic said. But then the fraud apparently
spun out of control, as salting continued thereafter until
early March of this year, according to Forensic, which
conducted interviews with more than 150 witnesses for
its report.

After the first two drill holes showed no gold, Forensic
believes Mr. De Guzman instructed Mr. Puspos to salt
the next two holes, known as BRH 3 and BRH 4.
"Shavings of a man-made copper-gold alloy were found
to have been used as a salting agent in the upper portion
of BRH 3 and alluvial gold was found in the lower
portions of BRH 3 and BRH 4," Forensic said.

Salting continued, primarily with alluvial gold, until earlier
this year, with several different methods being used,
Forensic said. Alluvial gold is that found in streams and
river beds and tends to be smooth and rounded.

Bre-X said it has delivered a copy of Forensic's report
to the Royal Canadian Mounted Police, or RCMP,
which is doing its own investigation into the Bre-X affair.
An RCMP spokesman wasn't immediately available for
comment. Before the release of Forensic's report, an
RCMP spokesman had declined to comment on
Forensic's investigation, or its own work.

Between July and September 1995, Forensic said it
believes Mr. de Guzman and Mr. Puspos used a
laboratory built at Busang to salt the drill samples, but
moved the operation to Bre-X's office in Samarinda,
Indonesia, to do the tampering, after results at the
Busang laboratory proved erratic, Forensic said.

Forensic said, "We believe that at Samarinda from about
October 1995 to about March 1997, Mr. Puspos,
under the direction of Mr. de Guzman, systematically
directed the opening of sample bags from Busang before
they were dispatched to PT Indo Assay Laboratories,"
the Indonesian firm that tested the samples.

Forensic recommended detailed examinations be made
of Bre-X's financial, operational and communications
records, as well as the company's geological records,
paying particular attention to who handled all core
samples taken from Busang.










Return to top of page


Copyright  1997 Dow Jones & Company, Inc. All Rights Reserved.

Here is the real reason why gold is starting to perk up. The smart money is beginning to perceive that a BIG drop in the U.S. financial markets is not far off. And with U.S.monetary policy still relatively tight as shown by today's flat yield curve, the Fed probably would react by aggressively easing monetary policy. My experience has been that the yield curve, not monetary growth rates, provides the best gauge of monetary stringency.



When Would U.S. Ease Monetary Policy?

September 12, 1997 - Gold Monitor, Murenbeeld and Associates

Speaking at Stanford University the evening of September 5, Greenspan recounted some of
the Feds responses to key events since becoming chairman in 1987. On the stock market
crash of October 1987: "Unlike many uncertain situations that have confronted monetary
policy, there was little question that the appropriate central bank action was to ease policy
significantly." On the commercial property price bust of the late 1980s and early 1990s: "Not
unexpectedly, our policy response was to move toward significant ease...a stimulative
monetary policy was deliberately maintained well into the early expansion period" ( the post
1990-91 recession period ) .

My point? There can be little doubt that a stock market crash today will meet with a similar,
dramatic easing of monetary policy. Indeed, the Feds only response to financial calamity is
one of dramatic policy ease - the Fed has no other policy options. Given that the Fed has been
relatively tight ( witness the dollar, the yield curve, and the recent low growth of the
monetary aggregates ) a sudden, stock market-induced relaxation of policy could do wonders
for the gold price. Such has been our view, and Greenspan would appear to confirm the basic
tenants of this view.

Of course, it isnt clear that there is a financial calamity on the near term horizon. Surveying
developments around the world however ( the Japanese 1997 II GDP contraction, the SE
Asian currency crisis, fiscal contraction in Europe ) suggests that the potential for a significant
shock in the financial markets is not insignificant. The U.S. dollar, being too high, is also
adding to worries that earnings of the key Dow stocks will disappoint. And U.S. officials are
publicly chastising the Japanese again for a lack of action on domestic market liberalization
and a rising trade surplus. Well see. My view is that U.S. monetary policy is as likely to turn
sharply stimulative as it is to be tightened in a "pre-emptive" move to contain future inflation.

As an aside, let me note that in the same speech Greenspan stated that gold was once the
anchor for monetary policy, prior to WWI, "but it was eventually abandoned because it
restrained the type of discretionary monetary and fiscal policies that modern democracies
appear to value". Indeed! A gold standard monetary system would not allow the Fed to ease
monetary policy dramatically in the face of financial calamity, hence - as Milton Friedman
argued - the Depression. If any of you "long wave" theorists want to bet against another
depression buy gold ( the Kondratieff wave suggests that we are overdue for another
depression ) . Its a sure bet that U.S. officials will not wait 3-4 years before easing monetary
policy ( or revaluing gold as in the case of the Gold Reserve Act of 1934 ) in the event of a
financial/banking crisis with depression-like implications.

Organ, I read the Federal Reserve page your post pointed to and one thing struck me very clearly: it did a masterful job of NOT answering the very simple question: WHO THEN, DOES OWN THE FEDERAL RESERVE. Don't throw dead-end crap at me like "American banks". "goto" it alway the way down the path of corporate ownership until it ends in a person or private corporation. Since the Fed document so assiduously avoided answering that question, they have something to hide.

I don't know if somebody has already posted this story or not, but the Japanese doing a squeeze play on gold? Control of the Dollar by 'other' means?
http://biz.yahoo.com/finance/97/10/08/z0000_3.html

Nice day on Mount Washington.
http://www.mountwashington.org/mtw_camera.htm

When the NIKKEI 225 fell 1.75% yesterday, the Fidelity Japan small cap fund eased just 0.3%. Accumulation picking up in this very depressed sector despite all the Asia doom and gloom talk, This is one of the very few investments that might have an even better risk/reward than gold funds.

Bart-Time to start selling Hard drives.Need more space for internet explorer 4.Happy Trails

Panda: Thanks! Mt Washington is one of my favorite places! Jewell trail,
Tuckerman's ravine, Lake-of-the-clouds-hut, and Old Peppersass!

My, my. What a read the WSJ is today! Women wearing thigh high slit skirts at work along with 4 1/2 inch stilleto heels! Corporate executives borrowing money to buy company stock! Union Pacific railroad caught up in a delivery nightmare! They don't have enough men, locomotives, or track to deliver all of their cargo!!! Lumber stands stacked up at the mills and people are being sent home for lack of material in certain businesses. The Christmas season is soon approaching! :- ) )

"There are no bottlenecks in the economy." Those will be famous last words... Oh, don't forget Japan trying to squeeze gold shorts. :- ) )

Poorboy....E-4 is getting a lot of BAD press...Lots of "stalls" and re-booting going on...are you hearing good/bad things??

JTF -- I frequent the lakes region and the Mt. Valley area when I'm in-between contracts. Been on the 'cog' once. Nice ride, the summit was fogged in with 40 MPH winds. Otherwise known as a 'normal' day. :- ) )

Of to trading, be in and out...

Out for the day. Be back around 1900. Have a nice day all.

Carl: Yes, I saw that but I have been very busy with non-Kitco stuff. I hope to have more time today. I think there is value in the combination of the several ratio numbers we are working with. It seems to be safe to buy metal and gold stocks right now. If the blue line on the Auger chart touches the red line on the Auger chart AND our new XAU/Spot Ratio is over .30 when that happens, I would be inclined to dump the stocks but hold the metal based upon past historical data. How do you see it?

Indonesia in Talks With IMF, World Bank on Rupiah Collapse

Indonesia is in ``intensive'' consultations with the International Monetary Fund and the World Bank
on how to restore stability to the rupiah and improve the country's financial system, said Finance
Minister Mar'ie Mohammad. Indonesia is turning to the international institutions amid a collapse of
the rupiah, which tumbled to a record low against the U.S. dollar this week on fears that Indonesian
companies can't pay the $55 billion they owe in foreign debt.

BillD-E-4 works fine.I give it a B+.Busy buying Gold today.Maybe up for while.Happy Trails

TED: http://biz.yahoo.com/bw/97/10/08/cde_y0023_1.html
Here's why CDE dropped so far yesterday. They were issuing $125,000,000 of convertible debentures, which will dilute the value of outstanding shares by eventually creating more shares when the bonds are turned into stock. Looks like the drop in share price took care of the dilution all at once. Now the question is whether to buy the debentures.

http://biz.yahoo.com/finance/97/10/08/y0004_z00_2.html

TED: On re-reading the news, only institutions can buy the debentures, convertible at 17.25 per share. That's a price I could sell my shares at, too, thank you very much.

http://biz.yahoo.com/finance/97/10/08/z0000_z00_5.html

Ted: Make that 17.45 a share. Even better. Call me now at 1-800-PROFIT. Operators are standing by to take your call. ; )

http://biz.yahoo.com/finance/97/10/08/z0009_43.html

Could someone please educate me on Gold Lease Rates. I been trying to fiqure out why they are important and what it means when they move up or down. Also, the relationship between monthly and yearly lease rates. If you don't want to insult the intelligence of the pros here on Kitco, please e-mail me at the address above.

Thanks

Machf15

Donald:

Re. your 07:02 post

Using this formula adds another dimension to the relationship of xau and au:

.3333 x xau, minus .1/10th spot au.

A positive sum answer indicates gold stocks are fairly valued, a negative sum answer indicates gold stocks are undervalued relative to spot gold. The higher the positive sum the higher the degree of risk associated with gold stocks. The lower the negative sum the lower degree of risk with gold stocks. This works particularly well with ABX, since its weighting in the xau is so high. In fact, if you chart the xau/abx and force them to overlap, you will note they form an almost one-for-one movement. You could also use this crude but effective timing tool formula to force the xau and au to move within a range where the xau will intersect to the upside and downside through the au line. In this case, anytime the xau line breaches the au line to the upside/downside, the degree of risk increases/decreases. This is simply a visualization of the subtraction foumula mentioned earlier. Just plot 1/3rd xau and 1/10th au. This is not a predictive tool so much as a "relative value tool". But it does work especially well with xau stocks. Check it against history.

In fact, plotting au/xau leads me to think that over the medium and long term, au always leads in establishing a trend for the direction of the gold stocks. This seems logical since au value is the single most important asset of any mining company.

Spud Master - I saw this a while back on a BGO line post, it was in response to a question similar to your's. I don't know if it is true or not - if some one can confirm any of it I would appreciate.
o: John Soileau ( 7247 )
From: John Barendrecht
Oct 1 1997 1:28AM EST
Reply #7258 of 7266

Some facts about the Fed from an article by the Oracle of Alberta

In 1792 the U.S. dollar was conceived and was made equivalent to 24.75 grains of gold.

In 1797 John Adams warned Thomas Jefferson that control over the issuance of money should
never fall into the hands of private interests, as it had in the case of the Bank of England and
Bank of France.

On December 13, 1913 President Woodrow Wilson helped establish the Federal Reserve
System ( the U.S. central bank ) with equity financing of $1 billion from private merchant banks.
The Fed, with its 12 Federal Reserve Banks, would be run by a board of private merchant
bankers and would have absolute powers to manipulate the U.S. money supply.

June 10, 1932, Louis T. McFadden, chair of the House Banking and Currency Committee states
that "some people think the Federal Reserve Banks are United States Government institutions.
They are not Government Institutions. They are private credit monopolies that prey upon the
people of the United States for the benefit of themselves and their foreign and domestic
swindlers; and rich and predatory money lenders."

The New York Federal Reserve bank, the largest of the 12 Reserve Banks, provides a unique
custodial responsibility for gold, including storing about one-third of the world's official gold stock
( 12,000 tons ) on behalf of about sixty countries, central banks, and international organizations.

According to an article by Harvey Martin, those names have only recently been revealed through
Standard and Poor sources. The top controllers of the top Federal Reserve Bank in New York
include:

Rothschild banks of London and Berlin
Lazard Brothers Banks of Paris
Israel Moses Seif Banks of Italy
Warburg Bank of Hamburg and Amsterdam
Lehman Brothers Bank of New York
Kuhn, Loeb Bank of New York
Chase Manhattan Bank of New York ( Rockefeller ) , which controls all of the other 11 Reserve
Banks.
Goldman, Sachs Bank of New York.

The Rockefeller banking group owns 22 percent of shares of the Federal Reserve Bank in New
York and holds 53 percent of the shares in the Federal Reserve System.

Credit's too easy, regulator warns

Robert A. Rosenblatt
Los Angeles Times

WASHINGTON - The chief U.S. financial regulator warned Sunday that banks
are making increasingly risky loans, a practice that could come back to
haunt them, especially if the economy turns sour.

