--Good idea, IMO, to hold on to DRIPs. I plan to keep a core of Zero's.

Goldfinger! Let me guess... when you got inside Ft. Knox, it was empty! Good to have you back.

Goldfinger! Let me guess... when you got inside Ft.
Knox, it was empty! Good to have you back.

Panda, from what I saw on the other ( paper ) investment sites ( SI... ) the PPI figures were seen as a nuisance or an irritant, nothing else. The paper crowd isn't very worried as yet, at least not the little folk. As for me, the one stock ( yes, I have been a bad boy playing on vacation when I said I wouldn't! ) I sold to balance the portfolio just in case, after acting the dog for a month, went up within an hour of my selling!: ) So much for my TA! In any case, they haven't gotten the message yet. Perhaps I haven't either, balancing gold and silver against paper like a mini-Soros, but it gives me somewhat of an edge, if I am fast enough, and it sure beats selling the gold or silver! Made a bit on the oils this week, thanks to the Nimitz. Time will tell if I should have held longer but I caught the exact high on one and near on the other and so that TA wasn't bad so far.
SESI was a good stock to me, although I tried to triple my holding on the close the day before it jumped and I got too near to the close, didn't go through. Next three days in northern Catskills ( gorgeous ) I didn't worry about it until I got home and saw what might have been. AH well, its not the boats you catch but the ones you miss, like the USS Paper Titanic, that are important. Forgive me all, for playing both sides of the street, but I think I am turning into a trader and a goldbug!: )

MSUN My next CPR class will have that joke, if there are no sheilas! Ted, thanks, I must admit to be "dying" to know what Drips you have been holding onto all these years that you keep talking about. I believe I will hang them on the wall as my first buy order after the crash!: )

Sounds like a good strategy.....yer Bears are off to a slow start...eh!

Auric G'day. funny you should talk of Kuwait, I've been deviling in Virtual Kuwait all day, dressed as Hercules Poirot

I'll have to stop for a pink gin soon

Back to the souk :- )

forget the past forget the future the here and now is now!

Try rum mate....burp...

Amen, Brother Goldfinger! But don't be so sure we're gonna hit 9,000 before the end of October and before the smash begins! Now that the Bubba has raised interest rates ( even in the face of soaring unemplyment ) can the US be far behind? I agree with you that AG wants to deflate this speculative stock bubble sooner rather than later. And if jawboning won't do it then bring on higher interest rates! You's hit the nail on the head IMHO when you point out that there ain't much more left to mortgage and borrow against before ALL US liquidity, savings and credit is "invested" in the stock market. As we get closer and closer to that inevitable day of reckoning the stakes get higher and higher that the whole thing will implode and plunge our world into the abyss of debt destruction and depression! Maybe canned food will be worth its weight in gold after all!

The slump is here to stay

Many economists are hailing the end of recession in America and the beginnings of an upturn elsewhere. But even if they can demonstrate some statistical improvements, says Phil Murphy, it will not mean a recovery from a global depression that is deeply rooted in the workings of the capitalist economy Although more people now talk about the world economy being in a slump, what has happened over the past couple of years is not yet fully appreciated. The word slump is still most often used as a synonym for a particularly bad recession. As a result, people wrongly assume that, as the end of the recession draws nearer, so the slump is ending too. This mistaken assumption rests upon the popular prejudice that however bad the economic news is now, things will improve at some time. Recessions end, and recoveries follow. This sentiment is so strong only because the alternative seems so forbidding.

Hard facts
This gathering exuded the general, and well-founded, sense that the
world economy is in a worse condition than at any time since the Second World War. Indeed the meeting was convened specifically to review the uncertain prospects for economic recovery in the industrialised world. But the participants also managed to retain an underlying faith in capitalist renewal. The 'good' news that the recession is over in America and, technically speaking, has been for over a year, was used to declare that a world recovery must emerge some time. Set against this, the hard fact that Germany is in recession and is now being joined by the rest of continental Europe and Japan was presented as if it was a minor inconvenience

Iron law
The workings of this law of capitalist economics can be temporarily offset by various factors, but in the end falling profit rates will be
the dominant tendency. The point comes when profit rates fall so far that there is not enough profit to fund the next phase of investment in new and more costly plant and machinery. This is what caused the business downturns of the nineteenth century, and it has also ultimately been behind the series of economic crises in the twentieth century. The very drive to make more profit will unleash the forces which create the crisis.

The problem is that capitalism tends to undermine its own capacity for profit-making, by reducing the number of workers employed relative to the amount of machinery and plant used. Here we are not just talking about redundancies imposed in a recession. We are identifying an inherent feature of the capitalist economy which can be observed even during the times of boom.

Every employer seeks to raise productivity, so as to be more competitive in the marketplace and realise more profits. At the overall level of society, this is expressed as the replacement of profit-creating labour with investment-intensive technology. Of course, more and better equipment for each worker means each one can produce more. A worker in today's hi-tech, computer-organised factory will be far more productive than one in the low-tech factories of a century ago. However, he will also have far fewer others working alongside him. And that is storing up
trouble for the capitalists.

Symptoms of decay
There are no silver linings to the clouds of depression. The 'sound
fundamentals' they talk about are really symptoms of decay. Look again at America. Its recent high productivity growth is not a sign of dynamism, but of weakness. It has not been brought about by any significant boost to real productive investment. Instead, capitalists have been closing older, less productive plants and cutting back on the labour force. By simple arithmetic these cuts provide an inevitable one-off boost to productivity figures. But they are hardly a sign of economic health.

Low inflation is also a source of pride, but this too is more a sign of
feebleness. If the economy is so stagnant that nobody can get away with putting up prices to try to boost profits, then inflation rates will fall. How a low level of price rises could ever translate into a revival of profitable production is a secret which none of the experts appears to be prepared to divulge.

Rationalisation, reducing capacity, and above all cutting jobs is another capitalist survival measure which hits most of us hard. Job-cutting cannot restore profit levels decisively, but it can temporarily boost the accounts. This is why mass unemployment is here to stay. And, as the recent spate of redundancies across the industrialised world highlights, there is no reason to suppose that it will stop rising at the current level of about one in ten of the workforce. The slump which began with a fall in capitalist profitability has moved on to the savaging of working people's living standards.

http://www.junius.co.uk/LM/LM54/LM54_Slump.html

Ted, yes the Bears are, course we have been out of town most of the past two weeks, so now that the Roebear's are back we will try to give 'em a boost! My compliments, I think, on your market timing. I play some on the paper market, but I do play right next to the exit, with gold/silver/mining stocks in the getaway car! I am not discounting Mr Puetz, I look to a longer time frame, but the danger is real and I am also looking to make some fun money for some well timed puts. ( After all, Roebear is half Bear: ) Greenie can't keep it together forever, though he has been doin a fine job so far.

Again, i do not seem to be able to see the posts at kitco from 00.00 a, on 12 Oct. just me?

a rhetorical post as i canna see the ansa.

yo

test

aurator, I have been having problems also around midnight. It appears after you post that to get early am posts for the 12th you have to put in the 13th! Of course, if you haven't discovered this, then you can't read this solution: ) HA! Next I am going to plug in the 14th, and if I get Kitco on the 14th I am going to extend all credit lines ( even the kids! ) on the open Monday and with any luck I'll get back here by today to let you all know what the scoop is:- ) ) If I figure out what day it really is...and of course if you all will keep it a secret till the 15th!

Panda: Spotted your post on T Bonds. I also noted the drop in the dollar, and Donalds post about the foreign investors selling Treasuries. If I understand ANOTHER, the CB's could "sell" gold ( I think the term is more accurately loan it ) to an intermediary, who could buy dollars ( or treasuries ) thus pushing the dollar back up.
I understand all but the last paragraph of your logic. The CB's response would be to loan the gold to keep the dollar up, as per ANOTHER.
If gold goes up, it is because the CB's have decided to let the dollar fall.
I do agree with one point you made in your last paragraph --- "gold is not a credit instrument" The CB's have achieved the manipulation of the dollar without using the conventional methods of credit and interest manipulation. To me this is like a Corporation that has a secret set of books, one for the Auditors ( ie, the general public, or non-Fed members of our own government ) , and the "real" ones that hide many secrets. Doesn't it sound odd that Greenspan does not want full disclosure of derivative trading? Perhaps there are too many skeletons in the closet. Either way it makes life especially difficult for people like us, because after we think we know the rules, we find out there really aren't any, except possibly those of the LBMA, where private individuals, corporations, and central banks all trade in secret.
You ought to read Vronsky' post #6 on the LME and the Copper fiasco. If I remember correctly a single investor had cornered 1/10 of the copper market, and there was suspicion of some shady dealings at the LME that were "promptly stopped". Since the LBME and the LME are connected, apparetly with similar structure -- the same dealings could be happening with gold.
Perhaps some powerful intermediaries who were originally working with some Central Banks have struck out on their own, and are manipulating the price of gold -- up or down! ANOTHER did allude to this also! He did say that the process set up by the CB's had gotten out of hand, and so did Big Trader! The key question in all of this is - how much longer can the CB's maintain control of the price of gold -- or is it now in the hands of "others"?

Panda: Spotted your post on T Bonds. I also noted the drop in the dollar, and Donalds post about the foreign investors selling Treasuries. If I understand ANOTHER, the CB's could "sell" gold ( I think the term is more accurately loan it ) to an intermediary, who could buy dollars ( or treasuries ) thus pushing the dollar back up.
I understand all but the last paragraph of your logic. The CB's response would be to loan the gold to keep the dollar up, as per ANOTHER.
If gold goes up, it is because the CB's have decided to let the dollar fall.
I do agree with one point you made in your last paragraph --- "gold is not a credit instrument" The CB's have achieved the manipulation of the dollar without using the conventional methods of credit and interest manipulation. To me this is like a Corporation that has a secret set of books, one for the Auditors ( ie, the general public, or non-Fed members of our own government ) , and the "real" ones that hide many secrets. Doesn't it sound odd that Greenspan does not want full disclosure of derivative trading? Perhaps there are too many skeletons in the closet. Either way it makes life especially difficult for people like us, because after we think we know the rules, we find out there really aren't any, except possibly those of the LBMA, where private individuals, corporations, and central banks all trade in secret.
You ought to read Vronsky' post #6 on the LME and the Copper fiasco. If I remember correctly a single investor had cornered 1/10 of the copper market, and there was suspicion of some shady dealings at the LME that were "promptly stopped". Since the LBME and the LME are connected, apparetly with similar structure -- the same dealings could be happening with gold.
Perhaps some powerful intermediaries who were originally working with some Central Banks have struck out on their own, and are manipulating the price of gold -- up or down! ANOTHER did allude to this also! He did say that the process set up by the CB's had gotten out of hand, and so did Big Trader! The key question in all of this is - how much longer can the CB's maintain control of the price of gold -- or is it now in the hands of "others"?

Scotty check out this http://www.yahoo.com/headlines/971010/business/stories/commodities_5.html

aurator, I hope you break through, its lonely out here. I would like to tell you all what the markets will be on Mon and Tues but that would break the laws of time and space. And I will need those to get to the bank!; ) Oh, and the "Barts Back to the Future" window just closed, looks like I have got a lock on Kitco King ( or Queen, Mike S?:-0 ) soon. See ya all at the cashiers window, I'm off for some sleep. Oh NO! I'm dreaming already, drat!!!!

Good night Roebear+ ALL....tis late on the far-east coast ( 2:21 am ) ug...

Good night Roebear+ ALL....tis late on the far-east coast ( 2:21 am ) ug...

Scotty check out this:
http://www.yahoo.com/headlines/971010/business/stories/commodities_5.html

To all: Has anyone noticed that the posts for the 12th are actually on the 13th. We have a temporal shift? Aurator -- are you up to something?
Goodnight,everyone!

cant see a thing

Reobear: Like your post on the time sync problem! I also immediately thought of Aurator. I wonder -- does it work equally well forward or backward? Think of how much money we could make if we could post to ourselves, say one week ago! Re: that 8 dollar drop in gold that caught us all?

Aurator: I know where you are even if you can't see yourself! Just wait till you see my post tomorrow when you figure where you went! Isn't it a good thing we don't have too many real ( underline real ) time paradoxes, or we would all be screaming lunatics? Goodnight all - but is it the 12th or the 13th? Ahhhhhhhhhhhhhhhh!

6pak: re: 10/12/97 00:39 Liked your post about the "slump". Now we have our A Greenspan worried about inflation, and SE Asia just went into a deflationary crisis. What was that phrase -- our government is always fighting the last war? It's like our economy is rushing down the highway, and our gurus that run it are looking out the rear window. It would be hilarious if it weren't for the fact that we may really be heading for a recession or worse. Guess the only thing to do is watch the markets and the commodity price indices. Beware the plummeting commodity prices !! The investors come later.
I actually doubt that we are headed for a depression, but this is much more serious than a little inflation. Of course, Greenspan is more worried about the market bubble than he is about the inflation. Let's just hope he doesn't pop it too fast!

goldfinger: You should talk! You've got all the gold anyway, so the market crash won't affect you! Have the CB's asked you to help out yet?

Roebear: This is JTF calling back from the 13th of October to the 12th. This time I spelled your name right. Still no response from Aurator in this time either. I wonder what kind of poetic response we will get? Unfortunately I will have to wait till tomorrow -- the 13th or the 14th of October -- now I am confused too!

tap* tap*

Is this thing working??

TED, EB, Mike Sheller, please e-mail me if you can see my postings, the aurator has been gagged ( that may not be a bad thing ) , but I wanted *silver* spurs too.

Stolen from Avid chat.
Seems like some of them see further than others

Bulls Bears Bunnies Chart
http://www.village2000.com/moneymachine/sentiment/chart.gif
Sentiment Chart
http://www.village2000.com/moneymachine/sentiment/perchart.gif


I look forward to your gold analysis. I am bullish, but unsure about the next couple of days....think its up though.

One note to the excessively bullish: whether the bull is over or not, we will NOT go straight up in an upcrash explosion.....that would scare the heck out of the FED and they aren't going to let it happen!!!!!!!!!

If the foreigners have quit buying as indicated by the FED's custody account, I don't see how bonds can continue their bull run...

" Greenspan was likely very disappointed that the market made no real downside progress after his threat so if stocks start another bull run he will raise and he might not even wait for FOMC." Yes, that is the idea. The market ( that means the people with the power to make it go up or down ) want to force Greenspan to hike. They need a scapegoat, because they can't hold this thing up forever. They want to say "Hey, it wasn't our fault the market crashed, Greenspan raised the rates" too all the little people who'll naturally want to band together in class action lawsuits. AG, on the other hand, doesn't want to be pressured. There is a conflict here, no doubt about it. But I think AG will quit before he hikes. And I think I am starting to zero in on what changes the paradigm -- AG retires. And I do agree that the top could be any day now, but I just have not seen it yet, and if AG keeps resisting, we may not see it for some months. Even if he does, the market will likely fade the hike, so people selling the news will get smoked. Bottom line, don't mess with the power, do what they are doing and they are buyers now.

He speaks again Tuesday, I believe....he will keep jawboning and if the market ignores him, he will pull the trigger. It is his custom to warn. He's warning.

Did you people notice that Greenie spoke in plain English last week instead of his usual Fed-speak. He is no longer crying wolf --- he is the WOLF!! This market may mess around with new highs this week ( i'm leaning towards no new closing highs on s&p ) then next week - watch out bulls.

what happened in Mexico after their currency was devalued in 1995?????? 50% inflation.....this is going to happen in China, Hong Kong, Korea, Indonesia, Malaysia, Taiwan, and the Phillipines.......the inflation you have been looking for is on the crux!!!!!!!! What's that going to do to U.S. exports?