If "we dramatically change the rules now about banking and commerce ...
we may well end up doing more harm that good," he said. "And as with all
rule changes by government, we are likely to find it impossible to
correct our errors promptly, if at all."

Comptroller of the Currency Eugene Ludwig told the annual convention of
the American Bankers Association in Boston that federal bank examiners
would tighten their surveillance and regulation of the 2,000 federally
chartered banks to try to head off any major bank failures.

Credit standards are slipping in "almost every category of loans except
for agricultural loans" as banks rush to make questionable loans rather
than lose business to other financial institutions, Ludwig said.

He reminded the bankers, now enjoying record profits, of the 1980's, when
banks collapsed. "We have learned before that imprudent loans made in the
heady atmosphere of good times come back to haunt you when the good times
fade," Ludwig said. "No one wants to learn that lesson one more time."

That was also the time when more than 700 savings and load institutions
collapsed, costing the taxpayer-supported system of deposit insurance
$150 billion. Like the S&L industry then, the banks today carry federal
insurance on deposits up to $100,000. So their depositors figure to be
made whole no matter what happens, although taxpayers could once again be
left footing the bill.

Ludwig's speech was unusually frank because he fears the banks have been
ignoring his previous warnings. In 1995, he created a National Credit
Committee of veteran bank examiners to look at lending standards and
risks in the banking system. He warned the industry in April of 1995,
December of 1996 and August of this year about slipping standards.

"Unfortunately, there is every indication these standards have slipped
further," he said.

Because consumers are increasingly paying their credit card debts late
or not at all, banks tightened the standards for issuing cards, Ludwig
noted. But this was offset "by an easing in terms for home equity and
residential real estate loans."

Meanwhile, he said, many consumers are paying for such big-ticket items
as cars with unsecured credit cards rather than ordinary secured loans.

Bankers admit that competition "is driving them to make loans that might
or might not make sense on their merits," Ludwig said. "They tell us
that if they don't make these loans, a competitor will. In the process,
a good potential customer might be lost forever."

The comptroller rejected this explanation as ill thought-out. "True or
not, such arguments will be small consolation when the economy becomes
more volatile and the loans turn sour," he said.

Among the measures that Ludwig is ordering are these:

* Federal bank examiners will review credit underwriting standards
with senior management at every national bank.
* His office will prepare "definitive guidance" for banks on the best
methods to manage risk in their loans.
* "Examiners will evaluate every national bank's ability to deal with
increases in problem loans and follow up with bank management to make
sure any weaknesses are corrected."
* The heads of banks will be forced to become directly involved.
"Examiners will personally meet with the chief executive officer of
every national bank to discuss any loans that demand the CEO's
attention," Ludwig said.

The comptroller is the regulator for federally chartered banks, which
hold more than half the assets of the banking system.

Federal Reserve Board Chairman Alan Greenspan told the bankers'
convention Sunday that technology and the beginnings of financial
deregulation had "changed forever our ability to place commercial
banking, investment banking, insurance underwriting and insurance sales
into neat separate boxes.

Market pressures are rising "to permit the common ownership of financial
and non-financial firms," Greenspan noted. He said he intended to resist
such pressures.

If "we dramatically change the rules now about banking and commerce ...
we may well end up doing more harm that good," he said. "And as with all
rule changes by government, we are likely to find it impossible to
correct our errors promptly, if at all."

I was just gonna ask for some en news...and Viol! Get Down! big Don-o-News!

This is great stuff. The en will start it's move now. I think a bottom may have been reached for a NICE move up, up, and...

AWAY!


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 Gold Mine production:
http://www.gold-eagle.com/gold_digest/baron1007.html

Sig: Thanks for the comment. Let me think about that.

Dow down -70 with neg tic of -900 ... now need some volume in the PM's..
Go SSC, ECO, GSR...

EB: CNBC is saying that the weakness in the 30 year bond is due to concern over what Greenspan might say in his speech today. It seems more like Japanese activity to me from those posts. Could this be the day the Dipsters have been waiting for?

Panda - Greenspan Speaking and is warning that the law of supply and demand can not be ignored. MARKETS DOWN except GOLD

Gold and Silver lease rates up with prices up moderatly. Looking good.
Steady as she goes. : - )

Highrise -- Like I said, the Wall Street Journal was an interesting 'read' this morning. Along with the Reuters URL I posted earlier, it seems that gold will be the tool used to slow this bull down. You just have to be careful not to break the bulls legs in the process though... :- ) )

AG is doing some jawboning this A.M. Doing a good job too. It seems that the Snp and Dow are out of whack though. Dow down ~80 and SnP off 9.75. Snp would seem to indicate Dow decline of ~120 points right now. Advance /Decline == 839/1623 down vol ~twice the up volume. MSFT and MOT up, most others off...

Savage; Re your 0229, I am curious as to what JO calls you were trying to buy that were running away from your bid as I have been trying to sell mar 105 calls and they have been running away from my bid.

Greenspan just said 'stock market growth is unsustainable...' Homer, are you listening???

Even the Russell 2000 is taking a hit today... HUI and XAU up some. Like I said, when the Union Pacific Railroad is using boats ( ships ) to move cargo on the high seas because they don't have the capacity to do the same on land....

I don't need Greenspan to tell me what may happen. The world is listening to a man who is saying nothing new and has no idea what is going to happen in the markets. Just turn it off and let the markets go about their business. Go Gold!!

Anyone else having trouble getting into this site?? Looks like Greasepan is tryin to prick the bubble again ( Dow Down 85 ) --"re-emergence of inflation is still the greatest threat" Elf: Will you accept a collect call from Ted??==congrats!...Panda:Our weather ( 43 + drizzle+fog+wind ) is almost identical to MT.Washington Summit...

Greenspan talking about retirement plans now... Time for a day trip, markets going down except for gold.... :- )

Hi Panda and yes I am listening.....DOOOOH...dow down 111

TED -- Beutiful day down here! Sunny and highes forecast to the mid sixties. Was 39 this morning. Fall is here! Later...

I can't spell either! Beautiful, that's how it's spelled, ya, right... Dooooh!

It's very important for Dec. silver to bust above the 5.30 level. Then IT will be talkin'! Next stop at least be 5.42 area.

Dec gold meeting quite a bit of resistance at 335. Everybody cross your fingers! Failure to penetrate it and maintain would NOT be good!

Dow down 114 and silver up 7 cents--I can bearly contain myself.

XAU up modestly this morning, but volume is lacking. This rally will soon peter out unless volume picks up.

XAU up modestly this morning, but volume is lacking. This rally will soon peter out unless volume picks up.

XAU up modestly this morning, but volume is lacking. This rally will soon peter out unless volume picks up.

MoreGold,
Since you were the first to mention "lease rates" in a post after I asked for help ( which was totally ignored by all ) , I will repeat my question to you and ask that you educate me:

Could someone please educate me on Gold Lease Rates. I been trying to fiqure out why they are important
and what it means when they move up or down. Also, the relationship between monthly and yearly lease rates.


Thanks,

Machf15

To all: My brainstorming last night was an attempt to analyze logically ANOTHER's statements on the assumption they are true. Inconsistencies come out of such an analysis, so that one can discern truth from falsehood. I have no inside information of my own, and my interest is to stimulate discussion on a mystery which seems to be controlling much of our futures. I doubt that we will ever know fully what is going on with the LBMA, and why for the last year or so the dollar and gold are inversly coorelated, but that gold in non-US$ linked prices has not dropped anywhere near as much!
kuston: If gold is only insurance during oil transactions, then it should only play a passive role, and gold price should not be affected. Are you saying that the gold is to be used only as collateral, until the deal is closed? Couldn't some of the oil-producing coutries demand gold and get it? Heaven forbid! Gold as money -- heresy. Please let us all know what you know. If we all do this, we might be able to unwrap the enigma.
Organ: I printed your post that you say contradicts Oracle of Alberta. I also have read somewhere that a number of banks that represent "old money" in europe have considerable influence over our Fed Reserve. I don't know details, but something like this is highly likely. It may not be a conspiracy in the true sense, and there may be several conflicting agendas. Our A. Greenspan is undoubtedly aware of most of whats going on behind the scenes. I don't know what his real priorities are.
I think it's worthwhile to gather as much information as possible and analytically decipher this, to separate the truth from the falsehood. One thing I've learned over the years is that the opposite of imperfect is not perfect -- we will never know exactly what is going on -- but we should keep at it, and work continuously on our model -- much the same as coming up with a new physical model of the universe! Sherlock Holmes, where are you?

Would someone please explain what "negative tic" is, as in BillD's post:
"Dow down -70 with neg tic of -900". Thanks in advance.

XAU is acting well. Down early in the week and then moves higher later into the week. All this adds up to a constructive weekly XAU chart. Would like to see bigger move starting now and into Friday.

Just sold more stox ( WEC ) ....Thankx Greasepan for makin my feeble-mind up!
Panda:41 degrees+ droppin like a rock...hard frost ( versus soft one ) predicted fer tonight....Time to fire-up the wood furnace!

Go away Battapaglia.

The inimitable Mike Sheller has located another Rhino ready for the stalking. This time its the Copper Rhino currently grazing at support, but close to explosively emerging from inactivity:
http://www.gold-eagle.com/analysis.html

Mike, All
http://www.futuresource.com/cgi-bin/get32.exe
London Metal Exchange Copper up +400

Colleen: The URL yougave about COPPER does NOT work. Pls check it for us.

Don't seem to be holding 335 on the Dec very well. Perhaps we'll get a retest and see how that behaves. Probably last chance for this!

EB -- How'd you like my 72.90 number for the Nov OJ?

Vronsky and All- sorry about that. It's available on Kitco's main page under FWN-hourly reports. Try this url? then scroll down to see copper.

I'm checking this new url before I post this

http://www.futuresource.com/metal.html

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:
http://www.gold-eagle.com/gold_digest/goldbug903.html

George Cole 08:23 - Great post, best summary of my investment philosophy
I have ever heard. I agree completely!!

Machf15 11:04 - lease rates were discussed here in depth a couple of months
ago. I don't remember dates - you might try seaching back in the Kitco's
archives.

JTF 11:06 - Sorry, I shared everything I know about the LBMA/Oil. I never
heard of the LBMA until earlier this year. I remember the insurance part
only because it stuck me as strange. Someone in the world using gold
instead of derivatives as insurance.

Cherokee always says "the further you look back the farther you see" or
something close. Someone here had a theory that an oil embargo was
just around the corner. The theory had alot of supporting evidence, but
the one that is buggin me is the increase use of gas-guzzling vechicles.
Yesterday, while driving around the neighborhood, I couldn't believe
how many Land-Rovers are being driving by housewifes ( what happened to
mini-vans? ) . Over half of the vechicles on the road are off-road types.
The McDonald's parking lot looks like a Toyota truck lot. Anyway, the
theory posted here was that the sale of off-road vechiles exploded
a couple of years before the oil embargo of the 70's. For anyone that
really believes history repeats itself - Porche has announced that it
will offer a "sport-utility" vechicle!! Porsche! selling trucks to
housewifes to take the spoiled brats to McDonalds. I say its about time
history starts repeating!

I've been trying to figure out the best method of profiting from an
embargo. Can anyone think of something better then long term Crude
options.

Eldooooh: Everyone gets lucky and YOU need all the luck you can get ( har har har )

Organ ( @03:00 ) , Spudmaster, et.al. Oracle of Alberta's articles notes a Standard and Poor document as the source of names of top Class A directors or more accurately "shareholders" on the Federal Reserve Board. Having read to article by Flaherty from Florida State University refutting oligarchy ownership of the Fed by U.S. and European merchant banking interests, I found it remarkable that Flaherty concludes ( after what appeared to be a good analysis ) that "It does not appear that the New York Federal Reserve Bank is owned, either directly or indirectly, by foreigners." Thus Flaherty does not shed any light to conclusively refute not only Kath, Schauf, and Mullins who made these claims but also the public statements of Senator McFadden and others back in the 30s when they spoke of corporate concentration and private ownership of the Fed...Ironically, Flaherty does not provide the names of those banks who today are the major stockholders, althoug he notes a John K. Galbraith account of National City Bank ( now Citibank ) having been the largest shareholder of the New York Federal Reserve Bank.

The reality is that if you asked the Federal Reserve Board to provide a list of the current top shareholders, they won't respond...I've tried this without success. All I get is their rhetoric about the structure of the system, board, governance ( ask for their publication on the Fed system ) , but remain silent on the fact that the Fed in 1913 was established through a $1million loan from merchant banks, that loan has never been paid off, in a sense thus piling up debt on the power of compounding interest rates.

The Fed is undoubtedly a riddle rapped in a mystery rapped in an enigma. If you asked the question of ownership you will never get a clear answer...certainly others greater than I have asked those questions such as McFadden. Confusing the issue are articles such as Flaherty's which do not in the end answer the question of ownership. Thus the system is not transparent nor fully accountable to the American people, just as there is no public accounting for the offical gold reserves in Ft. Knox.

The question I leave you with is....if Kennedy signed Executive Order 11110, as per previous posts, which empowered the Treasury to issue currency ( Treasury Notes ( silver certificates ) as opposed to Federal Reserve Notes ) on June 4, 1963, why then has it never again been exercised since November 22, 1963? Kennedy's action and future presidential inaction on the Order are very telling as to what we don't know about the powers behind the Federal Reserve system!!!

Chew on those thoughts for awhile.

We must continuously probe the darkness in search of the truth...we might surprised to learn the true nature of the Wizards of Oz!

Looks like somebody sold a big block of ABX today. Stock flat on heavy volume after being up on light volume earlier.

This gold rally still doesn't feel right. Agree with Eldorado that another lurch down likely soon

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:
http://www.gold-eagle.com/gold_digest/fisher1001.html

Interesting that Greenspans comments which caused today's drop in the DOW ( barely erasing yesterday's gain I might add ) has NOT caused any drop in the broader market. I still fail to see any substantive signs of looming market crash. Much as I'd like to see a good 20% pullback, what will drive it? Short of an international financial crises of some type? We still have low inflation, strong economy, ever lower interest rates ( in the mortgage sector for example ) , strong profit picture ahead. I've been hearing "Topping pattern" for years now. What makes today any different?

On the Side of Golden Angels provides historical precedent the House Of Rothschild might just be buying gold hand over fist!
http://www.gold-eagle.com/gold_digest/alberta909.html

Looking at the dow for the past year I wonder if we're seeing a double head of a head and shoulders pattern. This would indicate another shoulder or double shoulder before we see a protracted decline. All this should transpire within the next 4 or 5 months. Whats everyone else think?

One week ago I was sitting on a mountain in Nevada watching a herd of wild horses and
prospecting for silver. I broke open a rock that was literally held together with wire
silver! I have located claims covering 450 acres around this discovery. Yesterday, I
merged my private company with its gold and silver assets, including the above property,
with a public company. All of this to tell you what I am doing in precious metals since I
posted the following:


Date: Tue Sep 16 1997 20:04
arden ( ardengold@msn.com ) :

To all - I have not posted for awhile because I have been busy taking advantage of the
current markets, but not in the way that most of you are doing. My background is as a
geologist. As such, I recognize certain events in the cycle of exploration for metals. You
all are aware of the drop in gold and silver prices and the drop in prices of your favorite
resource stocks ( ouch! ) , but you are not aware of where the real opportunity lies. You
can invest your funds in the physical metals themselves and hope for a thirty percent
return. You can invest your money in existing mining stocks, but they all have their own
sets of problems, mostly debt! Or, you can invest your money where the real bloodbath
has been, and that is in gold and silver properties or companies who are acquiring them.
That is where my money is. I expect returns of twenty to one or more.

It is nice to see people like Oldman make a quick 50K based on his market experience, but
I notice that he must have sold today, thus expecting no more upside?

Many of you are chasing this market with puts and getting your head handed to you. You
know you are right, so you keep putting your money up. ( ouch again! )
In 1987 I had 150 OEX puts. The brokers in the office used to call me "Papa Bear". My
puts expired worthless in August and September. ( another big ouch ) . I don't know if
Puetz is right on today being the start of the crash or not, but I do believe that he is right
in the direction, as do almost all who visit this site. The good times don't last forever, nor
do the bad ones!

I do know that Comex gold and silver stocks are falling dramatically For example, Comex
silver stocks are a bit over 152 million ounces as compared to 200 million ounces at the
start of the year. ( Now I am a silver bull. ) Comex gold stocks are a bit of a different
animal with only about 1.1 ounces of gold pledged to cover each 100 ounce contract.
World gold consumption is at or near record highs, exceeding mine production by about
100 tons per month. With the low gold price, many mines are shutting down, some never
to open again. But, for sure, a huge amount of good exploration and development projects
are being skuttled. This is where I see the real opportunity!

The stock markets of the world can not go up forever, nor can gold and silver stocks
dwindle forever. There real leverage is in owning the metal in the ground.
My e-mail address is real.

LGB - If intuitive feel is allowed as flag, I agree with you. There have been so many obvious pins poised to prick this balloon. Yet it remains intact. Its interesting to me that AG again *directly* attacks the economy and the market when there is another up turn. What are his motives? Is it possible that he's hoping for a 'healthly' pull back instead of a crash. What would his interest be except that the FED would possible not be able to bank-roll the commercial system the same way it did the S&L's ( late 80's ) and later the investment houses ( early 90's ) . I am in amazement that he and Volker have been pounding on this bubble with sledgehammers and its still intact. Is is possible that this market could shrug off his comments a third time? I'm starting to think so. BTW, are you in the market to any extent or have you cashed out?

Vronsky, re your 11:29. I don't know about Sheller's copper Rhino. Might be an endangered species....

Wednesday October 8 2:44 PM EDT

COMEX copper ends lower as downtrend resumes

NEW YORK, Oct 8 ( Reuter ) - COMEX copper futures ended lower Wednesday on light trade selling, as the tone continues to be
sluggish on this side of the Atlantic.

The active December contract closed at 94.25 cents a lb, down 0.60 cent, trading between 94.15 and 95.90 cents. The spot month
finished at 93.00 cents a lb, down 0.70 cent.

Locals covered their shorts early, but by midday, the trade took over and sold into the market for the rest of the session.

``We bucked up against resistance at 96.00 cents on local short-covering,'' said James Steel, an analyst with Refco Inc. ``But then
the downtrend resumed. And the folks in London don't seem to have anything nice to say about copper. So I would have to
expect lower prices.''

HSBC James Capel and Merrill Lynch both weighed in at LME week with bearish projections for copper this year and next.
Even Codelco, the world's largest copper producer foresees a ``manageable medium-term downtrend in the copper market that
should reverse in a few years as demand catches up with an increase in supply.''

``With each passing day, it appears the long awaited surplus has finally come upon us,'' consultant John Gross wrote in a recent
report, although he noted that the International Monetary Fund is calling for the global economy to have ``its best five year
stretch in the past 25 years,'' Gross wrote.

He also noted that growth in Russia and China could bolster copper in the long term.

kuston,
Thanks for the advice, but you can't search Kitco anymore.

Machf15

GS Cole: Good catch re: ABX. The curve ABX over XAU should look like HM over HUI, but it is just the inverse. You can check these in real time at http://www.quote.com/cgi-bin/jchart-form?genApplet=yes using ABX /XAU.X and then HM /HUI.X ( I recommend daily interval. )

Allen, To answer your question, I'm "out" the market at the moment except for a sizable chunk of my own employers stock ( which has moved up approx. 30% in the past few weeks, due to reasons unrelated to the broader market ) . I'm waiting for a good downturn to average back into to mutuals. but I'll play it cautiously. I think Greenie's motives are as you said. He wants a nice orderly pullback. He wants to be known forever as the guru who pulled off the longest, strongest, expansion in history.

Great Central -4, Vaal +4, Meridian +1.4, Getchell +1.7, Euro-Nevada and Franco-Nevada up 2.4 / 3.5, Newmont +1.4, Stillwater +1.8. FDPMX looking to be up a per cent or so, FSAGX the same. Rush "the truth detector" Limbaugh expects markets to come roaring back after fending off today's greenspanning with relative ease - however - investor /consumer psychology is a big unknown, is it not? Is a malaise, a despondency, in the wings? Is the emptiness behind the deceitfulness of apparent materialistic abundance soon to subdue this sterile expansion? Is a lingering longing for meaning set to rear its hungry head? Or will this pseudo-prosperity live until the year 2000? The era of the SUV is upon us, friends.

One final thought: ( begin 48 point Helvetcia ) GOLD! GOLD! GOLD!!! ( end 48 point Helvetica )

Best to all.

One final question: Should I come to work Friday or play golf? Informed guidance will be received thankfully.

I am the only man in America who doesn't understand the financial problem from A to Izzard. That is my misfortune rather than my fault, for I have wrestled with it. as did Jacob with the angel. I do not even know what effect the free and unlimited coinage of silver would have upon the commerce and industries of this country. Several thousand learned Thebans have taken pity upon my stupid nescience and explained it to me; but I could discover never a Daniel to explain the explanations.

And even if I could work the silver problem thro' my seldom hair and be able to predict with certitude whether, in the end, we would be better off by defrauding our creditors with cheap money, or permitting them to squeeze the immortal ichor out of us with dear money, I would stall irremediably at the gold reserve. Of course its manintenance is necessary to preserve the public credit, for Morgan and Belmont, Cleveland and Carlisle have said so, and "that do settle it." Faith is our only salvation.


1899: Faith is our only salvation.... How can I hope to convert these financial heathen while unable to give a valid reason for the faith that is filling my heart with the rhapsodies of heaven? I want to be able to explain how $100,000,000 of "real" money can "guarantee" more than $1,600,000,000 of "token" money; why the great capitalists of the country, who must lose by any depreciation in the purchasing power of our currency, are continually assailing the base upon which its credit rests; why, if they desire to commit financial hari-kari, the great debtor class should tax itself to prevent their destruction; what nation ever issued money that was "good the world over;" what our circulating media has to do with our foreign trade so long as nations do not swap money but exchange commodities; but the orator is silent.

The preachers assure us that there are some things which the Lord did not intend that we should understand; that he "moves in a mysterious way his wonders to perform"

To all: Each week Value Line's "Summary and Index" ( which is available in
most libraries ) shows on its cover the PE ratio, the ESTIMATED YIELD, and
the APPRECIATION POTENTIAL of the stocks that it covers.

It also shows what these numbers were on 9/4/87, presumably because that
was the time when they were most extreme.

In 1987 they were 16.9 ( PE ) , 2.3% ( yield ) , and 40% ( appreciation potential for the next 3-5 years ) .

Today these statistics are 18.1, 1.7%, and 35%. All are at new extremes.

My interpretation: This is not a good time to own U.S. stocks other than
gold, silver, etc.

To all: What happened? Did our Alan Greenspan decide to talk down the market rally? Perhaps he will continue to do this whenever the DOW reaches 8200 or so. Lets hope he doesn't try "too hard", given that we are in October!
Re: Our gold rally -- not a very lively response. I think we will know where we stand - at the next cyclical downturn - in about a month.

I would definitely recommend golfing on Friday! ( That is, unless the bridge game will be down a man anyway and need you desperately ) BTW, what is it you do 2? And are they hiring?

Wednesday October 8 3:44 PM EDT

NY precious metals end higher on moderate volumes

NEW YORK, Oct 8 ( Reuter ) - COMEX and NYMEX precious metals futures ended higher Wednesday, after comments about
the U.S. economy by Federal Reserve chairman Greenspan caused renewed weakness in stocks, bonds and the U.S. dollar.

``Gold and silver got a little boost from Greenspan's comments, but then producer hedging knocked the market right back down
again,'' Chicago Corp's COMEX floor trader Carlos Perez-Santalla said.

Speaking to Congress, Greenspan said the performance of the U.S. labor market suggested the economy was on an
``unsustainable'' track, and a continuation of recent stock market gains was ``clearly unrealistic'', with corporate price/earnings
ratios at ``unusually high levels''.

COMEX December gold ended up $2.00 an ounce at $335.30, but off the session high for the day at $336.00, on unexceptional
total COMEX gold volume of 39,000 100-troy ounce contracts.

COMEX gold open interest was little changed at 182,549 lots Tuesday, up 199 lots.

COMEX gold open interest has fallen steadily in the past two weeks, from a high of 214,472 lots on September 12, to a low of
180,644 lots on October 2, suggesting the gold price rally to three month high has been driven by fund shortcovering, analysts
said.

In the bullion market, spot gold ended quoted $333.00/00, compared to the London Wednesday afternoon fix at $332.60 and the
New York close Tuesday around $331.20/70.