Buy gold!

The desire of the Central Banks has been expressed through German rate hikes, Thai bailouts, remembrances of 87's past, Fed Chief warnings, ad infinitum.. A market which avoids exuberance can also avoid despair and bailout. We heard Greenspan, we watched days where the Fed propped up the bonds, and now we are seeing them avoid participation in the market allowing the rise in rates. They want an orderly market. Neither crash nor moonshot will be their choice. We've tested the top of the Bollinger bands, now we trend to the bottom ( rates are the tell ) , neither one wild and crazy. Just a bias as indicated by the charts. I'll still be making my alphabet day trades, but watching for weakness. I just find it hard to believe that bull's sexual frenzy will continue unabated.

We are close---very close to a significant top. There is still some upside due on the Dow, but it wont be much, IMO. I cant recall a time when we had 3 down days in the DJIA, accompanied by the simultaneous movement into overbought conditions on internal measures, like TRIN. Insiders and specs/members are selling big time ( distribution ) , and the sentiment numbers are showing more bulls in the public. The bears who have ammo remaining are nearing their day. If "FEW" means more than 2 and less than 10, we may be a few weeks from the top. But we are just as likely a few days away, IMO.

This could be the be the Great Bear of 1997, the stealth bear, that all will look back on and say, "August 7, 1997 was the Top that NO ONE Recognized. NO ONE saw it coming, NO ONE knew it existed until months later. Long after the top was in, the bears gave up, the best and least of minds were predicting an explosive upcrash! AFTER the top, the furriest of bears and doom-and-gloom newsletter writers conceded the bull had more to go after the top was ALREADY in. ( Only the Dow will be significant in the history books. )

it is VERY possible that we will have truncation ( failure ) in the market's attempt to make new highs after the current correction has run its course ( which I expect it to have done by Tuesday's close ) . The failure will take a week or so, probably, which would be truly excellent timing after the "sigh of relief" that the October Massacre did NOT occur on Friday ( and it won't ) . However ... it is also possible that we will make new highs, extend the bullish activity into November, with a bull bashing that will take an upspike and turn it into a coffin nail ... so to speak.

I have thought the Scorpio Bears would be rewarded with a Scorpio Crash ( moderated to selling climax )

no question that your charting points to distribution by the biggies, imo ... so many people will interpret the inability of the market to go down with all this "supposed" BAD news as a proof of strength. It is not. It is proof of distribution, I think. Nothing more and nothing less. Ah ... but the trigger pull ... that is the question. Is it a short sharp shot to the head ( Tuesday sharp down ) followed by a search for new prisoners to execute ( recovery for a week after ) ? Or are they truly, finally, ready to massacre? I just don't think they're ready yet. It take a LOT more distribution than we've had in a few days. It takes a MONTH of distribution to get us to the big one, I think.

Logic says we get the bulls quite worried ( they just aren't worried enough, or at all yet ) so they buy a bunch of puts....and then recover into expiration.....isn't this how it's always done.....
yes it is the way it works ... Friday should be a lot of fun ... expiry, anniversary ... much to look forward to for a simple daytrader, methinks

From Investech: the latest releases on the Federal Reserve's "custody account" shows the first 6-month DECLINE in 6 years... which means foreign central banks have stopped buying and even started to sell some of their Treasury holdings.

I am not one of those PHDs that can cook up models to predict how it happens. All I know is we are approaching the end of this game. I trade with the understanding that this market is worthless, it is hopelessly overbought, that we will see a 50% ( at least ) decline in stock prices by 10/98, that there is nothing sacred about this cow ( the bull ) and the market CAN sell-off, but I know they ( those [insert acronym here] ) aren't ready yet so I still have to deal with the buying. Truly, it is a big pain in the rear, but if I am going to continue to make money in this market, I have to respect the bias. If it is still up ( which it is ) that's just the way it goes!

Less than one buyer for every three company executives making market trades in their companies' stocks are buying, the others are selling. Why do you think Buba raised interest rates for the first time in five years with their unemployment level......because they have a stock market bubble is why I think. These CB's do not work alone....they are as tight as ( well never mine ) .....anyway, Canada, Germany, Britain,....... and our FED will be next. True Greenie is in a quandary, but his own words Here are the words of the former governor of the bank of Japan, "Looking back we feel we should have applied the brakes on the excessive boon much earlier...However, back in those days as [consumer] prices were not rising, it was difficult to obtain people's understanding for a policy aimed at achieving sustainable economic growth by tightening." These guys, the cb's, are in communication all the time. Greenie is not going to make the same mistake. As Pivot says, "this time he is the wolf." And if he resigns, the market won't take that well either. He telegraphs his intentions very clearly for those that hear. He will tighten.

Even with this decline and three days of declining a/d, 5 and 10-day moving averages of $trin have reached the most overbought levels since just before the early August peak Put/call ratios are at their lowest level since 1989.

We had three days of $tick at nearly -1000 and very little price depression. This is distribution at its ultimate.

I think the 'market' wants to make a complete fool of AG. It doesn't matter what he does, they are going to fade AG short term at least. I really hope we get a big fat juicy rate hike. I have been waiting and waiting and waiting for the FED to finally cave in and deliver those rate hikes, hopefully this will pull in some suckers to drive the dollar to fresh highs so I can finally sell the darn thing -- that is another great trade waiting to happen. They are still trying to get us to think that the big YEN rally is going to start Monday. I say no way. The dollar has to become 'hyper-bid' before it is really sellable. Same w/stocks. Bonds though can easily diverge from both. The dollar has been anticipating a major trend change in interest rates and I am really getting tired of saying this, but they will not let go until those rates go higher. But no more of this 1/4 pt garbage, it has to be 1/2 or greater to finally signal a real change in trend

"only in 1987 and 1929 has the dow been so far overextended above its 200dma."

could be a very interesting week with the CPI probably coming in stronger than expected...all we need now is some bad quarterlies from INTC and a couple others and wow

If bond rates continue to rise while the $ falls and as 2 says and gold goes up, anyone that ignores that signal is in the words of an indomitable avidite "an idiot."

I have no idea about a repeat of '87, ......Greenie will do everything he can to just subdue the market, not crash it.

I think some of DA BULLS might think greenie is serious : )

that bearish candlestick that was formed on 10/3 for the usz7....wow that one anybody should have seen from a mile away

Stolen from Avid chat.
Seems like some of them see farther than others.

Bulls Bears Bunnies Chart
http://www.village2000.com/moneymachine/sentiment/chart.gif
Sentiment Chart
http://www.village2000.com/moneymachine/sentiment/perchart.gif


I look forward to your gold analysis. I am bullish, but unsure about the next couple of days....think its up though.

One note to the excessively bullish: whether the bull is over or not, we will NOT go straight up in an upcrash explosion.....that would scare the heck out of the FED and they aren't going to let it happen!!!!!!!!!

If the foreigners have quit buying as indicated by the FED's custody account, I don't see how bonds can continue their bull run...

" Greenspan was likely very disappointed that the market made no real downside progress after his threat so if stocks start another bull run he will raise and he might not even wait for FOMC." Yes, that is the idea. The market ( that means the people with the power to make it go up or down ) want to force Greenspan to hike. They need a scapegoat, because they can't hold this thing up forever. They want to say "Hey, it wasn't our fault the market crashed, Greenspan raised the rates" too all the little people who'll naturally want to band together in class action lawsuits. AG, on the other hand, doesn't want to be pressured. There is a conflict here, no doubt about it. But I think AG will quit before he hikes. And I think I am starting to zero in on what changes the paradigm -- AG retires. And I do agree that the top could be any day now, but I just have not seen it yet, and if AG keeps resisting, we may not see it for some months. Even if he does, the market will likely fade the hike, so people selling the news will get smoked. Bottom line, don't mess with the power, do what they are doing and they are buyers now.

He speaks again Tuesday, I believe....he will keep jawboning and if the market ignores him, he will pull the trigger. It is his custom to warn. He's warning.

Did you people notice that Greenie spoke in plain English last week instead of his usual Fed-speak. He is no longer crying wolf --- he is the WOLF!! This market may mess around with new highs this week ( i'm leaning towards no new closing highs on s&p ) then next week - watch out bulls.

what happened in Mexico after their currency was devalued in 1995?????? 50% inflation.....this is going to happen in China, Hong Kong, Korea, Indonesia, Malaysia, Taiwan, and the Phillipines.......the inflation you have been looking for is on the crux!!!!!!!! What's that going to do to U.S. exports?

Buy gold!

The desire of the Central Banks has been expressed through German rate hikes, Thai bailouts, remembrances of 87's past, Fed Chief warnings, ad infinitum.. A market which avoids exuberance can also avoid despair and bailout. We heard Greenspan, we watched days where the Fed propped up the bonds, and now we are seeing them avoid participation in the market allowing the rise in rates. They want an orderly market. Neither crash nor moonshot will be their choice. We've tested the top of the Bollinger bands, now we trend to the bottom ( rates are the tell ) , neither one wild and crazy. Just a bias as indicated by the charts. I'll still be making my alphabet day trades, but watching for weakness. I just find it hard to believe that bull's sexual frenzy will continue unabated.

We are close---very close to a significant top. There is still some upside due on the Dow, but it wont be much, IMO. I cant recall a time when we had 3 down days in the DJIA, accompanied by the simultaneous movement into overbought conditions on internal measures, like TRIN. Insiders and specs/members are selling big time ( distribution ) , and the sentiment numbers are showing more bulls in the public. The bears who have ammo remaining are nearing their day. If "FEW" means more than 2 and less than 10, we may be a few weeks from the top. But we are just as likely a few days away, IMO.

This could be the be the Great Bear of 1997, the stealth bear, that all will look back on and say, "August 7, 1997 was the Top that NO ONE Recognized. NO ONE saw it coming, NO ONE knew it existed until months later. Long after the top was in, the bears gave up, the best and least of minds were predicting an explosive upcrash! AFTER the top, the furriest of bears and doom-and-gloom newsletter writers conceded the bull had more to go after the top was ALREADY in. ( Only the Dow will be significant in the history books. )

it is VERY possible that we will have truncation ( failure ) in the market's attempt to make new highs after the current correction has run its course ( which I expect it to have done by Tuesday's close ) . The failure will take a week or so, probably, which would be truly excellent timing after the "sigh of relief" that the October Massacre did NOT occur on Friday ( and it won't ) . However ... it is also possible that we will make new highs, extend the bullish activity into November, with a bull bashing that will take an upspike and turn it into a coffin nail ... so to speak.

I have thought the Scorpio Bears would be rewarded with a Scorpio Crash ( moderated to selling climax )

no question that your charting points to distribution by the biggies, imo ... so many people will interpret the inability of the market to go down with all this "supposed" BAD news as a proof of strength. It is not. It is proof of distribution, I think. Nothing more and nothing less. Ah ... but the trigger pull ... that is the question. Is it a short sharp shot to the head ( Tuesday sharp down ) followed by a search for new prisoners to execute ( recovery for a week after ) ? Or are they truly, finally, ready to massacre? I just don't think they're ready yet. It take a LOT more distribution than we've had in a few days. It takes a MONTH of distribution to get us to the big one, I think.

Logic says we get the bulls quite worried ( they just aren't worried enough, or at all yet ) so they buy a bunch of puts....and then recover into expiration.....isn't this how it's always done.....
yes it is the way it works ... Friday should be a lot of fun ... expiry, anniversary ... much to look forward to for a simple daytrader, methinks

From Investech: the latest releases on the Federal Reserve's "custody account" shows the first 6-month DECLINE in 6 years... which means foreign central banks have stopped buying and even started to sell some of their Treasury holdings.

I am not one of those PHDs that can cook up models to predict how it happens. All I know is we are approaching the end of this game. I trade with the understanding that this market is worthless, it is hopelessly overbought, that we will see a 50% ( at least ) decline in stock prices by 10/98, that there is nothing sacred about this cow ( the bull ) and the market CAN sell-off, but I know they ( those [insert acronym here] ) aren't ready yet so I still have to deal with the buying. Truly, it is a big pain in the rear, but if I am going to continue to make money in this market, I have to respect the bias. If it is still up ( which it is ) that's just the way it goes!

Less than one buyer for every three company executives making market trades in their companies' stocks are buying, the others are selling. Why do you think Buba raised interest rates for the first time in five years with their unemployment level......because they have a stock market bubble is why I think. These CB's do not work alone....they are as tight as ( well never mine ) .....anyway, Canada, Germany, Britain,....... and our FED will be next. True Greenie is in a quandary, but his own words Here are the words of the former governor of the bank of Japan, "Looking back we feel we should have applied the brakes on the excessive boon much earlier...However, back in those days as [consumer] prices were not rising, it was difficult to obtain people's understanding for a policy aimed at achieving sustainable economic growth by tightening." These guys, the cb's, are in communication all the time. Greenie is not going to make the same mistake. As Pivot says, "this time he is the wolf." And if he resigns, the market won't take that well either. He telegraphs his intentions very clearly for those that hear. He will tighten.

Even with this decline and three days of declining a/d, 5 and 10-day moving averages of $trin have reached the most overbought levels since just before the early August peak Put/call ratios are at their lowest level since 1989.

We had three days of $tick at nearly -1000 and very little price depression. This is distribution at its ultimate.

I think the 'market' wants to make a complete fool of AG. It doesn't matter what he does, they are going to fade AG short term at least. I really hope we get a big fat juicy rate hike. I have been waiting and waiting and waiting for the FED to finally cave in and deliver those rate hikes, hopefully this will pull in some suckers to drive the dollar to fresh highs so I can finally sell the darn thing -- that is another great trade waiting to happen. They are still trying to get us to think that the big YEN rally is going to start Monday. I say no way. The dollar has to become 'hyper-bid' before it is really sellable. Same w/stocks. Bonds though can easily diverge from both. The dollar has been anticipating a major trend change in interest rates and I am really getting tired of saying this, but they will not let go until those rates go higher. But no more of this 1/4 pt garbage, it has to be 1/2 or greater to finally signal a real change in trend

"only in 1987 and 1929 has the dow been so far overextended above its 200dma."

could be a very interesting week with the CPI probably coming in stronger than expected...all we need now is some bad quarterlies from INTC and a couple others and wow

If bond rates continue to rise while the $ falls and as 2 says and gold goes up, anyone that ignores that signal is in the words of an indomitable avidite "an idiot."

I have no idea about a repeat of '87, ......Greenie will do everything he can to just subdue the market, not crash it.

I think some of DA BULLS might think greenie is serious : )

that bearish candlestick that was formed on 10/3 for the usz7....wow that one anybody should have seen from a mile away

Nick@C
With all this pessimistic talk on the net at the moment, I think I should pyramid into a few more puts on the NAB ANZ CBA and calls on NDY, LHG.
LHG to $5 on solid gold rise?
The Risk/Gain seems cheap.

We have the whole wide world in our hands, the whole wide world in our haaands. Believe it.

TED Good morning, it will be when you read this. thanks. when at my msost paranoid, i is sure some mudder&ucker has got a shortlist of chaos filters jes to play wiv us.

I am in the souks for a few days, under M's instructions, and with Q's golden gizmos

Gartman is not real right? I mean does he make money out of selling that sh%t. Naahm i reckon he is just another spot of clever Turing programming, Bartman, you is good, You don think that the real currency fold are gonna give way to wallpaper? so stop testing us.