Gold lease rates were little changed Wednesday around 2.64 pct for one month and 2.77 pct for 12 months.

Fourth quarter gold demand is seasonally usually strong, during the Indian harvest festivals, and Indian demand has been been
running at new record levels already this year.

Gold and silver mining stocks were also higher Wednesday, despite the weakness in the broader U.S. stockmarket, with the
widely-followed Philadelphia Stock Exchange's XAU index of mining stocks up 1.36 pct at 107.45 points near the close.

The XAU index saw a 20 percent rally in late September to six month highs at 111.33 points, after gold stocks earlier this year
fell to their cheapest level, relative to gold prices, since early 1995.

COMEX December silver ended up 2.8 cents at $5.230 an ounce, after seeing an intraday high at $5.320, just below the six
month high for the contract at $5.330 seen last week.

But estimated total COMEX silver volume was only 21,000 5,000-troy ounce contracts.

Silver prices have risen more than 10 pct in the past 10 days, with open interest up to its highest level since August 1996.

COMEX silver open interest rose a further 646 lots Tuesday to 104,480 contracts.

COMEX warehouse silver stocks were up for a change in Tuesday data, rising 96,868 ounces to 137,894,068 ounces, but silver
stocks have fallen by more than 20 million ounces in the past three months, and currently represent less than the open interest in
the December contract of 370,370,000 ounces or 74,074 contracts.

NYMEX January platinum gained $8.60 to close at $436.00 an ounce, while NYMEX December palladium ended up $6.00 at
$204.75.

Russian sales of platinum group metals ( PGMs ) were noted for the first time in about a week, but fund buying on NYMEX
pushed prices higher, traders said.

Concern about the possibility of further disruption to Russian supplies next year is beginning to provide support, analysts said.

Negotiations over the renewal of the Russia-Japan annual PGM supply contract are expected in December.

``Anything below $200 is seen by one extremely shrewd US investment fund as an excellent long term buying price for
palladium, while in the case of platinum we are seeing good dealer buying in and around the $400 level on a regular basis,''
Merrill Lynch analyst Ted Arnold said.

LGB: I agree this is not the end of the bull run; the failure of the broad market to follow the Dow down tells me that. But I do think the end is approaching. My time cycle analysis tells me the market will be under heavy pressure next month, but a final blowoff year-end rally cannot be ruled out.

What is different today verus a year ago?

The expansion is a year older and these don't last forever.

The S&P 500 P/E ratio stands at 24 times record earnings. This is extraordinary and implicity assumes 15% earnings growth for the next five years. Every conceivable piece of good news has been discounted ( well almost, anyway )

And last, but not least, gold is breaking out. Gold had been weak during all the previous corrections. Somebody knows something.

George your comments do make a lot of sense to me. The record PE's and the exhaustion of virtually all potential good news are 2 of the major reasons I'm "out" the market. The sudden movement in PM's is certainly fascinating also. Problem I have is, with all the continuing "good" news in the ecomomy, and the strong market showing in new highs to lows, etc., what's to prevent the market from drifting in a 500 point range for the next few months to year or more, and then resuling it's upward pressure? ( Assuming no major meltdown in the economy or financial markets.. )

RYO and ECO had good moves today on decent volume. These stocks especially RYO tend to lead up moves in gold. Somethings happening, what is aint exactly clear, theres a man.....

To all: de Guzman the ultimate fall guy -- 600 feet.

http://biz.yahoo.com/finance/97/10/08/z0009_61.html

Full text of Alan Greenspan's comments at DBC newsroom http://www.dbc.com/cgi-bin/htx.exe/newsroom/newsroom.html?SOURCE=DBCC

The key to the markets ( stock markets and precious metals ) is the long-bond yield. 30-year bond yields up 12.8 basis points. The key to the bond yields is the ongoing currency mess in Asia.

I note all U.S. market indexes ( except the NASDAQ ) were down. I also note that there was reported dumping of $US in Asia yesterday after a posting glitch on the currency screens in Singapore.

All US indexes except the Dow have been setting new highs all month. Now the Dow has stumbled within 100 points of its August 6 ( 8259 ) high. All is now in place for a Dow top. It now all depends on long bond yields, and that's an area where the Fed has limited control.

Too early to call a market top yet, but the secondary indexes classically outperform the blue chips at market tops, and that is certainly what has been happening. What is also happening, as always, is that no one inside the U.S. is looking at events going on OUTSIDE the U.S. as having an effect on the markets.

1899: --THE SIGNS OF THE TIMES--
"God help the rich! the poor can beg." appear to be the motto of those economic pollywogs and political peewees to whom an inscrutable providence has given control of this government. And perhaps the saying is not so foolish as one might at first imagine; for history has a bad habit of repeating itself, and the day may not be distant when the rich will have more occasion for pity than the poor. To the careful student of sociology, there are many and unmistakable signs that we are rapidly nearing the patience limit of the common people - that the hour draws on apace when they will decline to be longer hoodooed and humbugged by fake panaceas for poverty cooked up by place-hunting politicians. And then ?

Well, strange things have happened when the toiling millions became maddened by misery and frantic with hope deferred. Deprived of property and imprisoned, ( France last century ) guillotined and trampled beneath the iron-shod feet of the people they had learned to despise ( greedy and impudent aristocracy ) ....one would imagine after this terrible rebuke, written in fire and blood, the lily-handed few would never again tempt the murderous wrath of the "many headed monster;" but the curse of greed, the lust for gain, the thirst for power, blinds men to danger and drives them to their doom.

Dow/Gold Ratio = 24.30 I seem to be the odd man here but I am not convinced that the Dow will reach new highs. I feel that "something" is happening in Japan and that the action in bonds today is very bad news for the Dow. I do agree that a Dow Bear Market and/or a Gold Bull Market are not confirmed.

http://www.dbc.com/cgi-bin/htx.exe/newsroom/newsroom.html?SOURCE=DBCC

The link didn't seem to work on the last post.

XAU/Spot Ratio = .328 The condition is still "blue" in that with an Auger reading of 3.05 the blue line has not touched the red line and it not even close.

October 8, 1997
U.S. House panel approves fast track trade bill

WASHINGTON ( Reuter ) - The House Ways and Means Committee Wednesday voted in favor of a compromise bill giving President Clinton special powers to negotiate trade agreements. The committee voted 24-14 for the so-called fast track trade authority that allows the president to negotiate trade deals without fear they will later be changed by Congress. An overwhelming majority of the committee's 23 Republicans voted for the bill, but only a handful of the panel's 16 Democrats backed the president.

STOCKS-OFFICIAL CLOSE

NEW YORK ( Reuter ) - Prices on the New York Stock Exchange closed lower in active trading Wednesday.
The Dow Jones Industrial Average fell 83.25 to 8095.06.
The NYSE Composite fell 4.64 to 509.57.
The average price per share fell $0.42.
Decliners beat advancers 1928 to 1001.
Volume was 572,228,490 compared with 551,407,670 on Tuesday.

the-Savage-one - Chasing this whole OJ/JO thing has been confounding me all summer. I lost some money than I made a little back. I am overall in the red w/ JO ( except for my current calls and spreads ) but not by much. I am in the Eldo camp ( i can't believe I just said that ) on this one. The rise is looking better every day...and then it starts to suk again. ( there are many oranges and orange trees ) here is some funny-mental homework http://www.fred.ifas.ufl.edu:80/citrus/ The Volatility is Way high and this is the ONLY reason my calls aren't taking a beating. Calls and Puts are overpriced http://www.pmpublishing.com/volatility/oj.html You might consider what MADOG ( whoof-whoof! ) posted. Selling puts collect premium and you're on your way. I think the 'dog' is on to something. Limited downside ( historically ) risk I think ;-0
I just read Plaintalker's post and I think he is trying to collect some premium whilst we wallow at or near a bottom, eh? Plaintalker, give us some of your insight...do you think volatility will come down on such deferred contracts? Come back to me on this, please. I need to learn MORE...

Eldorado - Excuse the 'crusty' nature of myself. I'm just tryin' ( as usual ) to figure you out. I just can't get a handle on your support and resistance stuff sometimes. My wishy-washy refers to the times that your positions seem to go either way...sorry, my obfuscation is exacerbated by your convolution...but in a loving way ;- ) and as far as your lines of support and resistence with OJ/JO. I think that the downside has played itself out for THIS year and the clock is ticking for the Bull phase...let's be ready 'cause we could have EXPLOSION! or we could have more of the same????

away...to mix some frozen concentrate


savage - when I tell you this I will have to kill you ;- ) ...i went to office-depot and made copies of the appendixes from a BIG computer book regarding ascii keycodes. it was much easier than i first imagined...h M!

David - sorry if i came down on you again ( i try to be nice ) . i like your posts ( albeit repetitious ) and i continue to try and figure them out, but there is a time and place for drumming bizz. as Bart so kindly said, check the biz cards at the door...

October 8, 1997
FOCUS-Fed, SEC nominees approved by Senate panel

WASHINGTON ( Reuter ) - The Senate Banking Committee voted unanimously Wednesday to approve President Clinton's two nominees to the Federal Reserve Board -- Roger Ferguson and Edward Gramlich.

The 18-member panel also backed Clinton's two nominees for seats on the Securities and Exchange Commission, White House aide Paul Carey and Senate Banking Committee aide Laura Unger. The full Senate must still vote to confirm them.

Banking Committee Chairman Alfonse D'Amato, a New York Republican, told reporters after Wednesday's hearing that the Fed and SEC nominees could be voted on by the full Senate as early as Thursday, if certain Senate rules are waived. D'Amato urged his fellow senators not to stand in the way of confirmation this week. "The boards of the SEC and the Federal Reserve should come to their full complement as quickly as possible," D'Amato said. But he acknowledged: "We might not be able to get unanimous consent."

Aides said Sen. Tom Harkin, the Iowa Democrat who held up Fed Chairman Alan Greenspan's renomination last year, would seek a Senate floor debate on the confirmation of Ferguson and Gramlich. "The plan is to have a debate about Fed policy when these nominations are considered," said Harkin's press secretary, Patrick Dorton. "There has not been sufficient enough debate." Debate could delay voting on the Fed nominees, aides said. Ferguson, if confirmed, would become the third African American to serve on the Fed board. He is a partner at the New York-based consulting firm McKinsey & Co. Inc. Gramlich is a University of Michigan professor who headed an advisory panel on reforming Social Security. At a hearing last week, both Ferguson and Gramlich agreed that an environment of stable prices was essential to healthy and sustained economic expansion. Clinton's nominees also hailed low inflation in the U.S. economy and pledged they would fight to keep it under control.
D'Amato told reporters he would support Gramlich's confirmation despite some concerns about his nomination, saying Fed board members should not "look for social activism as part of their endeavor." The senator said nominees Carey and Unger were ideal candidates for the SEC. "The president could not have chosen two more qualified people to serve on the SEC," D'Amato said.

Carey, a Democrat, is currently special assistant to the president for legislative affairs and has been working actively on matters involving securities litigation reform. Unger, a Republican, is securities counsel for the Banking Committee and has also served as an aide to D'Amato.
The Senate Banking Committee also overwhelmingly approved the nominations of Dennis Dollar to the board of the National Credit Union Administration and Ellen Seidman as director of the Office of Thrift Supervision.

October 8, 1997
Warnings sound on future of Canadian economy

OTTAWA ( Reuter ) - As Canada's politicians boast about the growing strength of the country's economy, some prominent officials are sounding warnings that may cloud the bright forecast.

U.S. Federal Reserve Chairman Alan Greenspan warned Congress Wednesday that the economic expansion in the United States -- Canada's biggest trade partner -- may be unsustainable. "The performance of the labor markets this year suggests that the economy has been on an unsustainable track," Greenspan told the House Budget Committee.

Canada's economic fortunes are tied like an umbilical cord to the U.S. economy. If the United States bleeds, Canada hemorrhages. Major changes in the U.S. economy would have a direct impact on Canada's fortunes.

But the Conference Board of Canada, a private research organization, said in a study released Wednesday that a hike in rates would weaken job creation in 1998 and slow growth in consumer spending, which revived only recently.

Trade Minister Sergio Marchi contended, however, that Canadian exporters were competitive in their own right. "Yes, the ( weak Canadian ) dollar has helped us. Yes, the American market has helped us. But we can't tie it to just one variable," he told Reuters Wednesday.