Past present and future are fusing@kitco

The sages@pages.kitco are showing their hands

ignore@yourperil


some brief sagacities for my kitco friends

I am afraid that ordinary citizens will not like to be told that the banks can and do create money, and they who control the credit of a nation direct the policy of the governments and hold in the hollow of their hands, the destiny of the people.

Reginald McKenna, Chancellor of Exchequer England 1924.



The Governor of the Bank of England must the autocrat who dictates the terms upon which alone the government can obtain money.

Sir Drummond Fraser, vic-president of the Institute of Bankers England 1924


He who controls the money supply of a nation controls the nation.
President James Garfield 1881

Financial Panics are scientifically created
Congressman Charles Linbergh of Minnesota 1920.


Give me control over a nations economy, and I care not who writes its laws.
Meyer Amschel Rothschild. Quoted in The Federal Reserve Bank by H.S. Kenan.

Money places the largest part in determining the course of history.
Karl Marx


aurator, watching the birds, and seeing cherokee in a new light

I was interested in a much earlier discussion about leasing gold from the CB's at 2% then using it to buy US bonds yeilding 6%. How is the leased gold then used ? As collateral for a loan in $US or is it sold for $US to bbe bought back at a later time to concludethe leasing agreement.

Do you ever follow Arch Crawford. Grizz on Avid tonight was reading
Arch's newsletter and commenting and said that Arch said if we think it is
WILD now wait til Oct 14. 15 and 16th. ???


Emailed to me from a true Kitco fan.
Reposted with thanks.

Aurator - Hi seems like they're messin with Avid too.
Maybe a few bright heads are hitting the right buttons tonight, and they don't like it.
Imagine AG getting today's raves delivered to him with a coffee.
I imagine he would ask to be alone for a minute just so he can have a private think. IMHO

Nick @ Aussie & to all Nicks wherever you are

agree, on your take, in the kingdom of the blind, the one eyed-man is KING, ( or Queen, Sheller??;- ) i have been able to "waste" a glorious Auckland Spring ( 19 cent ) day in the souks of the M.E.not yet found what i is looking for, but has something to do with the London Gold Fixing Cartel, and its members, I'm sorry, Gold Fixing Club. Since before USA, or Australia, or Canada, or NZ were even nations. not conspiracy, just frightened people....

6pack, Donald, JTF, Carl, come in!

Calling all SAGES@PAGES,KITCO

we have the answer, we know it, we just can't find the words, let us upchuck what we know, and call on the synthesiser.

the people are deceived, because they want to be deceived.


salt r us.

JTF ah, the wisdom of 20:20.

but did you catch possibly the first meta-rhetorical post @ 0:52?

Roebear

Good one mate!, ... though this be madness, yet there be logic in't.

maaa


ingrish is a forn tung

Aurator: Prior to the establishment of the Bank of England in 1694 the role of banking was performed by goldsmiths. They had two types of goldsmiths in those days. One group were called "working goldsmiths" who mostly made jewelry. The other group was called "exchanging goldsmiths" who acted as bankers, exchanging coins and providing safe-keeping and the like. I find no reference to a " fixing club".

Donald, G'day, by which gold fixing club, and their M.E agents and subsidiaries I mean:

http://www.kitco.com/london.fix.article.html

do some searches in your search engines on these names. I am sure you will have better luck than i,

around the world

T. E Lawrence,

who said ( pardon my indelicacy, if that it what it is ) : cos i don't believe it, it is a bon mot.....

Women for duty
Young boys for pleasure
and
Melons for ecstacy


heh heh

G'day Nick@Aussie and Aur@ator. What a day I've had. I've got about 400 book marks--which are getting totally unwieldy--so had a brilliant idea--I was gonna ORGANIZE the whole shebang!!! So I start organizin'--pushed the wrong button and the whole damned lot of em' DISAPPEARED!!! You think I could find em anywhere--searched for an hour!!! Finally managed to drag em back from somewhere that can't be deleted unless you're standin' on yer head in the nude, holdin' yer nose, drinking VB,and shouting "Hail Mary" while pushin' the delete button ten times. That's the end of my bookmark organizin' until I figure out how this newfangled goldurned thing WORKS!!!

Now--got that off my chest--feel much better.

Nick ( @A ) --loved that piece from Avid. Have a feeling that guy really knows what he's doin'!! My take , personally, is that the markets this week are gonna go up, if they don't go down or sideways!!

Actually if there is one more last hurrah in the OZ all ords--I'm goin' whole hog ( oink oink ) into more of those put W's. Didn't they do lovely things this week!! I also loved the way the goldies held up in the face of a big one day drop ( Normandy--you little beeeeauty!!! ) . As GSC says--isn't it nice to be buying the dips for a change. I am rather fortunate in that after a lengthy hiatus, I only recently got back into the precious. So I have no emotional baggage about having bought at higher prices. I also don't hold things that go against me-- so if there is a big, meaningful shakeout in precious ( shares/calls etc. ) -- I would unload the lot and try again later at a better price!! I also have put options on the SPI -- only problem is that some of the biggest components ( miners/gold ) are likely to ameliorate the fall a bit. I wouldn't be surprised if we had an absolutely mad week with huge swings and a very large spike that would break a lot of the chickensh%ts. I hope I'm quick enough ( and gutsy enough ) to jump in on the top of the spike ( whichever way it may be ) --- as panic buying/selling create marvellous opportunities. Some of the best trades I've ever made were when my broker said "You have gotta be kidding!!" It may not happen that way. We may have already seen the end of paper and the birth of stuff. I hope so. A nice gradual 200 percent a year will do me just fine!!!

Aurator: This is on the Gold Eagle site.
http://www.gold-eagle.com/analysis/london_goldf.html

Nite all, at least, being sunday, I can trust the Westies not to decimate ( sic ) the price of my precious while i sleep. ( although I still expect less than $295.00 before $5,000.00 )

The world spins, more crazy than cruel,
and one of us soon will be twirling
on top of his t##l....

O.A.P. = Old Aged Pensioner

apologies to J P d.

Mike Sheller: Does the date October 28, 1997, have any astrological significance that we could associate with the Greenspan request to speak to Congress?

Donald--G'mornin--I'm willing to bet we'll have a VERY nervous market preceding Oct. 28th!! Your guess as to the topic of A.G.'s lecture??
Resignation speech??

This from history: "Roy Young, Chairman of the Federal Reserve Board, spoke out against excessive speculation in February, 1929 and stated that unless the banks curbed their brokers' loans, which were feeding the speculation, the Federal Reserve would take action. But in March the Board of Governors turned down a recommendation by George Harrison, Governor of the Federal Reserve Bank of New York for an increase in the discount rate from 5 to 6 percent. It hesitated to raise interest rates for fear of the pressure this would place on the gold reserves of European central banks.

The agony of the dilema is apparent in the exchange between Harrison in New York and his board chairman, Young, at talks in Paris. Young insisted on the need for the Federal Reserve Bank to take prompt and effective control of the market, not only for prestige but also to curb the call money rate, which dominated the world's monetary position and menaced the reserves of central banks recently returned to the gold standard. In a separate telegram he suggested that Harrison should go over the head of the board in Washington and take the case to President Hoover or to the Secretary of the Treasury, Andrew Mellon. The present position was exquisitely painful. A higher rate to break the stock market or a lower rate to repulse the attraction of call money.

Young was followed in public utterance to talk down the stock market by Paul Warburg, one of the fathers of the Federal Reserve System and the leader of Kuhn, Loeb & Co. The signals reminded Warburg of the Panic of 1907. Stock prices were too high, forced up by a colossal volume of loans and an orgy of speculation to a level unrelated to prospective increases in plant, property, or earning power. The market paused, regrouped, and moved higher. Bankers, barbers, bootblacks, and professors talked the market up. The Federal Reserve Bank of New York was finally permitted to raise its discount rate to 6% on August 9, 1929. The market paid no attention. On September 1st the stock exchange added more seats, awarding a quarter seat to each member in its own stock split. The price of a seat hit an all time high of $625,000, up 400% from 1926."

From The World in Depression, Charles P. Kindleberger
( The actual top was September 3, 1929, but no one knew it )
Has this kind of talk been going on behind the scenes between Greenspan, Comptroller of the Currency, Ludwig, Rubin and Clinton? Does the October 28th appearance have this scenario for its backdrop? High drama may be about to happen.

MAO = Most Auspicious Occasion

In the precious metals sector, gold prices are expected to rise on the back of festival demand and a rally in world markets, dealers said.

Demand usually picks up ahead of Diwali, the Hindu festival of lights, which falls this year on October 30, and considered the most auspicious occasion for buying gold and silver.

Commodities-Indian cotton,zinc prices seen falling
http://biz.yahoo.com/finance/97/10/12/y0023_z00_1.html

http://builder.hw.net:80/news/1997/oct/06/loan06.htx

Aurator: Are you still with us? Are you in the right day?

http://biz.yahoo.com/finance/97/10/05/y0004_y00_2.html

Nick@C: Good Morning. I have been busy looking for the pieces of the puzzle that leads up to October 28th. Mabye it is a false alarm but it has the feeling of an "October Surprise" to me. Something could happen on an earlier date and he selected the 28th to explain the reason why.

http://washingtonpost.com:80/wp-srv/WPlate/1997-10/10/065l-101097-idx.html

Opinion on SF/DM and the EMU - go to economy
Plus charts and raves on Footsie and Dow

http://www.btinternet.com/~stargate/index.htm

http://biz.yahoo.com/finance/97/10/09/z0000_z00_40.html

Donald: I may be more optimistic about our future than you are, but it does not make me any less nervous. A Greenspan has a difficult project in front of him -- how does he deflate the market bubble without making it pop? After a certain time, I suspect the bubble is so large and fragile that the outcome is inevitable. Let us pray that we are not quite there yet -- and that the voices of reason can bring the market down slowly. Our A G will go down in history as our greatest Fed governor if he can avoid this crash or the dollar crisis while he is at the helm.

The crisis that cannot be avoided will not be the collapse of the stock market bubble -- it will be the collapse of the dollar. Again, we do not know when, only that history is quite clear on this matter. I'm sure AG knows about this as well, and is trying to make the transition to a world currency where the dollar is a much smaller part. This is not likely to be an easy transtion - first because much of the gold derivative trading that he needs to use is essentially unregulated ( read LBMA, and now Istanbul ) , and secondly because the world wide reforms necessary to prevent a dollar crisis won't happen until after the crisis is over. How many street lights are put up at that intersection before someone dies?

http://www.usnews.com:80/usnews/issue/971020/20week.htm

Wall Street Alert as Crash Anniversary Nears
'STANDARD & POOR-ER!'

http://www.yahoo.com/headlines/971011/business/stories/stocksweek_2.html

Good morning all. JTF, are we back on the 12th? Glad to see aurator made it through. Can't hang around much today I have an event to go to and company will be here soon. Ugh, haven't even had java yet. Keep the Kitco flames going all I'll read all about it when I get back tonight, tomorrow, yesterday or whatever!

Nick: Excellent opinion on SF/DM and EMU. It never occured to me that yes - numerous economic aspects of the countries that will make up the EMU are converging - but the processes that were set in motion several years ago to achieve this converge will cause the economies of these countries to diverge on the other side after the EMU has been formed!
How obvious after it has been said! In fact, the more drastic action these countries take to achieve unity -- such as CB gold sales to clean up the books -- without fixing the fundamentals, the quicker it will come apart later. George Soros has said that the EMU is flawed.
This is unfortunate, because pressure must be taken off the dollar -- we need a new world currency!
We also know that even if the EMU does hold together, the countries with stronger currencies will be pulled down by the weaker ones. No amount of fancy currency manipulation can change that! What does that leave the cautious investor as the only real safehaven? Switzerland?

JF: The stock bubble seems unconcerned. I have a piece on paper in front of me from Albert Sindlinger, a pollster and economist. He says new investors are jumping into the stock market at the rate of 300,000 a week for the last 16 weeks. Thats 4,800,000 new investors in at the top, never to get their money back in my opinion. Stock ownership by households is now 45%, twice the highest estimates from 1929. If we had 25% unemployment in 1932 with only 22% of households involved in stocks what can we expect after this crash? Greenspan should have acted years ago.

Good mornin all.....42 degrees and partial sun..

HI!...you were right...the Bears won last night!

Roebear: I think you and I are syncronized again. However, I'm not sure "when" Aurator is -- no current communication with him!

http://www.prnewswire.com:80/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/10-10-97/335024&EDATE=

http://www.arabicnews.com:80/ansub/Daily/Day/971008/1997100814.html

To all: Warren Buffett is rumored to have purchased 2 billion in zero coupon bonds -- I don't have a clue on expiration date. Given how savvy he has been so far, is he really right that interest rates will go down, not up? A stock market crash ( or a dollar crash ) would make interest rates go up, not down! Many months later, of course, if we are heading to big time market generated deflation, interest rates would go down. However, if what we are saying at Kitco is right, the Warren Buffett is in for a big surprise!

Do I have this right? What am I missing?

Signing off now -- will try to login later -- everyone have a nice morning, and good night in advance from up over to down under!

Greenspan Says Credit Expansion Poses Threat to Poor Borrowers

Federal Reserve Chairman Alan Greenspan warned Saturday that an aggressive expansion of credit
in recent years poses a threat to poor borrowers and their communities. In remarks to be delivered
by satellite to a San Francisco conference, Greenspan said low-income borrowers have fewer
resources to rely on when they lose their jobs or suffer other personal setbacks.

If Greenspan's primary goal is to deflate the stock market bubble he may not have to hike rates at all. A more effective weapon might be a tightening of margin requirements. Could this be the real October surprise?

Time for a little seakayaking to clear the cobwebs....

http://biz.yahoo.com/finance/97/10/09/z0000_z00_30.html

JFT: Buffett probably purchased those zeros as a hedge against a market meltdown. Most of his money still is invested in equities.

Frankly, I am quite uncertain as to what interest rates will do if the market crashes. Based on domestic considerations only, they probably would drop sharply. But if the end of the bull triggers a big outflow of foreign capital from these shores, the dollar will tank. That would tend to push up rates. So the key to rates might be whether or not foreign CBs move to shore up the greenback as they did in the aftermath of 1987.

In taking aim at the Stock Market Greenspan warns against expecting the market rally to continue at the torrid pace seen in the last couple years:
http://www.gold-eagle.com/gold_digest/inger1009.html

Deflation and gold prices

If anything thinks it takes inflation to make gold go up, take a look at SE Asia. In those countries there has been a deflationary implosion and the result was higher gold prices Vs. the imploding countries currency.

I have maintained for quit a while that the problem is the currencies. The terms 'inflation' and 'deflation' are somewhat misleading in this context. Look at Mexico during their 1995 currency debacle. The Peso fell dramatically. Interest rates sky-rocketed. Unemployment soared, and so did prices!

The point is this; A currency devaluation is INFLATIONARY in terms of purchasing power. You may have soaring bankruptcies, soaring unemployment, general depression of the economy, BUT, the price of goods will rise.

Remember, there is no bench mark currency ( gold ) ! This was done away with by FDR to allow for, "Flexible monetary policy." ( Read, inflate the money supply. ) Certain 'things' are required by all economies such as oil, coal, and other natural resources. Look at Japan. They are a manfacturing island. Without the importation of raw materials, they cease to be what they are presently.