Marchi said it would be difficult to insulate the Canadian economy if the U.S. economy weakened, but "we also have oureye on ( Asia ) and Europe and Latin America."
http://canoe2.canoe.ca/ReutersNews/CANADA-ECONOMY.html

I would like to thank Bart for reconsidering and allowing me
back on this site. Bart realized, I'm sure, that he had a business
to run in addition to a website. No doubt he also realized that
there are a great many public libraries in the U.S. Finally, he
may or may not realize that I have a large number of friends
in a number of countries and he will be putting out a lot of
fires in his mission to have a site where all people are equal
but some are more equal than others. That said,

Dow to 8300 before October 23
Gold to 310 before October 23

When will y'all ever learn?

Greenspans' attempt to cool the markets today had little effect for the same reasons that telling a smoker that smoking is bad for them typically has little effect. The people investing in stocks are addicted to profits like a smoker is addicted to nicotine. Like the smokers, who calm their fears of cancer by convincing themselves "it can't happen to me",
those in the market, calm their fears of financial ruin by convincing themselves, "it can't happen to me either".

JTF: Did you see the comments of Sig on the XAU? Do you have an opinion?

JTF: Did you see the comments of Sig on the XAU? Do you have an opinion?

I have devoted enough time as was necessary ( translation:
about 10 seconds ) to examine GSC's latest prevarication
entitled THE MISSING LEG, in which he explains that,
doggone it, he forgot about spring theory and the possibility
that what goes down temporarily might come back up.
Profuse apologies were offered to everyone who lost money
listening to him, I'm sure. Was it Eno's Paradox that talked
about how an arrow could never reach it's intended destination
because it would cover half the distance and then half of
the remaining distance and then half of that remaining distance
ad naseum? What we have is GSC's Leg Paradox, at which
point, by about the 20 leg that he discovers ( what, is GSC on
some archeological dig? ) he forgot to remember, the Dow will
be oscillating like a seismograph on acid.

http://washingtonpost.com:80/wp-srv/WPlate/1997-10/08/067l-100897-idx.html

October 8, 1997
Consumer spending to slow down, Conference Board says

TORONTO ( CP ) - Low personal savings and high personal debt loads will combine with higher interest rates to slow consumer spending next year, the Conference Board of Canada said today. The economic research group predicted the economy will grow by 3.4 per cent this year and 3.1 per cent in 1998, a slight improvement over earlier forecasts. "The consumer is leading the way in 1997," Jim Frank, the board's chief conomist, told an outlook conference.
"Housing starts are strong, retail sales are rising, and auto sales are on track for their strongest growth in over a decade. With continued stellar job creation, consumer confidence is at an eight-year high."

But consumers who went on a spending spree this year because of lower
interest rates could also feel the pain of rising borrowing costs triggered by the Bank of Canada's fight against inflation, Frank warned.
He said consumer spending could weaken as rates rise.
"With total consumer debt now exceeding 96 per cent of disposable income, rising interest rates will make personal debt-servicing costs more onerous," Frank said.

Amigos: Today's action is to be closely analized. The WHITE ( hot ) METALS ARE showing us the way to the new market trend. Platinum rose $8.60 or 3%! Palladium rose $6.00 or 2%! WE ARE IN A PRECIOUS METAL BULL MARKET. Gold & Silver will follow. You would be remiss NOT TO READ the incisive & insightful study of analyst Butler: TWO DOWN, TWO TO GO

Silver, Platinum & Palladium UP nicely today. Historically, the WHITES lead the gold market. RE-read TWO DOWN, TWO TO GO for future gold action:
http://www.gold-eagle.com/gold_digest/butler607.html

Like the old saying, "He who hesitates is lost!" .... or at least will miss the greatest bull market in precious metals in YOUR LIFETIME!

1 ) Irrational exuberance 2 ) overly optimistic 3 ) economy on unsustainable track. Greenspan is comic relief to the market by now.....

TO tribe called quest:
You sound like testing
is that you?

My recent post was from earlier this a.m. I couldn't post earlier...and I panicked...yuk, yuk. And my ISP went down for a short while just now. Ted...what the Hell are you doing?!? You are Jinxing the hell out of me!! Knock it off! And that Can$ is holding it's ground nicely. Got to watch it close 'cause it'll tend to run AWAY from ya'...and pigs will ly outta my... ;-^ )

Eldo - Our trading styles are different. You're 72.90 support was broken. Does this mean that it will go down? And to what? Who knows? My support is 68.00 area. I am not sure why you picked the #'s that you did ( the gaps? ) . All I know is that it's about time for a move and I am ready for it ( sound familiar anyone?? ) ...and I think OJ/JO is a relative bargain and volatility will only increase. Liquid Gld...mmmmm good.

JTF ( astrophysisisist ) - Are you into astronomy? Did you read the latest about 'Pistol'? The HUGE star? It is shaped like a pistol and is putting out 100 million ( that's m-i-l-l-i-o-n ) times the light of our sun and if it were our sun it would dwarf us and it's outer edge would be touching mars. It is short lived, relatively speaking of course. It will only burn for 3 million more years...give or take ;- ) WW!

Plat - thanks for dragging gold with you today. Can or will you do it tonight? Tomorrow? Ever?? Pleeeeeeeeaze!!... there are some hungry gold-bugs out there.

Gold - will you get up or will you just roll over and let me scratch your belly...you DOG!

AWAY...to scratch the DOG!


Voices of reason come back to kitcoville to counterbalence GSC endless BS
and bad calls that have made him the king of kitco. Welcome back TCQ and god-bless the local library system in the U.S.of A!

Be nice this time, eh?

away


Who the hell did you think it was??

No lo creo Vronsky, pero quiero creer. Hey Son of Puff--I had you for breakfast.

I have read Butler's article many moons ago and I liked it. But, I'm STILL waiting. Gold has not followed Platinum and Silver has barely shown life, and weak life at that. When you say we are getting ready for the Biggest Bull in our history do you mean gold will shoot to $800.00 any moment now? Can you give me a time frame? This year? Next year? Two, ten, twenty, in your lifetime, in My lifetime?? How long will we have to wait...I'm getting sleepy.

away...to wait...and wait...and make boatloadsofmoneyonplatinum...


Mr. Greenspan YOU will be ultimately accountable for the horrenduous loses to be suffered by the vast majority of elderly Americans who placed their trust in the Federal Reserve System to monitor the extravagances of the stock market place, AND TO TAKE APPRIOPRIate action TO AVOID EXCESSES! Is that not part of your job?! When the market crashes, you will continue to live well, because you have a government job! But how about us retirees? We hold YOU accountABLE! You were APPOINTed to protect us. That is your responsibility... your job! If you fail to do it, should WE take legal CLASS-action against you PERSONNALY?! Ultimately, YOU ARE RESPONSIBLE FOR ALLOWING THE MARKET TO GO TO THESE EXTREMES!!! IT IS YOUR FAULT! YOU MUST PAY FOR OUR FUTURE SUFFERING! If you think this is only one voice on the Internet, you are monumentally mistaken. America is speaking to YOU Mr. Greenspan.... to turn a deaf ear would be imprudent, decidedly disrespectful and POLITICALLY INCORRECT! YouR LACK OF ACTION IS going to permit the sweat and toil of TENS-OF-millions of workers to go up in smoke due to the IRRATIONAL EXHUBERACE OF THE MARKETS. IT IS YOUR FAULT. YOU ARE THE PRESIDENT OF THE FED. IT IS YOUR FAULT! YOU COULD HAVE PREVENTED IT!! BUT YOU DID NOT! IT IS YOUR FAULT MR. GREENSPAN! You sit in your comfortable Washington office - AND DO NOTHING TO AVERT OUR FINANCIAL MISERY! IT WILL BE YOUR FAULT...

And I too want to believe...

away...por qu estoy hambre!


Donald: Re Sig's comments. I'll have to plot this. I think what Sig has done is to use the relative difference between XAU and gold, rather than the ratio. Before one can do this one must "normalize" the data so that "zero" is when the XAU and gold are what they are now. Note that 0.33*XAU would be about 33, and 1/10*gold would be about 33 as well. I think this will also change the relative weight of the changes in XAU vs gold. I would guess that this indicator would work best if the effect of gold stocks and the effect of gold were given equal weights relative to how changes in either indicators relate to gold stock prices. For example, on average as I recall a 1% change in gold usually leads to a 3-4% change in gold stocks. When gold bullion prices are fixed, the indicator would only depend on the XAU. Any comments about my analysis?
I agree with Sig that the driving force behind gold stocks is the gold price, because that is what determines ultimate mining profit or loss.
Another thing we ( Kitcoites ) should do ( suggested by George Cole, I believe ) is to display various gold stocks in their relative strength relative to the XAU, just as one plots the relative strength of regular stocks against the DOW or NYSE. This is a simple division of the gold stock of interest by the indicator of interest ( XAU ) . Our real gold rally should come soon, despite its current poor showing.
Looks like 0.33*XAU-0.1* ( gold spot ) would be worthwhile plotting.

I'm trying again with the deGuzman post -- the ultimate "fall" guy/
Apparently some of the web site posts get truncated.

http://biz.yahoo.com/finance/97/10/08/z0009_61.html

I hope you are kidding.

If not...don't be such a moron. Greenspan can't protect you or anyone else...and don't ever speak for me.

now it truly IS time to go...

AWAY!


To all: I have located the penultimate market guru for your entertainment:

http://www1.ewin.com/ewin/articles/market.htm

And again -- the penultimate guru:

http://www1.ewin.com/ewin/articles/market.htm

One more time, tested again before sending:

http://www1.ewin.com/ewin/articles/market.htm

Those three posts were tested before sending, and I even purged my cache memory! The article was titled "Doping out the stock market" by Ethan Winning, ( http://www1.ewin.com/ewin/articles/market.htm ) . Absolutely hilarious! Hope it gets through this time.

( please note: I have no personal nor professional involvement with this fund. And, I am not endorsed by, nor afiiliated with, this fund, in any way. I 're-copy' the following, for & to you, fellow-kitcoites, simply to assist you in your own research, according to our mutual interests. I believe this is a well-managed gold-fund. ) : : )

Royal Precious Metals Fund
Contents
Fund Objectives
Market Commentary & Outlook
Fund Breakdown
Fund Manager
( Click here for main menu options )
Fund Objectives

The investment objective of this Fund is to provide an above average rate of return and long-term
capital appreciation. This Fund invests primarily in precious metals, in the form of bullion, coins or
receipts or certificates representing precious metals, and in common shares and other securities of
Canadian and foreign issuers engaged directly or indirectly in the exploration for, or mining and
production of, precious metals. "Precious metals", as used herein, means gold, silver and platinum.
The mix of the portfolio of this Fund between precious metals and securities will vary from time to
time, but not more than 10% of the portfolio will at any time consist of silver and platinum. Changes
in market conditions may require this Fund from time to time to have a substantial portion of its
portfolio in cash or cash equivalent instruments.

[Top of page]


Market Commentary - May, 1996

Gold and silver bullion both remained soft in May and came under renewed pressure in the first
week of June, reaching recent lows of $383 per oz. and $5.17 per oz. respectively. Despite strong
underlying fundamentals, investor demand is lacklustre and the prices are drifting. In May, weak
metals markets didnt bother the stocks as the TSE gold sub-index surged to an all-time high at the
end of the month at 13,200, up 7% in the month and 27% year-to-date. However, reality intruded in
the first week of June as the Index plummeted over 10% in a week as the sloppy metal prices, some
disappointment on the exploration front and a negative article concerning Nesbitt Burns activity in
the precious metals field combined to drop the aggressively priced gold share market violently. This
once again illustrates the inherent volatility of the gold share market; the companies enjoy both
significant upmoves and sharp corrections.

PERFORMANCE

The Royal Precious Metals Fund had a good month in May, rising by 10.4%, bringing the
year-to-date return to 73.2% and the twelve-month return to 135.5%. However, outside of cash,
there was nowhere to hide in the first week of June and the Fund fell 9.2%, marginally less than the
TSE gold sub-index. Our cash and bullion positions cushioned the decline but some of our more
speculative positions declined precipitously as the market initially didnt distinguish between the
quality exploration plays and the outright promotions.

Outlook

First and foremost, the outlook for bullion, both gold and silver, remains excellent despite the current
malaise. I would characterize the recent activity as the calm before the storm and, in this instance, I
believe that the storm is going to result in higher bullion prices as a yet undetermined catalyst triggers
investment demand in a market where inventory is low and short positions abound.