You may devalue your currency, but you must still buy imported materials with your cheapened currency! Devaluation will raise the cost of those imports, be there domestic jobs or not! All that this means is that prices will rise will you can not find work to feed yourself. A most unpleasant situation...

If you were a Mexican citizen during the 1995 Peso devalution, which would you have done better by? Holding Pesos in the matress or silver?
There is a huge silver mine in Mexico. I wonder how its' stock did during this period?

BBL

View from the top of the hill.
Forward projection of losses:


Scenario 1
1988: Dow 2000 = 1 trillion
1994: Dow 3800 = 2 trillion
1988: Dow 5600 = 3 trillion
1988: Dow 7000 = 4 trillion
1988: Dow 8300 = 5 trillion
Interesting to see on a Dow chart where these levels sit.
3800, 5600, 7000, 8000.
Each one is a Dow leg up.
1 trillion per leg up.
Each leg up from 3800, took half the time of the previous leg.
----------------------------------
15% drop = Dow 7000
Loss = 1 trillion
33% drop = Dow 5600
Loss = 2 trillion
----------------------------------

Scenario 2
1988: Dow 2000 = 1.5 trillion
1994: Dow 2800 = 2 trillion
1988: Dow 4400 = 3 trillion
1988: Dow 6300 = 4 trillion
1988: Dow 8300 = 5 trillion
----------------------------------
12% drop = Dow 7300
Loss = 0.5 trillion
35% drop = Dow 5400
Loss = 1.5 trillion
----------------------------------
Europe would possible suffer a similar amount.
Rest of the globe same again. So multiply losses by 3.

Scenario 1
3 to 6 and at the worst 9 trillion.
Scenario 2
1.5 to 4.5 and at the worst 6 trillion.

Whos going to cover all those trillions.
Makes golds stockpile look small.
$1 trillion in gold @ $330 =3.03billion oz's = 84,500 tons

All figures are approximate.
Please feel free to work out your own figure :- ) ) ) ) )

to Donald:
re: Date: Sun Oct 12 1997 08:02
Donald ( @CyberAttack ) ID#26793:
Sounds like an excellent pretext for government regulation of my favorite internet. Too late for responsible action regarding the "millenium bug", so why not grab some more authority headed by "Mr. Information Superhighway"?

Nick@Aussie: You are not including the derivatives that have been created since 1987. There were zero dollars worth then. Now the estimate by the Bank for International Settlements is $60 billion, mostly currency but plenty of stock types also. They will unravel when the underlying shares sink.

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/baron1013.html

Greenspan took the punchbowl away.
`` ( The Fed ) will have several reports, if they choose to raise interest rates, that they could use for justifying tightening,''

http://biz.yahoo.com/finance/97/10/12/ftu_nob_z_1.html

Panda: Inflation, deflation. It depends where you sit and how rich you are. Food, fuel, necessities especially imported types, things you buy with cash go up. Big ticket items, cars, homes, household appliances, things you buy with credit and can postpone, go down. Rich people who are debt free love deflation. Poor people who owe large debts hate deflation.

I hope that all you North Americans who sleep late on Sunday morning will take the time to scroll back to my historical extract from the Charles Kindleberger book about the 1929 depression. You will find it at 6:51AM. It seems more like "current events" than 1929.

Donald,
Wouldn't the total sum of the derivatives market be at risk in a serious meltdown.

Also
Welcome to the Home Page of J. Orlin Grabbe
. . . inspecting the global underbelly: privacy, money laundering, espionage.
http://www.aci.net/kalliste/

Is this site for real.
http://www.aci.net/kalliste/stocks.htm

And for the joke of the day go to bottom of page
http://www.aci.net/kalliste/blow.htm

Who has more Mana--Sollog or Clinton?
http://www.aci.net/kalliste/Sollog.htm

Donald: What is this Oct 28th Greenspan meeting all about.

Has anyone ever seen gold rally significantly when the Commercials are net short per the COT?

And for a different view:
The End of Ordinary Money, Part I & 2
by J. Orlin Grabbe
http://www.aci.net/kalliste/money1.htm
http://www.aci.net/kalliste/money2.htm

Donald, Nick ( @Aussie ) : I may have misunderstood the dialog about derivatives. If we are talking about the BIS 1996 annual report, I recall that world OTC derivatives only were 25 trillion! Regulated derivatives markets totatl 10 trillion. By now it may be 60 trillion total! "One trillion here, one trillion there, pretty soon that adds up to big money!" I think I just plagiazed Everett Dirkson talking about the Federal debt, with some editorial changes. Donald - you probably know the original quote, and who said it!

No matter how you slice it, when all of this crashes, it will not be a pretty sight! Maybe not this year, but who knows?

How DO they do it?

Its more complicated than this but here is a
close explanation. In the beginning the CBs
didnt sell their own gold. They ( thru third
party ) found someone else who had bullion.
That party sold to a broker who sold
forward for a mine or speculator or
government ) . In the end the 3rd party had
the backing from the broker that he had
backing from the CB to supply physical if
needed to put out a fire. The CB held a
very private note from the broker as
insurance and was paid a small fee. This
process mobilized free standing bullion
outside the government stockpiles. The
world currency gold price was kept down
as large existing physical stockpiles were
replaced by notes of future delivery from
the merchant banks ( and anyone else who
wanted to play ) .
This whole game was not lost on some
very large buyers WHO WANTED GOLD
BUT DIDNT WANT ITS MOVEMENT
TO BE SEEN! Why not move a little closer
to the action by offering cash directly to the
broker/bank ( to be lent out ) in return for a
future gold note that was indirectly backed
by the CBs. That paper gold was just like
gold in the bank. The CBs liked it because
noone had to move gold and it took BIG
buying power off the market that would
have gunned the price! It also worked well
as a vehicle to cycle oil wealth for gold
as a complete paper deal.
Are you with me?
Well a funny thing happened right after
the Gulf war ended. What looked like big
money before turned out to be little money
as some HK people, Ill call them Big Trader
for short, moved in and started buying all
the notes and physical the market offered.
The rub was that they only bought low,
and lower and cheaper. They never ran
the price and they never ran out of money.
Seeing this, some people ( middle east ) started
to exchange their existing paper gold for
the real stuff. From that time, early 1997
LBMA was running full speed just to stay
in one spot! In other words paper volume
had to increase to the physical volume
on a worldwide scale, and that was going
to be one hell of a jump. It could not be
hidden from the news any longer.
This was not far from the time that
Big Trader said that if gold drops
below $370 the world would see
trading volume like never before seen.
The rest is history. Now the CBs will
have to sell 1/3 to 1/2 of their gold just
to cover whats out there. To use the
Queens English it aint gona happen
dude!

Everything is now upside down and
reversed. The more the CBs sell
outright the more the price will rise.
Its not a bearish sign anymore. They
will now sell to keep the price rising
slowly.
What of those T-bonds and the US$?
More later.

Heilige Scheiss! If what you are saying is true, ANOTHER, the BULL MARKET in physical gold has already started and it won't stop until all that paper gold is retired which will ultimately place the world's CB's in a crisis situation where the world is awash in paper currency with little, if any, physical gold to back it up! In the words of Julius Caesar before crossing the Rubicon, "Iacta alea est!" ( tr. "The die is cast" ) and who knows what the outcome will be? Whatever it is, one thing, given this scenario, is for certain, the price of physical gold is going HIGHER, MUCH HIGHER! And CB selling is being done to keep it orderly! Thanks ANOTHER! And a double tip of the Cheesehead hat to you!

Another, Treasuries held by the Fed for foreign purchasers appears to have topped and is falling. Is this related to your story?

Another interesting post from ANOTHER. Will be digesting it. Looks like "when" may be sooner than I thought. We should all remember that the LBMA has been around for a long time, and therefore also the gold loan business. The gold associated derivative trading is new, and would only affect post 1987, I would guess. This new method of controlling gold/oil/US dollar/US treasury prices is what is critical to our understanding what is happening. Sure feels like we are slowly peeling layers of mystery away from the truth.

This site is hot today.

WW ( @NE ) YOUR "Has anyone ever seen gold rally significantly when the Commercials are net short per the COT?" DECIDEDLY YES! From March 1993 gold at $330 to August 2, 1993 high at $410 ( futures ) --- UP 24.5% in only 4.5 months. How does that grabya?! ...OF COURSE, you KNOW what gold stocks and gold mutual funds did in the same period!

The study of history, while it does not endow with prophecy, may indicate lines of probability.

- John Steinbeck

Today - Kitco is alive! My assessment if the following: The Central banks began the gold market manipulation by offering privatre gold to brokers. Since they could use their own real gold as "insurance", they did not need to sell their own gold. As this process evolved "paper gold" ( e-gold? ) came into useage, because then noone had to buy or sell gold. As the paper gold ( the derivative gold? ) became popular , all the trading of US$/oil/US treasuries became based on the paper gold method. Eventually "Big Trader" or some other individual stepped in and started pushing down the "paper" price of gold. Other traders, possibly those selling oil decided that they wanted to go back on the gold standard, and wanted real gold. Now however, the paper trading volume was so high that the Central Banks could not possibly maintain control of the markets, let alone supply enough real gold to cover all demands. If we are now talking about the CB selling of 1/3 to 1/2 of their gold, the public will find out, with catastrophic consequences, regardless of how "worthless" that gold they were told is. Looks like the choice between the proverbial rock and the hard place! Is there really any gold in Fort Knox?

Another: I like the picture that you paint. The only thing missing is public demand. The Asians seem to be the only ones buying gold as an investment and as a store of value for the future. The western public
is totally out to lunch on this, and very very few take even a minor
position in physical Gold, beyond the ring on the finger.
Imagine if only 3% of the current stock market capitalization went into
PM's. It would set off the largest bull run ever in Gold.
Last I heard the funds were net short 6.2 million ounces, and thats the
official position. Add in the over the counter secret trade, and the short covering would be unimaginable.
I have to agree with you that there is probably a lot less available physical Gold out there than we are led to believe, and thats probably the key to how fast Gold soares, once the rally has been ignited.... : - ) )

Nick, JTF: Oops. I was talking trillions, not billions. I'm so old I remember when a million was a lot.

JTF - "Is There Enough Gold" - Title of article in Barrons by J M Keynes in 1929, before the crash. The League of Nations was supposed to solve the problem of central bank imbalances then.

Panda-- love your charts, thanks.
re your inflation/deflation comments- these have been discussed on this
forum at length and I wish to repeat my origional opinion- what we should
expect is an inflationary depression. It should take a number of years to
arrive but when it comes everyone will pay- DEARLY. Remember we've been
borrowing and spending like drunken sailors for decades, when this imbalance is corrected, ther'll be hell to pay.

ANOTHER- your posts have interested me greatly. What I would like to know
is a little about who you are, and your background and where you get your information. If you wish you can keep it between us by emailing me.
reify@sitcom.co.il thanks.

WW: The October 28th meeting is about monetary policy. What seems to be big news is that Greenspan asked for it. That never happens.

Carl" REF: "IS THERE ENOUGH GOLD" Pls give the net location.

WHY ????
Newcrest Mining sells 11.8% Normandy - 1 month prior to Normandy listing o/s?
3/1/96 paid $2.40 for 193m shares.
2/27/97 swaped them @ $1.75 for AU with ANZ bank. 2 year deal.
10/10/97 pulls out and swaps them back at $1.78
Still holds 27m options

Newcrest seemed keen to unwind its position instead of holding.
Maybe NCM thinks gold is going to go up ( or down ) faster than Normandy?
NCM happy Normandy happy Tiger Investments happy.
But why. What did NCM see that made them turn around on the deal with ANZ.
Normandy is to good ( hot ) to give away at the moment.

Thanks Vronsky!

Donald WHY do you think Greenspan asked for the meeting. Is something behind the scenes getting out of control? Remember the Rubin resignation rumors. Is something going to HAPPEN before this meeting and Greenspan wanted to call for it now to avoid the look of panic of calling it later after or during an event?

Vronsky, I got the article while perusing the 1929 Barrons on microfilm. ( The net isn't up to doing all research yet. ) My "copy" is too poor ( from the machine copier ) to scan or I would post it for you. Sorry.

To All: How interesting that ANOTHER's posts are increasing in frequency! Something is heating up. My guess-don't expect another post from ANOTHER today.

Carl: On the issue of FRB custodial accounts topping in August and falling. Part of that would seem to be caused by increasing tax revenues and deficit reduction due to the stock market frenzy. Does anyone know if those custodial account reports are face value or market value?

Carl: Thanks for the info on the 1929 Barron's post. I've got John Kenneth Galbraith's book on the 1929 crash at home ( don't recall precise title ) There may be a reference to the events described in the Barron's article.
What I do remember ( historians please correct ) is that several influential European bankers came to the US, asking for gold, some time before the 1929 crash. I believe that the powers in the US complied ( influenced by the powerful european bankers ) . This lead to inflation of the US dollar, and accelerated the process which lead to the 1929 crash.
Is this "deja vu" all over again? Are we repeating 1929 events with a slightly different twist? Keep some of your powder dry -- the biggest gold rally will be after the crisis is over, not before!

Donald, Your attribution of falling foreign holdings to increases in tax revenue brings up a question I've had for some time. I've seen no discussion by anyone in government or out of the effect of a balanced budget on the economy. Are there no more Keynsians? Wouldn't the present scenario, if it occurred 30 years ago, be seen as an economy buster?

The plot thickens.
Is ANOTHER for real? If he is, he's giving us the tip of a lifetime. But as he said we mightn't like it.
I'm buying but don't know how long I'm holding.
If this market does trash bad, I'll be getting profits out 1/2 way and turning them to physical.

They were some big put purchases on friday in US and here.
One of the co's here Woodside Petroleum was shorted to the max on friday.
This co has been sort of like Dell has been to your market.
That speaks volumes.
I have been getting a daily download of US options from
http://www.gofutures.com/Daily/
The foptions.zip file. You have to get it daily.
Looking at all the series - months/strikes - aprrox 360 of them
I have been analising it with access and metastock - very informative.
There have been so big bets lately - both ways.
Open interest has been increasing heaps on out of the money puts, and they are so cheap. Dec850 put for $500 odd dollars.
One years supply of lotto money. But better odds.
Ominous I think.

forgot = Analysing S7P500 cuts & calls

My wife is calling me away to go see 7 Years in Tibet. Back later.

cuts = puts
2:15am and I'm falling asleep.

A couple of things for sure, the convened meeting with Congress is something of monumental importance - since Mr. Greenspan called it. Safely, we may rule out an announcement that Houdini ( a.k.a. Ehrich Weiss ) will reappear in this world on Halloween Night - as he prophesized on his death-bed, precisely on Halloween in 1926, Equally certain we may be that the announcement will NOT be favorable for the Stock Market. My ventured guess is it will be a change in the Fed's monetary policy... owing to the INEXHAUSTIBLE EXTRAVAGANT EXUBERANCE demonstrated by the stock market in many recent months --- incidently, Mr. Greenspan, you are free to use the above term if it best decribes the market madness AND OVERT LUNACY OF ISSUING 1,000 YEAR BONDS ) - CHEEEEEZZ!

Fidelity Select American Gold & Precious metals Charts
5 Years, 120 day, 30 day and hourly charts at:
http://www.geocities.com/WallStreet/5969
Click on Gold Sectors

Here's a guy who claims that an 1882 bond issued to his grandfather by the city of Knoxville is now worth $1.8 billion and payable in gold: http://www.tampabayonline.net/news/news1005.htm

WW: Why indeed! Trying to answer that for myself and the best I could do was my post of 6:51AM. They are in a dilemma. To get the market under control they have three tools: interest rates, margin requirements and direct intervention. The use of any one or combination will bring political howls as constituents phone their congressional offices in pain. Failure to act, allowing the market to topple on its own, will bring a horrible post-mortem, perhaps impeachment or abandonment of the FRB system, to say nothing of a worldwide Depression. They must be trying for a "soft landing" and want political cover. I think it is much too late for that.

Nick@Aussie:
I own a little woodside. I see it as quite diferrent than Dell. PETRO vs. THECNO. What is your view on woodside? I has been very kind to me over the last couple of years, I was expecting it to continue.

Donald Your view on Gold?

WW: Thinking further through this problem Greenspan brought this mess upon himself by intervention in 1987. That intervention, now widely known, created the myth that "the Fed will never let the market fail" added to the other banking myth "too big to fail" Failure is how we learn . If the Fed is there to bail me out of my stupidity I can speculate and win forever. First individuals in 1987, then Citicorp in 1989, Mexico in 1994, Thailand in 1997. In each case they were right, the Fed did not let it happen. Perhaps the Fed sees the error now and is ready to step aside.

Does anyone think the CBs want a PM rally/thoughts.
I dont see how Europe will sell any more gold if they want a strong Euro. This after the Aussie fall after Gold sale annouced.

October 12, 1997
In the decade since '87 crash, an amazing financial boom

NEW YORK ( CP ) - When the Crash of 1987 hit Wall Street 10 years ago this week, Chicago businessman Bob Goodman says he got a first-hand lesson in the virtues of keeping his investments diversified. "My money was mostly in mutual funds, but it wasn't concentrated in aggressive or growth stock funds," recalls Goodman, now 52 and the president of a book binding company.

Mutual funds, in particular, have flourished. At the end of 1987, U.S. funds of all types held a total of $770 billion. Today, the U.S. fund industry is more than five times that size, with assets of about $4.2 trillion in more than 150 million investor accounts.

In Canada, the value of the mutual fund industry approaches $300 billion
Cdn. The stock market has stoked that explosive growth with a historic rise from its 1987 lows. The Dow Jones average of 30 industrial stocks, the oldest and best known indicator of market trends, fell 984 points, or 36 per cent, over a two-month span that culminated in Black Monday on Oct. 19 of that year.

From its Black Monday loss of 508 points to close at 1,738.74, however,
it has since soared by more than 350 per cent to enter trading today at
8,045.21. In Canada, the TSE 300 composite index lost 400 points on Black
Monday and another 240 the next day. But it still managed a three per cent gain for the year to end 1987 at 3,160.05. It begins trading this week at 7,110.41.

Torrents of money pour into stock funds month after month and year after
year, fed by a powerful faith in the long-term merits of stock investments. In the recovery from the '87 crash, both the stock market and the fund industry got some potent assistance from economic and political events in the United States and around the world - most notably, the end of the Cold War and an ensuing surge in trade and economic development.

Whenever they hear talk like that, suggesting some sort of new, golden era has dawned, many veterans of the financial wars shudder. It strikes their ears as a warning sign of complacency, if not a financial mania.
http://canoe2.canoe.ca/BizTicker/CANOE-wire.Crash-Legacy.html

WW: I am long gold and silver and intend to stay that way. I do not use margin of any kind. I am using Central Fund of Canada as a vehicle.

Another: Your knowledge of the intricacies of gold market manipulation obviously is much greater than mine. But we have reached the same conclusion -- gold is going to go up a lot no matter how much the CBs sell. As I have said here many times -- when private demand takes off gold will surge no matter what the CBs do or don't do.

The fact that gold stocks went down very little when bullion plunged $6 Thursday is a very bullish signal. If the bear market were still underway, FSAGX would have skidded 3% or more, not 1%.

WW: My hunch is that AG would not mind a MODEST gold rally as a tool to cool off overheated equity markets. But knowing the huge short position, he may be afraid that any kind of a decent rally would trigger an upside explosion.

There was no morning joke for a while, so here is an afternoon one.

George took a business trip, having his wife 8-month pregnant. When he was back, he found empty house. He pushed a button on his answering machine and got a message, that his wife born a child and he is a father. He drive fast to local hospital and report himself. Concierge looked at him carefully and told:
Concierge: "Yes, you are a father. But there are some complications"
George: "I am a father"
Concierge: "You see, your baby is not a usual child"
George: "OK, OK, show it to me"
Concierge: "You see, it has no hands, no legs"
George "It is my child"
Concierge asked to bring a baby. After a moment a nurse came in and handed a huge ear, all in bandages, to George.
George took Ear in his hands and whisper: "Ear, my son"
Nurse: "Speak in fool voice, sir. It does not hear well"

PS Buy GOLD, but not tomorrow

Generally speaking, believers are neither happier nor are they better adjusted than non-believers. There are sick, paranoid and vile believers and there are sick, paranoid and vile non-believers; there are sane humane and happy believers, and there are sane, humane and happy non-believers. Personal virtue and vice seem to be completely independent of doctrinal affiliation. - Kai Nielsen Ethics without God


Fool. One who does not suspect himself. - Jose Ortega y Gasset

One defeats a fanatic precisely by not being a fanatic oneself, but on the contrary by using one's intelligence. - George Orwell

All animals are equal but some animals are more equal than others. - George Orwell Animal Farm

Orthodoxy means not thinking-not needing to think. Orthodoxy is unconsciousness. - George Orwell Ninteen Eighty-Four

Power is not a means, it is an end. One does not establish a dictatorship in order to safegaurd a revolution. One makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power. - George Orwell Nineteen Eighty-Four

WAR IS PEACE--FREEDOM IS SLAVERY--IGNORANCE IS STRENGTH
- George Orwell Nineteen Eighty-Four

"...Two and two are four." "Sometimes, Winston. Sometimes they are five. Sometimes they are three. Sometimes thy are all of them at once. You must try harder. It is not easy to become sane." - George Orwell Nineteen-Eighty-Four

Who controls the past controls the future; who controls the present controls the past. - George Orwell Nineteen-Eighty-Four

They begged to be shot quickly, so that they could die while their minds were still clean. - George Orwell Nineteen-Eighty-Four

"If you want a picture of the future, imagine a boot stamping on a human face-forever." - George Orwell Nineteen-Eighty-Four


The whole aim of Newspeak is to narrow the range of thought. In the end we shall make thoughtcrime literally impossible, because there will be no words in which to express it. Every concept that can ever be needed would be expressed by exactly one one, with its meaning rigidly defined and all its subsidiary meanings rubbed out and forgotten. - George Orwell Nineteen Eighty-Four

Doublethink means the power of holding contradictory beliefs in one's mind simultaneously, and accepting both of them...To tell deliberate lies while genuinely believing them, to forget any facts that become inconvenient. - George Orwell Nineteen Eighty-Four


Political language...is designed to make lies sound truthful and murder respectable, and to give the appearance of solitarity to pure wind. - George Orwell Shooting an Elephant

If liberty means anything at all, it means the right to tell people what they do not want to hear. - George Orwell Animal Farm

Men can only be happy when they do not assume that the object of life is happiness. - George Orwell

'Another' is just a 'dude'. ONE dude. Big Trader is just a dude. One dude. And GSC thinks BT is a fraud anyway. Even though Another makes some good arguments, he is still mortal and still just a dude. And the Queeen would have said: 'DudeSir' ;- )

Cheese - 10 - 0 Bears...ouch! Hmmmmmmmmmm...

Ted - Got it! Thanks... you chainsawing mother f...

Get Real...Get Stoxed! And sprinkle with gold 'cause it's pretty...

away...to enjoy the day


you 'dudes' and 'Dudettes' are cool

George Cole: Fascinating posts today! Re: my 10/12/97 08:12 post. I am looking at a one year plot of 30year bond rates, dollar index, and DJones index 3/87 - to 3/88. You are right that long term interest rates actually went down during and after the 1987 crash, not up - i stand corrected. The US dollar bottomed on May 1987. LT interest rates went from 7.5% April 1987, and rose to 10.25% within a day of the crash, and then dropped to 8.75% in November 87.
The lesson I got from this is ( besides getting my facts right ) is that the rise in interest rates preceeded ( underlined proceeded ) the crash.
This was probably due to the turmoil in the dollar at the time, and the selling of US securities by those unfortunates who held them while the dollar dropped nearly 60% from its Feb 1985 high.
My take from all of this is that the next crash will probably be preceeded by rising LT rates ( and a dropping dollar ) as well, because of the extensive foreign investment. If one is to buy zero coupon bonds, the best time would be closer to the interest rate peak, not now. In 1987, anyone who had bet on dropping 30 year rates would have been in for a loss, unless they made the bet near the peak in rates. LT interest rates did no go below pre-crisis level rates for months ( if ever ) after the 87 crash. Our current situation, being more deflationary, rates would drop more after a crash, but it might take many months before an early better would break even.
Like Donald, and probably you, I am long gold stocks. I am still not compfortable with derivatives because I usuall get the time part wrong!
Most of my powder is try, waiting for a convincing upturn. I agree with you that AG will try to make the rise in gold bullion graceful. Lets hope so!!!

JTF: The 1987 interest rate exercise. Is the answer different adjusted for inflation. I may be wrong but I think real interest rates are slightly higher now at 6.5% than at 10.75% in 1987.

EB, all: EB your cautionary point is well taken! Despite all of the information from ANOTHER, I will still trade on market behavior. No "all or nothing" bets based in the infromation from one source! We will all see this coming well in advance of the market crash if ANOTHER is correct. Forthunately we are all active on Kitco, and with Donald on the look out, we should be able to negotiate the sand bars and rapids without sinking. If we do have a crash it may be abrupt, but the turmoil in the dollar, LT interest rates, and the market should give us warning. Hopefully, we will all be nimble enough not to get caught.

Dogmatism and skepticism are both, in a sense, absolute philosophies; one is certain of knowing, the other of not knowing. What philosophy should dissipate is certainty, whether of knowledge or of ignorance. - Bertrand Russell Unpopular Essays

The fundamental cause of truouble in the world today is that the stupid are cocksure while the intelligent are full of doubt. - Bertrand Russell

All knowledge is in some degree doubtful, and we cannot say what degree of doubtfulness makes it cease to be knowledge, any more that we can say how much loss of hair makes a man bald. - Bertrand Russell Human Knowledge: Its Growth and Limits

The infliction of cruelty with a good conscience is a delight to moralists. - Bertrand Russell

I can imagine a sardonic demon producing us for his amusement, but I cannot attribute to a being who is wise, beneficent, and omnipotent the terrible weight of cruelty, suffering, and ironic degradation of what is best that has marred the history of man in increasing measure as he has become more master of his own fate. - Bertrand Russell The Faith of a Rationalist"

Men tend to have the beliefs that suits their passions. Cruel men believe in a cruel god and use their belief to excuse cruelty. Only kindly men believe in a kindly god, and they would be kindly in any case. - Bertrand Russell "The Faith of a Rationalist"

...I do not think that the real reason why people accept religion is anything to do with argumentation. They accept religion on emotional grounds. One is often told that it is a very wrong thing to attack religion, because religion makes men virtuous. So I am told; I have not noticed it. - Bertrand Russell "Why I am not a Christian"

An atheist, like a Christian, holds that we can know whether or not there is a God. The Christian holds that we can know there is a God; the atheist, that we can know there is not. The agnostic suspends judgment, saying that there are not sufficient grounds either for affirmation or for denial...an agnostic may hold that the existence of God, though not impossible, is very improbable; he may even hold it so improbable that it is not worth considering in practice. - Bertrand Russell "What is an
Agnostic"

Science is in its essence nothing but the systematic pursuit of knowledge, and knowledge, whatever ill-uses bad men make of it, is in its essence good. To lose faith in knowledge is to lose faith in the best of man's capacities; and therefore I repeat unhesitatingly that the unyielding rationalist has a better faith and a more unbending optimism than any of the timid seekers after the childish comforts of a less adult age. - Bertrand Russell "Science and Religion"

am persuaded that there is absolutely no limit to the absurdities that can, by government action, come to be generally believed. Give me an adequate army, with power to provide it with more pay and better food than falls to the lot of the average man, and I will undertake, within thirty years, to make the majority of the population believe that two and two are three, that water freezes when it gets hot and boils when it gets cold, or any other nonsense that might seem to serve the interest of the State. - Bertrand Russell "An Outline of Intellectual Rubbish"

Man is a credulous animal, and must believe something; in the absence of good grounds for belief, he will be satisfied with bad ones. - Bertrand Russell "An Outline of Intellectual Rubbish"

What makes a freethinker is not his beliefs, but the way in which he holds them. If he holds them because his elders told him they were true when he was young, or if he holds them because if he did not he would be unhappy, his thought is not free; but if he holds them because, after careful thought, he finds a balance of evidence in their favor, then his thought is free, however odd his conclusions may seem. - Bertrand Russell "The Value of Free Thought"

The freedom that the free thinker seeks is not the absolute freedom of anarchy; it is freedom within the intellectual law. He will not bow to the authority of others, and he will not bow to his own desires, but he will submit to evidence. Prove to him that he is mistaken, and he will change his opinion; supply him with a new fact, and he will if necessary abandon even his most cherished theories. This is not to him a slavery, since his desire is to know, not to indulge in pretty fancies. - Bertrand
Russell "The Value of Free Thought"

The supposed efficacy of orthodox belief in curbing sin is not borne out by history. Not only have believers been prone to sin, but unbelievers have often been exceptionally virtuous; it would be difficult to point to any set of men more impeccable than the earnest free thinkers of the nineteenth century. - Bertrand Russell "The Value of Free Thought"

...if a moral code seems to promote human well-being in this terrestrial existence, it has no need of supernatural sanctions. Kindliness and intelligence are the chief sources of useful behavior, and neither is promoted by causing people to believe, against all reason, in a capricious and vindictive deity who practices a degree of cruelty which, in the strictest mathematical sense, surpasses infinitely that of the worst human beings who have ever existed. - Bertrand Russell "The Value of Free Thought"

Donald: Those rates were not adjusted for inflationary trends. I am no expert on that matter -- don't recall the trend of the CPI preceeding the 87 crash versus now. It was complicated in 87 because the dollar had dropped so much as well! Hard to separate internal and external effects on rates.
If you are asking also how low could rates go now after a 1997 crash -- I don't have any idea!

Donald r.e. 12:58 post. Yup. Time for us buy and hold types to be fully in, then take a vacation to keep from selling out the first time the prices go 'way up. I just hope I can withstand the gee force when this rocket takes off!

JTF: I just did a search at the BLS site for the inflation numbers in 1987. At the start of the year the index was 333.1, in December it ended at 345.7. That is a 12.6 gain for the year, or 3.78%. It doesn't seem right according to memory but that is what it says. So, I was wrong, real interest rates were higher in 1987 than now. Here is the site for future reference.
http://stats.bls.gov/cgi-bin/surveymost

JTF; The current global financial environment reminds me much more of 1929 than 1987. Then as now inflation was low, the Dow/gold ratio was over 20, and confidence had reached an extreme level.

What did the Can$ do relative to US$ in 1987?

http://biz.yahoo.com/finance/97/10/12/z0009_5.html

George Cole:
Re your 13:00 post.