In that event, the stocks of good quality gold producers with strong reserve positions, companies
like River Gold, Viceroy Resources, Prime Resources, and Hemlo Gold to name four, will flourish.
Somewhat more problematic is the fate of the exploration sector where valuations took on a life of
their own recently and where disappointment is inevitable. We like and hold significant positions in a
number of exploration companies which have the qualities we look for; a large, diverse land spread
that is geologically promising, exceptional management with a strong track record and a good
financial position. Companies in the portfolio such as Nevsun, Orvana, Pacific Amber, and South
Pacific Resources would meet these criteria. In the recent correction, investors didnt pay much
attention to the attributes of individual exploration companies; they wanted out and sold
indiscriminately. Corrections like that are not fun for anyone but they are necessary to clear out the
froth. We believe the good companies will recover and the bad ones will fall by the wayside. We
also believe that our portfolio has a lot more of the former than the latter.

The correction may or may not be over but I dont believe it is a time to panic. To be frank, I didnt
realize how much hot money was in the Fund or I would have maintained a greater cash position.
My advice at this time is unequivocal: stick with positions and take advantage of any further
weakness to add to positions. We still have the upleg in the sector driven by higher bullion prices, to
come.

[Top of page]


Fund Breakdown

Portfolio Highlights as of May, 1996

Canadian Equities $263.0 MM 63.4%
U.S. Equities 44.0 MM 10.6%
Gold Bullion 28.9 MM 7.0%
Silver Bullion 53.7 MM 12.9%
Cash/Cash Equities 25.2 MM 6.1%
Total Portfolio 415.0 MM 100.0%


Top Ten Holdings

RBC Silver Certificates Nevsun Resources
Bre-X Minerals Ltd. Prime Resources
RBC Gold Certificates Euro-Nevada Mining Corp.
Orvana Minerals Corp. Rayrock Yellowknife
First Mississippi Gold Inc. ( US ) South Pacific Resources

[Top of page]


Fund Manager - John Embry

Vice-President, Canadian Equities

John Embry is the lead Portfolio Manager for the Balanced and Equity Funds and is Chairman of the
Canadian Equity and Stock Selection Committee. John began his investment industry career at
Great-West Life Insurance Co., where he started as a Stock Selection Analyst and eventually
became Vice-President, Pension Investments for the entire firm. After 23 years with Great-West
Life, John became a partner with United Bond and Share, an investment counseling firm. In 1988,
United Bond and Share was acquired by Royal Bank of Canada and John was assigned Portfolio
Management duties at RBIM. John covers the gold, merchandising and communications sectors of
the TSE.

John graduated with a Bachelor of Commerce degree from the University of Manitoba.

[Top of page]



[RMF Home Page] [RB Home Page] [Overview] [Daily Statistics] [Investment Basics] [Fund Profiles]
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We value your questions and comments. Please contact us here, or call 1-800-463-3863.


RoyFunds and Royal Trust Mutual Funds are available only to residents of Canada. They are sold by Royal
Mutual Funds Inc., an affiliate of Royal Bank of Canada. Important information about our mutual funds is
contained in the simplified prospectus, a copy of which can be downloaded from this site. Copies are also
available at any branch of Royal Trust or Royal Bank. Please read the prospectus carefully before investing.
Unit prices of our funds will fluctuate.

Funds@www.royalbank.com

GCZ7 last two minute move looks strong.
XAU last fifteen minute move looks strong.

to SON OF PUFF:
The librarian. I got confused. I got all excited. Sorry.

JTF: I was hoping to find an index that would use regular information from the newspaper and could be computed on a napkin at Mickey Dee's. Sig has introduced some complexity but if it works better what the heck. Recall the point you made a week ago or so about safety and .32? By adding the "red and blue" component to the index number through the Auger reading I feel more comfortable with the higher numbers. I plotted it out on paper today and .328 seems safe as "blue" has a way to travel yet.

EB: This friday 8:30 am USDA report will set the tone for the next few momnths in JO, the only thing that could change the fundamentals would be an Elnino related weather event ie a freeze in Fl. or drought-freeze in Brazil next yr.

EB: This friday 8:30 am USDA report will set the tone for the next few momnths in JO, the only thing that could change the fundamentals would be an Elnino related weather event ie a freeze in Fl. or drought-freeze in Brazil next yr.

http://biz.yahoo.com/finance/97/10/08/z0000_z00_32.html

Oct. 8th's "ditto" :
10/08/97 : Oct. 8
"CHART # 5"
Dear Investor/Trader/Money-manager,

Precious Metals Markets - are about to begin, a new, bull-market
'chapter', in their "script". This 'writ' was re-ignited in late '92,
and early '93.

My research, as demonstrated in chart #5, courtesy of Mr Ron Jett, can be
found
at "Jett's Charts" - his URL is
http://www.geocities.com/WallStreet/Floor/3046/

This chart # 5, reveals the work of more than 30 years of my personal,
fundamental and technical - timing research.

The bullish divergence unfolding, between weekly gold prices, and ...
the 7/9 wk. "roc" lines -- is a divergence, not to be ignored.

This is a clearly bullish pattern for gold. If it is adequately studied
& understood, it can be
of significant usefullness, for those concerned with investment-market
timing. Understanding
this bullish divergence -- between the 7/9 wk. roc lines & the weekly
gold prices -- will
help any student of the markets, to see - that this bullish divergence,
has been unfolding - for
more than 6 months.

This is, in fact, a historically verifiable indicator.

Money-managers, investors, and traders alike -- are urged to review the
historical evidence, of
this technical timing 'clue'. At this propitious time, when the U.S.
stock market, sends many
signals of it's unfolding eagerness to decline:
it is prudent, to review the gold & silver investment markets, and other
commodity futures,
as well. ( For those of you interested: see my several posts on
http://www.kitco.com, over the
last month or two. )

In light of the burgeoning worry, which is under-mining most U.S. stocks,
it is wise to consider:
'a new pair of socks'.....plus: an alternate/shifting portfolio - that
includes selected precious
metals mining stocks. and/or 'gold-funds'.

In closing, I emphasize again -- though for many students of the markets
- this may be long
over-due: prudent money-managers, and investors, and traders a-like:
review the evidence at hand -- it is 'time' to move into "cash", plus a
diversified portfolio,
including precious metals investments.

Sincerely yours,
David Blair Macrory, C.T.A.
Tierra$anta Trading
--------------------------------------------------------------------

' NOW '

Date: Wed Oct 08 1997 01:40
David ( goldfevr@pacbell.net>goldfevr@pacbell.net ) ID#269218:
10/07/97 & 10/08/97 - then, and NOW :
October 7, 1997; and, October 8, 1997 ( - then; and, - now )
INFLATION RE- AWAKENS, now.
Short-term ( option ) traders, are directed to my suggestions
for option-trading portfolios, here. My recommendations are also
repeated - at the end of this communication. Traders, and
long-term investors, as well;
will perhaps, find useful/helpful information, in the summary-list & review,
of my previous communications; some of which, follow .

Update - for Oct. 7th, and for Oct. 8th, 1997.
Portfolio suggestions for short-term traders:
For short-term traders, oriented/suited, and suitable, to/for
these high-risk/-reward, strategies --
( where there is no guarantee of success, or profit ) -- the
call options on Comex Silver
futures at
$5.50 & $6.00 strikes, written against the March & May futures
contracts, are
recommended, at this particular time.
In addition, the call options, written against Comex Gold Feb,
Apr, & Jun futures; at
$340, $350, and $360 strike-prices; are also recommended at
this time.

THE CRB index is in a bullish break-out. The bullish, reverse
head-&-shoulders
pattern -- for
primary precious metals mining stock-companies, ( - that I have
been calling-for, for
the last two months ) ....has been completed.

The energy sector -- including crude oil, etc.; is signalling
'trouble' in the Middle East.
I recommended the crude oil futures, in my 9/22/97
communication/kitco.com-post, entitled --
"WILD-CARD" . The 'grains' and the 'foreign currencies', are
also the
"Wild-Card"...for this time. ...as previously outlined.

------------------------------------------------------------------------------------------

This current communication ( 10/07-08/97 ) is, again, dedicated
to a nation of
"economic
illiterates" ..... a nation that means well,
but forgets its heritage. ....

What follows, are recent updated 'excerpts' of some of my
'postings' , & e-mails -- to
investment friends & associates, including my '2-cents' worth -
as added to various
investment discussion groups/boards.

These communications are contributed/directed -- to those of us
- 'citizens', savers,
investors,
and traders - interested in planning/preparing for the future.

( FOOTNOTE: 'citizens' -- is defined as those open-minded,
concerned, &
inquiring-enough:
to appreciate the monetary need for a world-wide, medium of
exchange, as well as - a
store
of value; that cannot be manipulated, changed, re-figured,
controlled -- whether by
nations, politicians, bankers, or any particular 'blocks of
self-interest' . )

I will attempt ... ( - based on my study of the 'masters', plus
my own
research-experience,
plus my 'intuition' ) ...
to include: what we might all consider doing next, and doing
NOW ....
if we wish to plan for this time of unusual, even rare -
opportunity.

Friday, 8/22/97 -- IS THE DAM ABOUT TO BREAK ? : : )
"...before the real BEAR, snares the 'Yuppie-Kingdom's'
sacred-cow... ( or is that - )
... the
sacred
Dow... ( -as in - Dow Jones Industrial Average ) . ... U.S.
Treasury Bonds have their
highest
'NET-SHORT' position among 'Commercials' ( -the 'big-boys' )
...... - Accelerating
interest
rates ...
( and the "whisper" of rising gold prices ) in the U.S., will
be the ACHILLE'S HEEL of
the
U.S.
Stock Market, and the U.S. Economy."

Sunday, 8/24/97 -- THE LEAD SOUTS . : : )
" Any considered study and contemplation of the gold & silver
mining stocks listed on
the
New York Stock Exchange ( -etc. ) , will lead any discerning
student of technical
timing,
to this conclusion: ....
the precious metals are 'gearing up' for an 'explosion' ... to
the upside.

Friday, 9/19/97 -- LIFT-OFF ! : : )
"... Here, at the end of summer, and the beginning of fall,
1997 - we are at the
beginning of
the first enduring, intermediate bull-market move, in precious
metals, since the first
quarter of '95, and again, since the 4th quarter of '95. ( And,
even since early '93, and
even since the 1st/2nd qtr. of '87 ) .
We are indeed, at ... ' Lift-Off '. "

Sunday, 9/21/97 -- LIFT-OFF ABORTED ( - ? ) ( - 'eating-crow' )
. : : )
" So, pride goeth before 'the fall' -- Jumping the gun, and
wishful thinking, do not a bull
market make, not even in gold & silver. "

Wednesday, 9/24/97 -- LIFT-OFF RE-INSTATED . : : )
"LIFT-OFF back on track/re-instated. ... the 'count-down' for a
precious metals
bull-market
-- 'lift-off' -- , has begun. "

Thursday, 9/25/97 -- KITCO.COM ... A CALDRON... + SHAKESPEARE .
: : )
"...what a caldron of....creative dialogue... 'The Lead Scouts'
are offering us a golden
platter.... of opportunity in the precious metals investment
markets, at this particular
time.
My 'Shakespeare' may be a little rusty, but ... here goes:

" We at the 'height' ...are ready to decline...
There is a 'tide' in the affairs of men...
Which, taken at the 'flood'...
Leads on to fortune;
Omitted, all the balance of their lives,
Are bound in shallows & in miseries.

"On such a full sea are we now a-float.
We must take the 'current' when it serves,
Or lose our ventures. "

Saturday, 9/27/97 -- THIS..BEST - NOT BE IGNORED . : : )
"We... best be about buying/securing/completing - our
positions, and commitments --
in
selected
precious metals investments ( - including mining stocks, gold
funds, coins ) ; and
including,
for traders ....call options .... at this particular time.

Saturday, 9/27/97 -- WHEN THE TENT ( -the U.S. dollar- )
COLLAPSES . : : )
"... And gold & silver ... will move up; at least for a year. "

Sunday, 10/05/97 -- 'FROM PERSONAL E-MAILS' . : : )
"... To sum it up, briefly - a very poweful, even explosive
up-move, in the precious
metals, is
upon us. Three to six months from now, most of us, will be in
total disbelief - at how
high, the
gold & silver prices, and selected mining shares, and their
related investment markets
...
( - including gold funds ) , will have risen.