Your bullish interpretation of a weak gold price this past Thursday coupled with a moderate downturn in the xau has me stumped. Given that the essential value of gold stocks is ultimately gold, doesn't it figure that when the xau acts opposite au, the risk of purchase or ownership of the stock becomes ever greater. In other words, when gold doesn't move up in price, the xau will always head back down. In which case, this is a bear signal and stocks should be sold! What am I missing here.

http://www.yahoo.com/headlines/971012/news/stories/gulf_5.html

Nick,

how do you open those zip files? I'v tried but can't seem to.

Every time one of these guys show up gold starts down.

Remember BT How about the recent Soros post and now another Another

Go Short!!

I've been lurking for some time. Great site enjoy Ted's
weather reports. Cloudy and 47 / 12 degrees in Vancouver
this pm.

Since I lost in the Calgary real estate market of 1980
( - 50% ) I have been in gold shares. I have learned patience. It has been my experience that all bureaucracies
( governments, mutual funds, even businesses ) screw up royaly, just as they seem to get things organized and orderly. I think were there.

Ray

From Federal Reserve Board.
As part of your project plan, mission-critical software and hardware should have been identified, tested, and implemented long before the end of 1999. However, if there is a possibility that modifications cannot be completed or processing may not be correct for some of your software or hardware, you should develop contingency plans to provide an alternate mode of operation. Please keep in mind that coding problems will not be easy to determine at the last minute so every effort should be made to ensure that all changes are tested and in place.
http://www.frbsf.org/fiservices/cdc/cdcnews/index.html

Alternate mode of operation? If you are an international bank, what mode of operation? A pencil and a notepad? What about billions of records?

Vile vaiting for der market to go ker-Puetz, I haff found der time to analyze vat goes on at der Kitco site. I now vish to share vith you some of der observations, vitch I hope you vill find very interesting. Maybe der market vill go ker-Puetz soon, or maybe it vill go ker-Puetz later, but talking about it brings out der gun talk. Very phallic, this gun talk. Disturbing, dis fascination vith der firearms. A definite sign of impotence. I vorry about some of you. Der ones that talk about keeping der guns to fight off the unvashed hoards and der jackboot schtormtroopers. I vorry more about some of you being latent mama-schtoopers. And speaking of mama-schtoopers, how about this Soros fellow? Throughout Asia he is seen as the evil Mahathir-schtooper. Too Oedipal for verds. I can understand der paranoia about some have-nots vanting to grabbin your hoard of Schpaghettios. Dis is natural and should not be seen as a serious problem. But let's be realistic about it. If der hungry unwashed masses learn about your supply of schtuff, they vill find some vay to make off vith your little closet full of Schpaghettios. And vat vill you do then? Think of der ethical dilemma that vill face you ven you get even by highjacking der meals-on-veels delivery vehicle. Not so hard to rationalize. Der olden folks don't eat much anyvay. I have no time now to get into der meaty matters of ego, delusions of grandeur and der paranoia of all der dark forces of flux and chaos that are out to get der goldenbugs. But one final issue ve must discuss is premature ejaculation. It takes two forms and must be dealt vith. First of all, every veek it is der time for der market to go ker-Puetz. Ve get a little blip in der gold and a little dip in der schtocks and der Kitco folks come outtin der voodverk to say. "Remember vat I said last veek?" And ve all pat each other on der backs and proclaim how much ve know about der unfolden. Dis, mein fruends, is example von of premature ejaculation. It might give quick, temporary pleasure, but at der expense of extreme public embarrassment. Be very careful. Der other form of premature ejaculation vill come ven der gold schtarts der northheadin. Der goldenbugs vill be so overjoyed that they vill unloadin long before der great gains. Sigmund has some advice for you. Practice a little retraint, a little schtaying power so ven der big ride comes, you can enjoy der benefits for vitch you vaited so long. Patience, ker-Puetz vill come.

6pak: I like your quotes from Bertrand Russell and George Orwell! Today you rival Aurator, who is alas probably sound asleep when we need him.
My philosophy is not to believe any one thing or source as the gospel, but try to build a model ( perhaps a mental model only ) fo the complex process we see around us. As I have said before ( I think ) this is just what a physicist does with experimental data -- the physical model approximates the data -- but never explains all. The problem we have with ANOTHER is that we have bits and pieces of a model and no data. Thus all we can do is keep what model we have deduced, and see how it fits the data we have before us, as events unfold. Eg: how about the inverse relationship between the gold and dollar prices for the last year, the 1929 referenc from Barrons to a plea for gold from Europe, ANOTHERS claim that CB's are "selling" gold to keep oil prices down. We all need to find hard data to complete the model. ( By the way, I do know some of ANOTHER's comments are inconsistent -- re regarding whether oil drives the gold price or the gold price drives oil ) This does not mean we should ignore ANOTHER's comments. I think I have downloaded 2000 pages of information from the Internet, and only a small fraction of this is in regard to investing. Probably half of this information is incorrect, but an intelligent individual can eventually figure out truth from falsehood. I think what we are learning the most from the free flow of information on the internet is that we need to learn how to sort large quantities of partially true information -- if we are to evolve as a species. I think this is what the awakening is all about!!!

Now we have Sigmund with an Austrian accent to boot! Will he mix well with Goldfinger, George Orwell, and Bertrand Russell? Have we missed anyone?

y2k good news.

TESTIMONY OF GEORGE MUOZ ASSISTANT SECRETARY OF THE TREASURY FOR MANAGEMENT/CHIEF FINANCIAL OFFICER HOUSE SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION AND TECHNOLOGY
... but I would like to define the issue from the financial perspective. Clearly, if a solution were delayed, we would be courting disaster and may be facing chaos.
...Chain is only as strong as its weakest link. Government agencies and the business community continually exchange data, creating intricate interdependencies. Those interdependencies create potential weaknesses that are not related to the internal health of systems, but to those external groups upon which certain processes and business functions are dependent. Firewalls can be built to protect each agency's information assets, and that covers the possibility of unconverted data. But if their
systems fail and data is not available, contingency plans are needed.

...many companies won't achieve year 2000 compliance. Globally, by the end of 1999, 30% of externally focused mission-critical systems, and 50% of all systems, will fail to achieve full year 2000 compliance. In North America, only 60% of systems will be fully complaint, and another 30% will have achieved "operational sustainability," meaning the company
will be able to function through work-arounds, triage and similar
strategies.
http://cwlive.cw.com:8080/home/online9697.nsf/All/971010year1906A

Holy war? http://www.cnn.com/WORLD/asiapcf/9710/11/RB000095.reut.html

The latest Barron's had an article ridiculing a convention of stock market bears as a gathering of "masochists." Is this the bull market equivalent of the Business Week "Death of Equities' article in 1974.

Sigmund Freud: Agree with you about the gun talk. And yes, patience will be required to reap the enormous profits to me made in the next gold bull. In fact one definition of a bull market is when long-term investors do much better than short-term traders. If traders do better than investors, it is NOT a bull market. And gold traders have been doing much better than gold investors for many years. Time for a change.perhaps.

Bull markets tend to end for reasons we least expect.

For example, investors lately have been obsessed with inflation. But what if the real threat is
inflation's opposite - not rising, but flat or falling, prices?

Inflation pushes up interest rates, pulling investors into bonds from stocks and driving down profits
by pinching consumers and increasing corporate expenses. But deflation, or its milder cousin
disinflation, can be just as pernicious. They can lead to lower revenues, lower earnings,
unemployment and recession.

Amid the euphoria of this bull market, a few smart people have been worrying about deflation.
Lately, evidence is beginning to show that they may have a point.

If you find the deflation scenario convincing, the best move, by far, is to buy long-term US
Treasury securities. In a deflation, interest rates fall, since fears of higher prices vanish and the
economy is so languid that hardly anyone wants to borrow money. Currently, the 30-year Treasury
bond pays 6.37 percent interest. If you own such a bond when rates drop to, say, 5.0 percent, then
you can either sell it at a huge profit or hold onto its hefty yield.

Billionaire investor Warren Buffett is said to be buying zero-coupon long-term Treasury bonds on a
large scale. ( Zero-coupon bonds are sold at a big discount to their value at maturity but pay no
interest. )

Barton Biggs, chief of global strategy for Morgan Stanley, Dean Witter, Discover & Co., has been
talking about what he calls "the ice scenario" for many months now. He's referring to Robert Frost's
great little poem, "Fire and Ice," which begins, "Some say the world will end in fire;/ Some say in
ice."

Biggs says that, while most people believe that fire ( inflation ) is what destroys markets, ice, as Frost
put it, "Is also great/ And would suffice." Writes Biggs: "Ice is loss of pricing power and a world
where prices are as likely to go down as up. Ice is an erosion of profits. Ice is excess capacity. Ice
is developing countries with low-cost factories and huge ... labor forces."

His conclusion: "I think stocks are dangerous here, and I still like US Treasury bonds and bills best
of all."

What should small investors do? First, don't sell your stocks. Even if the ice scenario sounds logical,
it is only a guess - not a reason to abandon a long-term strategic plan. Still, if you find this icy tale
convincing, you should:

* Make sure you have enough Treasury bonds and cash ( money-market funds, bank certificates of
deposit or Treasury bills ) . If you retire in, say, five years, have about half your portfolio in assets
other than stocks.

Zero-coupon bonds, which you have to buy through a broker, are especially attractive. Beware,
however, that phantom interest on zeroes is taxable each year.

* Consider small stocks. They should suffer less - or perhaps not at all - if export markets dry up.
Bob Carlson's Retirement Watch, a newsletter, likes these small-company mutual funds: Third
Avenue Value ( 800-443-1021 ) , Acorn Fund ( 800-922-6769 ) and Baron Asset ( 800-992-2766 ) .

* Search for great businesses that can survive troubled times. Also seek out companies relatively
immune from foreign competition, such as newspapers, restaurant chains or insurance firms.

* Buy value. The best way to protect against a market decline is to own stocks that aren't already in
the stratosphere - value stocks. The Legg Mason Value Trust ( 800-822-5544 ) , a value mutual
fund, is up 40 percent this year, with a strong three-year record.

* This column is reprinted from The Washington Post.

NEWSFLASH!!! GREEN AND GOLD STOP THE BEARS TWICE ON THE GOALINE AND ASSUME THEIR LEGITIMATE ROLE AS KITCO'S LEADING INDICATOR FOR A NEW BULL MARKET IN GOLD!

Inflation, while the US economy's main event for two decades, is actually a rare phenomenon.
Charles Clough, chief investment strategist at Merrill Lynch, sees it going away, perhaps replaced
by deflation. That would help push long-term interest rates down, boosting prices of long-term
bonds but not necessarily stocks. Excerpts from his television interview on CNBC, with anchor Ron
Insana on Aug. 12,. follow:

We've all learned to identify [economic] growth with inflation. That is something we learned to do in
the 1970s and the 1980s.

But inflation is a very rare phenomenon. If you look back over economic history it is usually
associated with wars. And the inflation we had in the 1970s and '80s was a very unusual event.

It took decades of bad monetary policy to create it.

Our sense in this expansion is that things are quite different. The longer the economy expands, the
more deflationary things become.

In other words, there is more likelihood that prices will start to go down. And the reason is, this
expansion is investment-led. We have a pile of excess savings ... going into investment. And there
are gluts and overproduction everywhere.

The Thais [for example, in devaluing their currency] have just decreased the price of their exports
by 25 percent because there is too much excess capacity there.

So our sense is inflation is not the threat. Deflation is.

[Despite its negative impact in the Depression of the 1930s], deflation can be a very positive
source of growth.... Perhaps there is no period in history that is quite the same, but the most
comparative would be the period between 1869 and 1913. Industrial prices fell at a 1 percent
annual rate, and for most of those periods we had pretty good growth....

We are seeing capacity build faster than demand can keep up....

We think stock prices are high. We are at 22 or 23 times [annual] earnings. You don't get up that
high very often. I think we are beginning to see some companies struggle to maintain the kind of
earnings we have seen. So our sense in stocks is they are not really cheap. We were much more
enthusiastic about stocks when prices were lower. We are very price-sensitive here, and we are
more cautious about the downside [of the stock market].

I do think there are areas of the stock market that still provide good value, and will do very well in
our environment, if we are right about interest rates - that they will eventually fall, perhaps
substantially.

Financials [such as banks] would do well. REITs [real estate investment trusts] would do well.
Some building products industries that do have shortages of supply, like cements, would do very
well....

We like the [long-term Treasury] bond a lot in this environment.

After a rule spanning much of Europe's post-World War II history, the Bundesbank's reign is
coming to an end.

Germany's fiercely independent central bank is due to begin dismantling its operations next year
before shutting down entirely ahead of the creation of Europe's central bank in January 1999.

The bank's hawkish pursuit of an anti-inflationary credo has turned it into a model for central
banks around the world, including Europe's proposed central bank, which economists say is likely
to be the world's most powerful central bank. However, with a meeting of the Bundesbank's
central council set for this week, the question hanging over Europe's establishment is whether the
bank will strike one last blow for the cause of independence by signalling a rise in German interest
rates.From May next year, when European leaders select those nations qualifying for monetary
union, the Bundesbank will begin to coordinate its actions with other European central banks.

Sigmund Freud: For a while you had me worried that my granduer was a delusion. After finding this on the net I am no longer worried.

If the Freudian establishment weren't so inflexible, its antagonists wouldn't be so hyperbolic. But it remains to be seen whether classical Freudian analysis, in the hands of such obstinate, eccentric practitioners, will survive. All analysts are in analysis themselves ( that was one of Freud's commandments ) , and many of them are analyzed by doctors who are their superiors within the psychoanalytic hierarchy. The fears and desires that are unleashed in analysis get confused with professional relationships outside of analysis, to the point where the analysts start acting crazier than the people they're supposed to cure.

( Only at Kitco can you both free gold investment advice and a free mental exam by a famous practicioner ) ( grin thing, really enjoyed it )

Y2K equity risks from prospectus
It's about Y2K risks with Australia's largest telecommunications player, Telstra.
If you consider how important office automation is for today's business climate, this same notice could be included in the SEC forms of most companies.
Here's the *complete* statement, from the "Investment Risks" section
page 34 of the prospectus ) :
--- begin quote ---
Year 2000 date change -- potential effect on networks and systems
In common with users of computers around the world, Telstra is
investigating if and to what extent the date change from 1999 to 2000
may affect its networks and systems. Telstra has established a
programme designed to ensure that the impact of the transition to the
year 2000 on the Company and its customers is minimised by seeking to
ensure that Telstra's key networks and systems are year 2000 compliant before 31 December 1999. There can be no assurance that this
programme will be successful or that the date change from 1999 to 2000 will not materially affect Telstra's operations and financial results. Telstra's operations may also be affected by the ability of third parties dealing with Telstra to also manage the effect of the year
2000 date change."
--- end quote ---

Perhaps instead of spewing forth Bertrand Russell's anti-religion, anti-god, anti-Christian humanistic claptrap as "THE TRUTH" on what I thought was a gold discussion group 6-Pak ought to go out and buy a copy of C.S. Lewis's "THE CASE FOR CHRISTIANITY" and begin quoting from it for the sake of equal time, and for the sake of showing what fools we mortals be who vainly attempt to put ourselves in the position of God. St. Paul said it best: "Professing themselves to be wise they became fools!" "Ever learning yet never able to come to a knowledge of THE TRUTH!" I don't think you want this forum to become a debate between atheistic humanism and Judeo-Christianity, or do you? "Two things conVINCE me there is a God," Nietzsche once wrote, "The starry heavens above ( Mike Sheller knows about that ) and the moral law within." ( ALL of us know about this for without it civilization would soon revert to totalitarianism ala Lenin, Stalin and Mao! ) Nuff said!

On Y2K. Forgive me for my cynicism, but given the quarter to quarter mentality of most corporate planning and thinking, I don't believe most companies are doing much besides having meetings and hiring consultants yet. I predict when you start hearing of lots of firings of computer systems management level people who have talked and talked and done little except estimate the size of the problem and ask for larger budgets, then you're going to see the true proportions and impact of the problem. Until then I believe that the people in companies that "have a clue" about this problem are hoping to be gone before the s hits the fan.

SIGMOND HAS PUT TO WORDS ( IGUESS ) , EXACTLY WHAT I
HAVE BEEN THINKING ON READING SOME OF THESE POSTS.
THERE ARE SOME VERY MANIC PEOPLE OUT THERE. LET ME
GUESS WHY. I WOULD SAY THAT AT LEAST A FEW OF YOU
JUMPED OFF THE GRAVY TRAIN WAY TOO SOON, EXPECTING
A MARKET CORRECTION OR CRASH, WHICH DIDN'T HAPPEN.
SEEING THE TRAIN MOVING FARTHER AWAY FROM YOU,
AND REALIZING ALL THE POSSIBLE GAINS THAT YOU COULD
HAVE MADE GO DOWN THE TOILET, ONLY MADE YOU MORE
COMMITED TO YOUR DOOMSDAY SCENARIO. THE THOUGHT
THEN CAME TO YOU THAT YOU COULD GET BACK ALL THESE
LOST OPPORTUNITIES, AS THE MARKET MELTDOWN BEGINS
AND GOLD SKYROCKETS. THEN YOU CAN SAY TO YOUR FRIENDS
WHO STAYED IN STOCKS "SEE I TOLD YOU SO". IF YOU THINK
I'M FULL OF IT, THAT'S OK, YOUR NOT BEING HONEST WITH
YOURSELF. THE MARKET WILL CRASH SOON, AND GOLD HAS
NOWHERE TO GO BUT UP. GOD I HOPE SO, YOU SEE I AM ONE OF
YOU.

Is the stock market really any better than a pyramid scheme where we have 400,000 new investors piling in each month to give up their money in the hope that one day they'll be at the top. It's just numbers and the simplest exponential growth law which says not everybody can be at the top.
Albania embraced capitalism by throwing a pyramid party which ended spilling out into the streets when it was over. Even tossed out a government in the process. The stock market promises so much but only the companies themselves truly know what they are capable of and how much wealth they can generate and therefore should be required by law to self-regulate over-valuation. It is ludicrous for some pimply faced stock analyst poring over his charts to expect to be able to predict what an electronics hardware manufacturer will be be worth when he probably doesn't even understand the rudiments of operation of the product. Stocks are buyer beware, software stock valuations really are just thoughts blowing in the wind, there's not much more there than an idea. Should the perception change that what was a good idea is not so then the stock valuations have potentially huge downside movements, with tangible asset backing being percentagewise tiny. Shouldn't the public expect some sort of protection against over valuation of a company's stock?, else this is really no better than public fraud. If a company knows it can never peform up to the public's expectations it should be required by law to inform or even sell it's own stocks to keep the price at fair levels. Companies that were eager to boast and buy their own stocks on the way up should now be publicly selling if they feel they are overvalued, else it is really no better than a pyramid scheme surrounded with the stench of fraud.
When the music's over there is not even any tupperware to take home, only a buggy program that crashes around midnight.

http://www.yahoo.com/headlines/971011/politics/stories/brazil_1.html

CARL:
I don't think that a "balanced budget" will
cause a recession since many items including
SOCIAL SECURITY are taken "off budget."
In other words even a so-called "balanced
budget" will still be anything but balanced.

Should have been 300,000 per WEEK. Maybe we can calculate when the supply of possible new investors will be exhausted...use a Lotka-Volterra predator-prey model perhaps.

To all: Passages from John Kenneth Galbraith's "The Great Crash" - 1929
Hougton Miflin, revised 1997. There was an attempt to bring gold back to Europe beginning in 1925, as noted in that 1929 Barron's article.

1 ) Margin rate on stocks were 45-50% in 1929, due to "a residue of caution" Federal reserve did not have authority to set margin rates - done by congress.

2 ) The escape of gold from Britain and Europe ( to the US ) began in 1925, when "Winston Churchill ( as Chancellor of the Exchequer ) , placed England back on the gold standard at the original, pre WWI relationship between the pound,gold and dollars. The consequence was a long series of exchange crises, and unpleasant economic crises, leading to a general British ( coal? ) strike in 1926. In the spring of 1927, Montagu Norman, governor of the Bank of England, Hjalmar Schact, governor of the Reichsbank, and Charles Rist , deputy Governor of the Bank of France came to the US to urge easy money policy. ( They had previously pled with success for a similar policy in 1925 ) . The Federal Reserve obliged, and the rediscount rate of the NYReserve bank was cut from 4 to 3.5 %. Government securities were purchased in considerable volume with the mathematical consequence of leaving the banks and individuals who had sold them with money to spare. Adolph C. Miller, a dissenting member of the Fed, subsequently described this as 'the greatest and boldest operation ever taken by the Fed, and ....[it] resulted in one of the most costly errors committed by it or any other banking system in the last 75 years!' The funds made available by the Fed were either invested in common stocks or ( and more important ) they became available to help finance the purchase of common stocks by others. The London School of Economics Professor, Lionel Robbins concluded: 'From that date, according to all of the evidence, the situation got completely out of control'." To be fair, John K Galbraith stated that he thought the blame of foreign bankers for the crisis was oversimplifying what happened". My impression -- it didn't help. Also it appears that the flight of money from Europe to the US helped feed the stock market rally that eventually lead to the 1929 crash. So, how does AG give the illusion of a tight monetary policy at home to hold down all that "irrational exuberance" and inflate the international US dollar at the same time? Sounds like the same problem in 1929 and 1997. Different solutions?

http://www.yahoo.com/headlines/971012/business/stories/saturn_1.html

kiwi: The last time I heard of predator-prey cycle models was in an ecosystem course I had years ago. Never thought of doing modeling. I think it was two coupled non-linear differential equations -- probably similar to Michaelis-Menton equations for reaction rates. Are you using this for an investment model?

http://biz.yahoo.com/finance/97/10/10/gm_y0003_2.html

Family calls -- will check in this evening. Great day on Kitco!

http://biz.yahoo.com/finance/97/10/08/c_f_gm_y0_1.html

http://biz.yahoo.com/finance/97/10/08/gm_toyoy_1.html

GoldenCheeseHead: Thanks for offering some balance to this site! I'm impressed with Nietsche's comments on GOD. Didn't know he had it in him!

http://biz.yahoo.com/finance/97/10/09/toyoy_y00_1.html

To all: Re Donald's posts on auto production -- competition from SE Asia. What will happen when a 20%-30% cost advantage is factored to all those autos produced in SE Asia? Trouble in SE Asia will eventually come home to roost in the US. This will eventually hit earnings of US automakers, unless their foreign factories have the same cost savings.
We don't know the "when" or "how much" of what is coming, but we do know the "what".

http://nic.fb4.noaa.gov:80/products/analysis_monitoring/ensostuff/index.html

JTF--He didn't! Who I meant to credit with that quote but failed to proofread it before I clicked was IMMANUEL KANT of "Critique of Pure REASON" fame. Sorry for being such s dumbkopf!! Yet it's not WHO said it that counts but WHAT WAS SAID that makes the man who said it memorable! Appreciate your support to keep this forum from becoming a sounding board for personal predjudices posing as science, philosophy or
religion!

kiwi- I assume the prey is the single private investor. Who is the predator - the broker, and the mutual fund manager? Interesting, and good idea on how to get those cycles so neatly described by Dewey of "Center for Cycles Analysis" fame into a market model! I suspect you are way ahead of the academic economists. How about the Fed ( or Fed government ) versus the corporate world, or the average American -- who is predator and who is prey! Perhaps we have an entire food pyramid with the average citizen at the bottom. The mathematical model will tell no lies! What is the mathematical analog of a currency/economic collapse? A sudden loss of the food supply? Fascinating -- I wonder if we have enough time to model this -------.

kiwi: One more item -- one problem with general market models is that many of them are symmetrical -- the up takes as long as the down. Unfortunately, real markets are nonlinear, with sudden collapses after years of steady growth. I think you just hit on how to add the nonlinear element- with the nonlinear models of ecosystems! This is not something one can do with a spreadsheet program -- but Mathmatica might do it1 Maybe it's time for me to buy a computer program that can solve nonlinear differential equations! When I went to graduate school this was all done manually by high-powered theoreticians! Much simpler now!

From interview with Sally Katzen, Clinton Administration Y2K Problem
Ed Mulhall: Does that mean that there will be some perhaps less essential systems that will not be gotten to before the Year 2000? That only the most essential critical business systems will be definitely fixed? Is that an acceptable point of view?
Sally Katzen: Well I think I would be irresponsible if I assured you here and guaranteed that there would not be one slip up or one thing not done. No I do not want to be read as saying that. On the other hand, I don't want to simply latch onto the other end of the spectrum which says only the major majors will be fixed. The government is not monolithic. There are a number of agencies. Each one is addressing their higher priorities first. That they are not loosing sight of their medium priorities or even
their lesser priorities and my sense is that for most if not all of the agencies, most if not all of their systems will be Year 2000 compliant before the beginning of the millennium.

NOTE: It's all or nothing bet. If 5,10 or 20% of gevernment systems are non-compliant, we have a serious problem.

http://www.comlinks.com/people/isk117.htm

Golden Cheesehead: The quote was what matters! I think what this day shows is that we have a critical mass at Kitco -- one does not have to be right or wrong -- but one should try to contribute something useful to the knowledge base.
To all: For those of you who doubt ANOTHER's words - why don't you compare oil prices, gold prices, and the price of the dollar since 1975? You do not need to believe anything ANOTHER has said -- just look for yourself and tell us what you find. I don't know whether he is right that rising oil prices are damped by dropping gold prices, but it does make sense, and the model can be tested. I have seen for my own eyes ( and so have you ) that for the last year, gold and the US$ have gone in opposite directions! But gold has been steadily rising in terms of Swiss franks since early 1995.

Critics -- find the data to disprove or prove your premises!

Mr. CEO, your stock crashed today on the news that Wall Street Analysts warned of your Y2K exposure, and the brokers moved you from buy to sell, have you any comments?
"We were caught totally unaware..... I did not realize the implications...... 10K's.... is that an investment plan?.... I don't deal directly with the IT Department, that is ....er...er...I'll think of his
name....give me a minute... he deals with computers...You know I am totally computer illiterate"

I will bet, that before the end of 1999, we hear those words from one, if not several of the top CEO's as they face the music.At the same time I will be interviewing other CEO's about their successes.
Many companies will have completed all their software re-engineering, and will sail safely into the next millennium. They will be fitter than ever before. Have complete control over their IT resources and be more
efficient. It is early days to say who they will be. 1997 is still the Y2K "Honeymoon" period. All is quiet, rosy and very pleasant. Stock prices are climbing to dizzy new heights and life is wonderful.
Towards the end of this year and into the beginning of next, a change will take place. Disclosure of Y2K risks to shareholders and investors. Bean counters have to quantify exposure.
There will be statements that everything is on track, all is well and "I am assured by our IT Department that we will be compliant by the end of 1998." Auditors unsure of their ground will fail to qualify the
accounts of many companies. It will be the "Phony War".
Programs like "Countdown 2000" will start asking questions. The truthful companies will be "front and center", proud to show off their commitment, even sponsor discovery and discussion of Y2K.Then the rumor mill will start to become more vocal.Cracks will appear in the polished esentations of company prospectuses and financial statements. 60 Minutes will start calling. By the end of 1998 and into 1999, questions will be asked. "Why was this fact not disclosed in the audit.
Why did you not say you had not started recoding till the end of 1997, and you were advised it would take 4 years to complete. Surely your HR Department foresaw the staff shortage. Could you not have found
replacements, you knew it was coming?You lied to investors! Auditors, you covered up this fraudulent misrepresentation."
Due Diligence.
Have you thought about how the message is going to be put to the investors. How will a CEO and Officer of a company, explain away his actions when the feeding frenzy of the mainstream news networks catches up with him? They could be "everything possible had been done" --- would anyone listen. The year 2000 issue is a management decision, a business decision. It is not the fault of those long haired, bearded weirdoes who
play with computers, and you used to beat up in your schooldays.
Consider your planned actions if those darned bean-counters quantified the exposure to your company, and the brokers and analysts advised their clients to sell. They dumped all their holdings and now your
stock is down the toilet. You need to make sure you are ready to quell any panic selling, with the right message, delivered in plenty of time.
It could never happen to you? Hope not. I would sooner interview movie stars about their next blockbuster, and computer geniuses about their new invention, than collapsing companies.
You think it is a "Crock of Rose Fertilizer". Great, it's a free country. Love to interview you at the end of 1999. Can we make that a firm date?
Bet your main competitor will be sponsoring the show!
http://www.comlinks.com/mag/scw.htm

Are the U.S. markets closed Monday to observe Columbus Day? I can't find the holiday schedule. And I don't want to clean the 'Comm. Room'.

Anyone?

And Happy Thanksgiving Day in advance to all you Canuks...you guys eat turkey and cranberries??

away...to watch the Marlins kick-some-tail


shek: Re: y2k I work not far away from a Veteran's hospital ( ie, a long-term US gov't funded agency ) Those of you have been to one will agree with me that change does not come quickly, and there is little motivation to change if your work is relatively unsupervised. Did you know there is one individual who works for that VA whose sole duty is to count electrical outlets? You never know -- one might get away next year -- anything's possible! My point is that now matter how alert and oriented the high-level government types are, the system is not set up for testing for y2k. It is a certainty that somewhere the y2k changes will not be made, and it may not just be in the database of that electrical outlet counter!
Good thing I don't have a job like that, or I'd probably already have alzheimer's!

EB, US financial markets will be open tomorrow, EXCEPT: US Bond, Bill, ( interest rate futures ) markets.

Well, the Gulf od Arabia is churning. Would it not be interesting if Iran and/or Iraq decided to start something they cannot finish during a weekend between Yom Kippur and Columbus Day when the US gov't is closed?

RATIONAL INVESTING
...When asked why investors have shrugged off Greenspan, Steven Halpern, editor of Dick Davis Publishing, said that investors, many of whom have not experienced a major correction, are refusing to give weight to bearish pronouncements. ``You've got a market that only wants to go up. Good news is good news. Bad news is good news. No news is good news,'' Halpern told Reuters. ``People just want to know that their 20 percent annual gains are assured and that they're going to
retire soon very wealthy. They don't want to hear anything else.''
Marshall Acuff, portfolio strategist at Smith Barney, echoed Halpern's views about the Greenspan factor:
``People look back and say, Greenspan made similar comments in December and they caused weakness for a while, but then the market went higher. So the second time, it's presumably not going to have the same impact as the first.
``The first time it was a surprise, but now it's not that much of a surprise,'' Acuff said. Acuff said that Greenspan made his comments on the tightness of labor markets at a time no one was
expecting them, but then people also realize that at this time there is no real wage inflation.
``They've heard warnings from Greenspan in the past and the market went higher. That's the bottom line,'' said Acuff concluded.
In December of 1996, Greenspan made his now famous ``irrational exuberance'' comments. Many on Wall Street interpreted the Fed chief's comments as a hint that financial markets might be dangerously overvalued.
The move sent world stock and bond markets immediately into a tailspin, but they quickly recovered. Since then, the Dow Jones Industrial Average has climbed 26 percent.