Monday, 10/06/97 -- ALL SYSTEMS 'GO' ( - "Lift-Off" confirmed )
"... By Wednesday, this week, Oct. 8th: the beginning of the
first sustained advance in
gold
silver, will begin ..... This Christmas, 1997:... Santa Claus
is most likely arriving, with a
big bag of gold & silver 'gifts' ....... --- THE PRESENT IS THE
POINT OF
POWER..................... ( and 'it' suggests that ) :

#1. individual long-term investors, fund-managers, & financial
planners; are advised to
diversify into selected gold & silver mining companies' stocks,
if not done so,
already.
#2. Inter-mediate term investors/traders are advised to focus
on highly leveraged, &/or

low-priced issues, such as AU, BMG, SSC, AAGIY, & DRFNY.
#3. Short-term traders are advised to consider strategies
including 3 to 6 month call
options, --- on selected mining stocks, & on gold & silver
futures, at specific
strike prices. ( See - 'below'. )


----------------------------------------------------------------------------
Update for Oct. 7th, and for Oct. 8th, 1997:

Portfolio suggestions for short-term traders:

For short-term traders, oriented/suited, and suitable, to/for
these high risk strategies,
where there
is no guarantee of success, or profit:...... the call options
on Comex Silver futures at
$5.50 &
$6.00 strikes, written against the March & May futures
contracts, are recommended,
at this time.

In addition, the call options written against Comex Gold Feb,
Apr, & Jun futures; at
$340, $350,
and $360 strike-prices; are here-by recommended, at this time.


For additional information, you are welcome to e-mail me, with
your specific objectives.
Sincerely,
David Blair Macrory
goldfevr@pacbell.net
Tierra$anta Trading

Be sure to watch me score the first run tonight. Go Tribe!

Donald: Can you tell me how the Auger red and blue lines enhance the XAU/gold indicator? I don't recall the graph -- are they moving averages? Gold/gold stocks sure did not respond very much to the Greenspan stimulus today. Will he raise interest rates, and tank the market, as well as gold stocks?

Any interest in a "paper" implosion indicator, such as:

( total derivative volume on the dollar, in dollars ) / ( total dollars in circulation )

I think you posted those numbers once -- monthly, or daily? Given the "irrational exhuberance" of the market there may still be some time left, barring an unforseen catastrophe.

Indonesia: At 12:21 there was a press release saying they did NOT need IMF help. By 5:33 pm the IMF has them on Fast Track! This thing must be serious.

Donald: Thailand first, then Indonesia. Is Mathathir ( sp? ) of Malaysia going to throw in the towel too? I guess noone is willing to wait for the Japanese sponsored Asian relief fund -- or has it been squelched?

http://www.smh.com.au:80/daily/content/971009/pageone/pageone4.html

I have info on Fundies. The story will most likely be lots-o-oranges. El nio freeze and more medfly will boost the price... we know this.

I want to know why you are trying to sell out-o-money calls of deferred months. Are you betting on price drops? Price sideways? You seem bearish? So late in the season?C'mon, bro!! Give it up! ;- ) If you were bullish wouldn't you like to sell some puts like MADOG ( whoof! whoof! ) ? Hmmmmmmmm...what will happen...stay tuned...

away...to watch the Bipster!


Hey Bippy.....nice try dude but I beat ya to it! No Padre reject will ever score the first run in such an important game..Go Tribe+ Gold!

JTF: Currency in circulation $483B, of this amount $233B was determined to be circulating beyond US borders on Dec 31, 1994 ( per Fed )

When the Auger Lines are trending up, and have not yet touched each other, numbers in the .30+ range should be risk free. After touching and reversing down, as they always seem to do, risk increases significantly. Study the Auger chart with your new chart in hand, match up 1993 and you can eyeball it to get my point.

Arden was right on the money in his 15:10 post. The real investment for people who want maximum leverage and staying power in gold and silver is in the Properties! The bargains are phenomenal. The metal in the ground is the real bottom line in this phase of the PM bear. Investment in a fresh operation to acquire and develop undervalued but very rich properties is the inside way to go. Nearly every junior goldstock out there is hopelessly diluted and over-issued compared to the kind of operation Arden is speaking about. Contact him for details - the information and possibilities are very compelling.

I will attempt to post a site for the full text of Greenspan's speech today.
http://www.dbc.com/cgi-bin/htx.exe/newsroom/special/testimony.html?source=DBCC
Please note this text after the web site ( may help posting )

LGB: Gabby's famouse equation: PE + bond yield + interest rate = x. If x greater than 32 market over valued. If x less than 29 market under valued. The trouble is the definition of WHICH set of yields, inflation, PE's to use for the equation. To my knowledge she didn't specify.

The American Public cannot blame Greenspan if markets melt down. He will say, "I tried to warn you. I warned you three times. You wouldn't listen." Greenspan's statements might be political more than anything else. The government would not want the blame for a bear market. If the government warned the public then the government would be in some degree protected from blame. The BIS has been warning about inflated markets for months. When this asset bubble grows large enough it will bust on its own. What will happen? Look at Japan. AS the old saying goes, "Bears make money, bulls make money and the pigs get slaughtered." All those little piggies are looking for another 30% gain in assets. Good luck. Go gold.

http://www.smh.com.au:80/daily/content/971009/world/world4.html

Bill Buckler has stated a very important fact that most market analysts, especially those on CNBC, don't give much credit to what is happening outside the US as a factor on the internal markets. The long bond rate jumped today to 6.35%, surpassing its high on friday, and cannot be controlled very easily by the Fed/ AG unless foreign banks cooperate. When these allied banks start to consider their own interests more, the dollar debt/bond value will fall, rates will go up, and the Dow will certainly come down. If the bonds don't recover in the next two days, watch out very soon.

How did ya' like my hit/steal! I can't help it if my teamates can't bat me in. Maybe if they played at the mighty Jack Murphy Stadium. And you suked as a padre yourself. Remember Eric Show?? DOH! Had to kill hiself...go Tribe! Go Plat!

JTF.. Without getting into an argument, I have to disagree with one comment you said. Gold stocks are influenced by many other factors other than the gold price, and may gyrate all over the chart when gold keeps a steady price. Perhaps the most important factor is the public acceptance of gold as a valid investment ( perception ) . The difference is very clear when comparing US/Canadian stocks with S.African, for instance. Of course, most stocks don't fight the gold trend, unless you're Bre-X.

After discussing market trends last night, today's closing action by XAU completely reversed my short term indicators from down to up. I feel like I'm entering a whipsaw, so tomorrow must confirm. Good luck.

Mike - can ya' give me a readin' of tham there Lean Hogs? December 20, 1996. We seem to be approaching some super...er, i mean support.

Ya' all want to come over for some cornbread and collored greens?

thanks

Anybody catch FRONTLINE last night on PBS? The whole show was dedicated to Bill and Hillary's connection to WHITEWATER. Talk about a cover-up! Talk about obstruction of justice! The facts are clear! Hillary is up to her eyeballs in conspiracy, lies and fraud! Her fingerprints are all over the smoking telephone records together with Vince Foster's and Jim McDougall's! No wonder Vince took his life! He knew the whole affair was about to become public and he would either have to lie under oath before a grand jury or be held responsible for the demise of the first Democratic president since the disaster days of Jimmy Carter! When will the hoi polloi finally wake up to this fact and demand these people be brought to justice? What an outrage!

Indonesia: Rapid fall from favour

THURSDAY OCTOBER 9 1997

By Sander Thoenes in Jakarta

Indonesia yesterday became the second south-east Asian country after
Thailand to bow down to an assault on its currency - which has brought its
value down by about 26 per cent since August - and ask for assistance from
the International Monetary Fund and the World Bank.

Only a few months ago, Indonesia seemed the least likely among the regional
economies to need the embarrassing assistance of the IMF. A conservative
monetary policy, well-timed deregulation packages and high investment flows
which financed the current account deficit made it the darling of western
lenders.

"Many observers are puzzled about the extent of withdrawal of confidence in
the Indonesian economy," said Dennis de Tray, country director for the World
Bank in Jakarta.

The IMF and World Bank are likely to demand more specifics on budget cuts
and banking reforms announced last month after the rupiah took a severe
battering, and for less government support for wasteful projects and trading
monopolies, many owned by relatives and associates of President Suharto.

"They need to give a signal to the world that this is a genuine effort and no one
will be spared," the banker said.

Yet no government concession can address the prime cause of Indonesia's
current crisis, poor management of private debt. "Indonesian companies are
not used to a free-floating currency," David Chang, head of research at
Trimegah Securities, said. "They do not know how to manage their foreign
exchange exposure and they got beaten up. They'll just have to suffer, but they
are learning."

Private foreign debt appears to be far greater than the reported $56bn, and
less hedged or collateralised.

Indofood, a subsidiary of Salim Group, Indonesia's largest group, yesterday
revised its net profit forecast from Rp500bn ( $137m ) down to zero or
negative. It acknowledged that less than 15 per cent of its $1bn in debt had
been hedged.

Most observers agree that Indonesia is still far from a crisis of Thai
proportions. "Indonesia has to pay its debt in dollars," one diplomat said,
referring to the state debts of just over $50bn. "The further the rupiah falls, the
harder it gets [to service the debt]. This is not Thailand or Mexico but I think
they want to be cautious and refinance some of their debt."

The slump on the Jakarta Stock Exchange, which has fallen by more than 30
per cent since June, has also raised questions about economic management.
At the same time Indonesian enterprises have accused the Bank of Indonesia
of overreacting by floating the currency in August when it first widened the
rupiah's trading bands and later abandoned them altogether, and ordering state
companies and pension funds to deposit all their funds with the government in
August.

"The depreciation destabilised the whole country," said Mr Chang.

One western banker in Jakarta predicted the Fund and World Bank would
now be better placed to demand tougher budget cuts. For instance, the
government could, Mr Chang said, curtail the trade monopoly of Bulog, a
state agency which imports and sells staple foods. The World Bank has
recommended Indonesia lift subsidies on imported fuels such as diesel and
kerosene, which shot up in rupiah price as the currency fell.

But many fear that Mr Suharto approached the multilaterals knowing they
were so eager to help they would not ask for much in return. "Indonesia has
always been the teacher's favourite in the IMF class," one western diplomat
said.

GOLDEN CHEESEHEAD -- That program was a re-run from last season.

Yo. If this channel allows for
nonsensical baseball chatter,
is there also room for lyrics
to current popular songs?

[Why ya wanna go an
do that, uh do that?]

Thanks to everyone who offered
their support during my recent
short absence ( seizure ) . I know the
rest of you were somewhat lost
without my market insight. As Bart
well knows, there is a group which
E-mails me regularly to offer appreciation
for posting a counterbalance
to Poots and GSC's misguided
thinking.

[Don't it always seem to go,
that you don't know what you
got 'til it's gone?]

Every day, we hear about
the imminent rise in gold and
the imminent crash in the stock
market.

[So don't delay, act now
The time is running out
Allow if you're still alive
Six to eight years to arrive]

Well, until the next breathtaking
installment, probably from somewhere
in Colorado or New Mexico, this
is the hip-hop hepcat, saying if
you think other than 8300/310
by October 23 of this year,
you might as well be walking
on the sun, might as well
be walking on the sun.

P.S. Atlanta

OOPS! Must have missed it first time round. Thanks Panda! All the more the outrage that a whole year has passed and still no indictments!

Plaintalker: re your 10:38....May 85 & 100 strikes....why are you selling puts??

MADOG: re your 02:47...thanks for the tip. I've never written options, only bought 'em ( & subsequently sold )

Forgot who brought up the subject of gaps last night but the name for the final gap in an up or down trend is an EXHAUSTION GAP! I stand to be corrected but I don't believe I've seen one yet on the December gold chart! Anybody care to comment! As far as I'm concerned the only thing that could drive gold down now, after AG's bravura performance today up on Capitol Hill, is the discovery that AG and the CB's have learned how to turn lead into the precious yellow! It appears that they've already mastered the art of turning worthless paper into the Midas metal!

EB: I think that I may agree...sort of. Have an OJ shake on me. ( Thanks for the URLs )

A new poll of Fortune 500 information technology ( IT ) officers indicates that only one in six of the corporations surveyed -- 16 percent -- have begun implementing a full-fledged strategy to achieve Year 2000 compliance, and that only a quarter -- 24 percent -- have a detailed plan in place. The tracking poll of 128 IT directors and managers in 14 industries -- which periodically measures Year 2000 preparedness -- was
conducted in August by Rubin Systems Inc. for Cap Gemini America, a market leader in Year 2000 services.
Link: http://www.infobeat.com/stories/cgi/story.cgi?id=5310691-9c4

OZ down 1.75%, Japan down 1.25%

Donald. I've enjoyed many of your posts and I'm
curious about you thoughts on relationship of the
of gold/IMF/Indonesia.Cheers

George Cole-When all fall away!God bless you the NET FATHER OF GOLD.Happy Trails

Hey, Ted, got your communique and will respond in like kind soon. I was amazed, mystified and excited to see the metals movement today and coupled yet with saggy, baggy paper. Paper just is not able to get into record territory without stumbling on its own pulp. Having not submitted a joke for awhile I resort back to my southern upbringing for the thoughts of the day.

We don't keep firearms in this house.
Has anybody seen the sideburn trimmer?
You can't feed that to the dog.
I thought Graceland was tacky.
No kids in the back of the pick-up, it's not safe.
Wreslin's fake.
Honey, did you mail that donation to Greenpeace?
We're vegetarians.
Do you think my hair is too big?
I'll have grapefruit instead of biscuits and gravy.
Honey, these bonsai trees need watering?
Who's Richard Petty?
Give me the small bag of pork rinds.
Deer heads detract from the decor.
Spitting is such a nasty habit.
I just couldn't find a thing at Wal-Mart today.
Trim the fat off that steak.
Cappuccino tastes better than espresso.
The tires on that truck are too big.
I'll have the arugula and radicchio salad.
I've got it all on a floppy disk.
Unsweetened tea tastes better.
Would you like your fish poached or broiled?
My fiance, Paula Jo, is registered at Tiffany's.
I've got two cases of Zima for the Super Bowl.
Little Debbie snack cakes have too many fat grams.
Checkmate.
She's too old to be wearing that bikini.
Does the salad bar have bean sprouts?
Hey, here's an episode of "Hee Haw" that we haven't seen.
I don't have a favorite college team.
I believe you cooked those green beans too long.
Those shorts ought to be a little longer, Darla.
Elvis who?
Be sure to bring my salad dressing on the side.

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

Weak Hands buying today, what they just Sold?

Vronsky-You always tantalize me with your posts.Eating Gold Pie.Happy Trails

LARRYN: XAU and bullion did look much better on the close. And modest volume does raise the possibility of whipsaws. Nonetheless, the major trend now is UP. Time to buy the dips.

The joke I previously posted are things that you would never hear a southern man say. Sorry to have left this important part out of the joke.

FWIW column -- Thailand is apparently going to a two tier currency system ( temporarily ) . They will be raising taxes, cutting government spending on banking rescues, and interest rates are to remain high. Sounds like the standard IMF recipe for 'recovery', not.

Mike Sheller-Love that Venus:Sorry I missed many of your predications but as Astrogers we always catch those bugs.P.S.Voli @ Torbi wishes you luck.

It would be interesting to know the volume in the
Interest Rate Sensitives for today.Perhaps a
major reversal has ocurred and a beginning of
altenate forms of investment has begun...Or
maybe this gold bull was born July 7.The stock market
will ( is ) rolling over and the gold bull is beginning
just as George Cole said it would.

Savage Man - Plaintalker was selling calls ( hoping the price to go south or sideways ) to try to collect premium.

MADOG ( whoof-whoof ) was selling puts ( hoping the move to be north ) to try to collect premium.

They are both 'writing' options. It is just for different directions.

If you get confused just turn the chart over ;- )

away...to exercise my option to sit on the couch...


Donald: Your comments that the crisis was not over in SE Asia was accurate! Where is Indonesia going to get $80billionUS? Quite a bit more than Mexico in 1995.
I was calculating for the last hour. The 0.33XAU-0.1Gold indicator appears to be a short-term indicator -- useful for guessing when to buy or sell ( if you already have a buy on the long-term indicator ) . I have not been able, however, to figure out how to automatically normalize it if gold or XAU move significantly.
However, in the meanwhile, I have another ( double ) short-term indicator, normalized by the 30day moving average,eg:
XAU/ ( 30day_exp_mov_ave ( XAU ) ) -1

and

gold/ ( 30day_exp_mov_ave ( gold ) ) -1

These are in essence the short-term trends only with the long terms averaged out. Any short term trader would see these trends, but these indicators quantify how strong the trend is. Since there are many "buy" or "sell" signals, it would have to be used with the long term indicator such as XAU/gold. I can fax this to you - I did the 1993 gold rally -- for your review, if you like!

Donald: Your 19:56 post regarding "complexity"

The xau/au formula is not complex at all. I hope I did not confuse you with my original post from this morning. I'm afraid I didn't devote enough time to explaining it clearly as I was in a hurry to drive 2 hours from Cincinnati to Columbus to play golf! Sometimes life's pressures are simply overwelming : )

So here's the simple "napkin" method. With practice you can do it in your head. 1/3rd xau minus 1/10th spot gold. A positive answer indicates au stocks are above fair value; a negative answer indicates au stocks are below fair value. The 1/3rd and 1/10th components of the formula are completely arbitrary.

There may be more valid components than the 1/3rd and 1/10th, but for a starting point any number is better than no number at all. In the case of charting, I think what is needed is a neutral or zero historical starting point where the xau and au are equal. That is, at some point in history the xau reflected the exact true value of spot gold. It is at this unknown [at least to me] point where the chart should begin. From this point forward the spread between the two will give a visual representation of the subtraction formula mentioned above. Thanks for your interest.

It is said that a picture is worth a thousand words. In that vein, I present this picture. The dashed verticle lines represent a trading day. The bond chart is in tick trades and the Dow is in 5 minute candles. I can't line the days up, so you will have to use your eyes and minds to do the 'adjusting'. Now, can anyone tell me what's wrong with this picture? There really is something suspect here...

Sig: Glad you're online. I just spent the last hour with 0.33XAU-0.1Gold.
It looks like a great short term indicator! How do you correct for longer term price trends, say xau goes to 150, or 200? Even if you start at zero you won't be for very long! I am trying to make indicators that can be examined, say from 1975 to present ( or earlier if I can get my hands on the historical TSE gold and silver index ) !

GOLDEN CHEESEHEAD: Exhaustion gap! Thank you! That was me tryin' to remember it. If the gap of a few days ago in gold is a true breakaway gap, you may not see an exhaustion gap for years! ( tho it really has to show big on the weekly chart - this one might be a bit too small ) .By the way, LOVE your Kitco handle.

Panda: I'm having a little trouble scrolling up and down -- can't print without losing all my black ink. It looks like to me that TYX ( 30 year bonds, I believe ) and the DOW are going in opposite directions. Not what you would expect during a rally when interest rates should be dropping. Could there be an expectation of rising rates among some investors? I am no expert on this -- and I think you have more to tell. Thanks, JTF.

Incidentally, how did you post the graph? I have Windows on Wall Street -- great graphics -- but lousy output -- to screen or printer only. I would like to post graphs for Donald and others, but don't know how.

PANDA: Are you referring to the mirror inversion of the stocks vs bonds?

JTF -- Congratulations! You get the prize. I don't know what it is though. :- ) The answer could be DIVERGENCE OF THE STOCK AND BOND MARKETS. Way too early to say, but my, my... History buffs, are you listening?

To post charts, pictures, etc., you must fist create a .gif or .tif or whatever file type. Once you do that, you then upload the file to the server. On the posting page, look down at the bottom of the page. You will see a box in which you can insert the name of the file that you uploaded. The instructions are all there.

Hey little dude it looks like ya came up a little SHORT again but then again,guess your used to that,coming from where ya used ta rest yer sorry ass but as they say there's always tomorrow. P.S. Alan Greenspan is a veery baaad man for what he did to the stock market and all the widows+orphans who's survival ultimately depends on stocks that only soar like the great bald eagle with a heat-seeking missile baring down on its hindquarters$$$$

Mike Sheller -- YES. Look at a few days before today. When the long bond rates went down, the market went up. When the rates went up, the stock market went down. So, today the stock market went down at the outset some 120 points, and then reversed after the bond pit closed. Hmmmm, Joe Batapatapatataligia says .... What else? Buy! The question becomes this, if bonds continue this pattern of rising rates and the stock market continues to rally... Does this sound familiar?

Larryn: Didn't see your post till now. You are absolutely right that the publics perception of the value of gold can be overwhelming on the price of a gold stock. What I was getting at, is that all things being equal, ( ie at any one time ) the price of one gold stock versus another is determined by the earnings of the company. That is why Pierre Lassonde's EuroNevada, and Franco Nevada have done so well! I think in terms of relative strength, they are two of the best ( majors, I believe ) . Newmont mining and gold would be two other excellent examples. But of course if the public is not interested, none of the gold stocks will be of much value.
I also got wipsawed this morning as well, and sold 1/2 of my precious metals holdings to lock in profits. I'm now wondering if Greenspan might dare raise rates slightly to reign in the market. That would do a number on gold stocks in their currently weak condition.

JTF -- Don't be so sure that a rate increase would tank the gold stocks. Remember, if the Fed raises rates ( what a joke, but that's another story ) what would this be telling the markets? That Greenspan is raising rates for fun? No, the bond boys would ( are ) worried that Greenspan sees something that they don't. They will dump bonds, thus causing long rates to rise. That is where the real control is, in the long rates. The Fed has only short term rates at its' disposal. What do you 'invest' in when bonds are going south and stocks are getting shakier by the minute? Here's a hint, it's another four letter word...

Hi Panda and yeah there is something familiar about the current scenario ( sold some more of my paper today ) ...PPI out Friday! Hong Kong down 2.12%...but on the other hand: Taiwan up 2.20%....Good night all!

Panda: I know that's happened before in the markets. Do you have Victor Neiderhoffer's book, "The education of a Speculator", Wiley, 1997? Page 287 has a 2-d plot of the SP_500 against bonds- bonds on the x axis, and sp500 on the y axis. Bonds and Stocks correlated in the normal direction, except around Aug 1996. During that time, bonds tanked and the market rallied slightly. Since this is a 2-d time series represented by a wavy line without time specified, I can't tell you the time this began. There is another reversal time when bonds went up and the market went down -- the time is unspecified.
Neiderhoffer relates another time when stocks were up and bonds were down -- that was just before that famous month in Oct , 1987.
I am only reporting what I read -- there is little explanation, and I am no expert on this. Hope it helps -- inflation fears coming back?

JTF: Your 19:02 post to Donald.

Your third sentence is exactly right. I'm not clear on what you mean in the forth sentence. The .33 xau/.33 au is a zero point, and is only a crude way of forcing a starting point for charting. The real question should be -- does it reflect a true 1 for 1 value? I don't know. Maybe no one knows. This "Truth" would increase the accuracy of the chart, but the concept is so simple its exactness may not be that important as it should be used as only one of many analytical tools in stock evaluation, timing and purchase.

One other point. I agree xau stocks do seem to be about 3x more volatile than au. That's what this chart visually proves! Junior and exploration stocks are about 5x more volatile than au. Also G. Cole's idea fits nicely into this charting system. So does silver, platinum, paladium, oil, interest rates, and crb. Cram them all together. Or better yet, reduce or increase their individual price or index size to fit neatly within a single, narrow, easy to comprehend chart. Thanks for your interest.

Debt is money and money is debt. Eliminate the debt and... Will the real money please stand up.

But wait, what if we markdown the debt? Rates rise and CDs do well? But the cost of those foreign goods goes up! And rising prices are... INFLATIONARY.

Ah well, it's getting late and my posts are becoming...
Good night all......................

Mike sheller

gstd is picking up volume and price

Hi TED!

JTF -- One final thought. You can call it inflation if you want, but my take is slightly different. I think that the issue here is one of currency instability. All currencies are tied to one another, but none of them are really tied to anything tangible. You need true gold convertability to put the fractional reserve banking scheme were it belongs, six feet under. Getting late, good night!

sig: Appreciate your post on my original post to Donald. What I follow for gold/gold stocks is gold bullion, silver bullion, WG580 - a TC2000 gold stock index with volume included, oil stocks, the Swiss frank, CRY0, usdollar,interest rates -- not necessarily in order of their importance. Perhaps I should add platinum and ? What I have not been able to do is cram all of these on one chart, and still be able to read it.
Someday when I understand time series better, I would like to rank all of these indicators.