JTF- the market value would be akin to the predator's population. As it feeds on the abundant prey ( private investor ) it's population increases at first slowly but then ultimately exponentially. Meanwhile the population of the prey is diminishing evermore rapidly ( we see more and more piling in ) . Finally or the new cycle begins when the prey supply is exhausted and the predator population can no longer be supported, i.e. it collapses catastrophically, and then the prey begins to rejuvenate and it begins all over again.
Yes, two non-linear coupled first order-differential-equations, nothing too complicated, but colourful enough that the behaivour is only quasi-periodic thus no t entirely predictable.

EB, I can never open your postings. Anyone else with that problem?

OK gents, Im back for a flash,,, Ive been away for a while, three or four months I guess. Things havent changed a great deal: CBs sill dumping, some tulip freaks and then last weeks Venezuelan shell game. Its not that Ive been sleeping, Ive been trying to make some sense out of the platinum dynamics for the past few months, but that issue for some other time.
WSJ has, for the last few months been taking sucker punches at the precious yellow for anyone careless enough not to be able to read between the lines. "The Security of Yesteryear" and "WHYBOTHER?". Well so and so and a to bit floozy, Ive only a bit to say on that. The US KEEPS 16  % OF HER NATIONAL ASSETS IN THE YELLOW STUFF, and shes not selling.
Now you can ride this fast game till the EMU is up on her wobbles, not that this is necessarily the correct word to use ( considering Deutschland is at the core of the maneuver ) but for the squeamish these are still a few chutes and ladders to scoot through before the fat lady sings. And oh when she sings, hang on to your cabesa hombres. I reckon there to be something of a econo-harmonic convergence in the makings here. A whole lot of consumer debt here in Amerika, a general lack of liquidity for Unkle Samuel when the EMU flexes her position, and some interesting revelations concerning the uses of gold in the electronic nanospheres, and shock-wave stratospheres: for communications and destruction.

Found another site for daily Gold Commentary at
http://www.usagold.com/Daily%20Quotes

Try full page. Or it will probably work now that I use my 'given' name. I can't read a few others sometimes when I use partial. It's a shame because the stuff I post is quite good ( Big-Wink-Smile-Thing )

away


Mathematica, Matlab or Maple will all do this with ease. I have some of my own Fortran 77 code that works but is not to user friendly. The real trick is estimating how much gullible investment money is out there. It's a little different to rabbit's grazing on a lettuce crop, but not quite the full blown fox-rabbit either. The prey has to be enticed into the predator's lair a little bit different from a hunt. Putting the romanticism aside it's just a matter of how you tweak the initial conditions and some of the constants but the curve is remarkbly similar...1929,1987,...

Bob: I am a FORMER subcriber to the Gartman Letter. I lost more than 60% on his recommendations over a period of three years. I suggest you don't follow his advice! Indeed I feel very confident in using Gartman as a CONTRARY INDICATOR!

C/Net on the myths and realities of the millennium bug: http://www.cnet.com/Content/Features/Dlife/Millbug/index.html

EB, works now.

A CHALLENGE TO GARTMAN: Gartman, since you DO monitor this site, I invite you to a challenge.

You will post on this site with your real e-mail adress and telephone number refuting what I have said AND.....

In return, I will reveal my e-mail address, regular address and phone number. I will then proceed to document the losses I have made following your advice. I will also recount the conversations I have had with you concerning your specific recommendations you gave me at those times.

You see, I have the documented proof that your investment advice has been a one way ticket to financial ruin!

All you have to do is to accept the challenge and refute the evidence I am prepared to post.

Let the challenge begin!

To y2k followers--Here is a countdown clock, in seconds, until the Year 2000. Go all the way to the bottom of the page. As of now, there are 70,003,700 seconds left. In one hour, there will be less than 70 million seconds left! http://www.refdesk.com/ It is also a great site for all kinds of info. I have this one bookmarked and use it daily.

A useful site on Australian exploration and mining companies with links to companies own websites such as Normandy ( if you don,t already know it ) :

www.reflections.com.au/MiningandExploration.

In particular for all you silver bugs and copper rhinos check out Anvil mining at the above site. Junior spec stock with good project at Diklushi in DR Congo

1.66million tonnes @ 11.1%CU and 310g/t silver. I wager that this is the worlds highest grade copper deposit albeit small. They also have 15,000 sqkm of exploration ground around it to make it grow.

At time of writing I have no Anvil mining stocks

P.S. How do you add active links?

Here's the chart.

Adjusted the channel chart to make room for the rest of the year.

This chart seems to be helpful in predicting the extent of moves, though moves hit the channel bottoms ( support ) more reliably than they do the channel tops. The recent breakouts of gold and silver stopped predictably at the new channel tops.

Also, notice that the drop in gold price last Thursday was barely noticeable in the London afternoon fix. I think others have commented that it seemed to be a local U.S. anomalie.

I haven't a clue where the channel top for palladium should be. I don't think the huge peaks we saw in the past should be used to predict the future channel width. Also, how long can palladium continue rising at a rate of 50% per year. Obviously not forever.

After staring at this chart for awhile, barring any major trauma, my best guess is that we will see a lot of boring sideways movement for the next month. Hope I'm wrong.

JTF: I had read somewhere that there is only about a 30 day food supply available at any time. Assumes no hoarding. The Russian miners have gone for months without pay, but obviously, not without food.

Donald....re yours of Sun Oct 12, 12: something. I also own and use CEF, what do you mean "I use CEFas a vehicle"? At 4.00 it is 5 or 6 percent dicount to book value.

Master Sun -- You forgot to append the http://
This is what makes the link, 'active'

6-pak ( Your Friday 18:30 ) - My Dad bought some Ballard at $26 and more at $31after it peaked around $35. He recommended I look at it both times, which I did. I liked it, but with my sterling foresight, I decided I would be able to pick it up in the low 20's after the general market correction. Of course it's now in the 60's, and is going out of sight. Sigh!!!

Bart makes it e-z. You must type in http:// and it will become a link. Much like when you type EB@something .

I was confused at first also...



Bernie: CEF NAV was 4.35 on Friday so it is 8.75% below NAV. I just mean that is how I purchase gold and silver. I don't want to take physical delivery and I am satisfied with the way CEF has set up storage and insurance. I take possession of the certificates and do not leave them in street name.

Panda - Your'e trigger was quicker. Ya' got me...UGH!

away...to die quietly



Not a rhino but an active lynx

http://www.reflections.com.au/MiningandExploration

Milhouse and NJ: What is Armstrong saying these days? Is he still expecting a bottom in gold in the 200s in 1998?

EB -- Don't go away to die! At least not alone, die in the arms of a babe! ( Attempt to seek comfort first before expiring though! ) :- ) )

This will get the PM market going! Au to mint coins! Oh, they need 2.5 tons of gold though... and some silver to... maybe they shouldn't of sold their gold????
http://biz.yahoo.com/finance/97/10/12/y0023_z00_3.html

http://www.phillynews.com:80/inquirer/97/Oct/12/business/SAFE12.htm

Donald....I too buy CEF instead of physical gold, but I do not put certs in my name. In a fast moving market I want to be able to move my assets. If you take certs out of street name how long does it take to sell if you must?

Lanman--
Excellent site you just posted @ www.usagold,com! Commentary confirms what George Cole and others here at Kitco have suspected. Funds are starting to cover their shorts and mining companies their hedges as comex warehouse supplies dwindle and surging foreign demand soars and CB's refrain from selling. If you haven't read Bill Buckler's latest commentary on the Front Page at www.privateer.com you'r missing some excellent information about the currency crisis in SE Asia and its importance to the US$ and US T-Bond! It's a must read for all at Kitco!

Lanman--
Excellent site you just posted @ www.usagold,com! Commentary confirms what George Cole and others here at Kitco have suspected. Funds are starting to cover their shorts and mining companies their hedges as comex warehouse supplies dwindle and surging foreign demand soars and CB's refrain from selling. If you haven't read Bill Buckler's latest commentary on the Front Page at www.privateer.com you'r missing some excellent information about the currency crisis in SE Asia and its importance to the US$ and US T-Bond! It's a must read for all at Kitco!

http://www.businessweek.com:80/bwdaily/dnflash/oct1997/nf71010a.htm

Japan down 205 ( 1.18% ) OZ and NZ down .6%

Donald:
Ian McAvity use to say the Nikkei 225 was going to break 17000 and once it breached that it was look out below - 14000 its next stop. Its been along time coming but he may have it right. He expected that this breach to set off tremors around the world including currency problems ( crisis ) in the US dollar.

The odds are 2 to 1 we have inflation not deflation. Labor is fed up to their eyeballs with stagnant wages. Greenspan is for big corporate America. After all wages declined for several years, but nobody paid any attention to that except for the working people. There is a shift taking place and corporations will just have to suck wind for awhile. In the mean time us working folks play catch up with big corporate America. Glad to see someone in congress is paying attention. Stocks down and inflation is back. Final inning for current business cycle.

Aussie all ords down 18 after 30 min.
Gold Index up 10.
Nick: Ive been thinking about Newcrest/Normandy/Tiger deal. Newcrest
might not have the gold it has forward sold and needed the money
to explore, t/o, or buy a big parcel of LHG. Its also tied in
with ERA. Uranium might be their new focus. Funny how Newcrest
bows out of Normandy just as LHG comes out of escrow.

Dundee: I just checked the 52 week low. It is 17019. Certainly within striking distance tonight.

Ian McAvity also said gold was going to $2800 and he may be right on both predictions. Its question of any of us being around to see the events occur.

GEPHARDT HAS IT RIGHT/ GORE IS BASICALLY ANTI WORKING CLASS! Go Gephardt US PREZ IN 2K hopefully if he keeps his agenda! If he loses a new pro working class movement will commence
without question considering the current BS that is going on.

WW your're right about Gore. Anyone that is his type of ecologist/environmentalist is definitly anti industrial in his beliefs

go go go go Gephardt. You got my vote all the way to the bank.

http://www.hongkong-window.com/shanghai/sstr/sst.html

As I usually do not use too much of bandwith here I would like to give my shares of bandwith
to ANOTHER,and repost his last five posts, ( and I hope he will not sue me ) .

ANOTHER is not just a dude.

I am proud with his choice of Kitco to express his THOUGHS.

By reading those five posts in a row we can feel this man knowledge.
This gentleman is among the most, if not The most interesting poster!
with Georges Cole, Arden,
Donald,Steve Puetz,RJ, JTF....Etc..

Post number ONE:
****************
Date: Sun Oct 05 1997 21:29
ANOTHER ( THOUGHTS! ) ID#60253:

Everyone knows where we have been. Lets
see where we are going!

It was once said that gold and oil can never
flow in the same direction. If the current price
of oil doesnt change soon we will no doubt
run out of gold.
This line of thinking is very real in the world
today but it is never discussed openly. You see
oil flow is the key to gold flow. It is the movement
of gold in the hidden background that has kept
oil at these low prices. Not military might, not a
strong US dollar, not political pressure, no it
was real gold. In very large amounts. Oil is the
only commodity in the world that was large enough
forgold to hide in. Noone could make the South
African / Asian connection when the question
was asked, how could LBMA do so many
gold deals and not impact the price. Thats
because oil is being partially used to pay for
gold! We are going to find out that the price
of gold, in terms of real money ( oil ) has gone
thru the roof over these last few years.
People wondered how the physical gold
market could be cornered when its
currency price wasnt rising and no
shortages were showing up? The CBs
were becoming the primary suppliers by
replacing openly held gold with CB
certificates. This action has helped keep gold
flowing during a time that trading would
have locked up.
( Gold has always been funny in that way.
So many people worldwide think of it as
money, it tends to dry up as the price rises. )
Westerners should not be too upset with
the CBs actions, they are buying you time!

So why has this played out this way?
In the real world some people know that
gold is real wealth no matter what currency
price is put on it. Around the world it is
traded in huge volumes that never show up
on bank statements, govt. stats., or trading
graph paper.

The Western governments needed to keep
the price of gold down so it could flow where
they needed it to flow. The key to free up
gold was simple. The Western
public will not hold an asset that going
nowhere, at least in currency terms. ( if one
can only see value in paper currency terms
then one cannot see value at all ) The
problem for the CBs was that the third
world has kept the gold market bought
up by working thru South Africa!
To avoid a spiking oil price the CBs
first freed up the publics gold thru the
issuance of various types of paper
future gold. As that selling dried up they did
the only thing they could, become primary
suppliers! And here we are today.
In the early 1990s oil went to $30++ for
reasons we all know. What isnt known
is that its price didnt drop that much. You
see the trading medium changed. Oil went
from $30++ to $19 + X amount of gold!
Today it costs $19 + XXX amount of gold!
Yes, gold has gone up and oil has stayed the
same in most eyes.
Now all govts. dont get gold for oil,
just a few. Thats all it takes. For now!
When everyone that has exchanged gold
for paper finds out its real price, in oil terms
they will try to get it back. The great scramble
that Big Trader understood may be very,
very close.
Now my friends you know where we are at
and with a little thought , where we are going.

Post number TWO:
***************

Date: Tue Oct 07 1997 22:37
ANOTHER ( THOUGHTS! ) ID#60253:

Why did LBMA go public?

Ever notice how many important middle
eastern people keep a residence in London.
Its not because of the climate. The most
powerful banks in the world today are the
ones that trade oil and gold. It is in the city
that the deals are done by people who
understand value! Westerners should be
happy that they do because the free flow
of oil and gold has allowed this economic
expansion to continue this past few years.
Understand that oil is still traded for a
certain number of US$ but after the deal
is done a certain amount of gold is also
purchased with the future flow of oil as
collateral. If the world price of gold gets
to high then the oil price is falling. So long
as gold stays cheap in currency terms oil
will be in good supply. Too hard to follow?
If real physical gold trading dries up its
price will rise forcing down the value
of oil. All this year physical gold
volume kept drying up as paper short
volume exploded. But,each time before
a squeeze started to run the price the CBs
would sell thru LBMA . You see, when
paper trading ( of anything ) volume dries
up its a bearish sign but when real physical
gold volume drops its bullish! Thats because
gold is being cornered on a scale never seen
in history. LBMA is doing its best to show
real volume exists! The problem is, if the
CBs dont expand their roll as primary
suppliers LBMA will implode and in
the process create the greatest bull market
in oil and gold the world has ever seen.
That is why some Big Traders are holding
ONLY gold as events unfold.
Interesting, dont you think?

Post number THREE:
******************

Date: Thu Oct 09 1997 19:00
ANOTHER ( THOUGHTS! ) ID#60253:

Gold is the only money the world has ever
known Sounds like a simple thought but
it isnt .

 Money is whatever people say it is
Not true!
Currency is whatever a government says
it is
True!
The LBMA problem
I can now make clear for all to see.

Background; to understand the following
you must rethink your basic knowledge
of money and investments. Get your aspirin
ready.
Some time ago gold not only was used as
money but also circulated as currency. It had
always been money and people had no use for
a separate currency to represent gold money
so they stamped the gold itself and used it as
circulating currency. From the start, one thing
most thinkers cant quite grasp is that money
does not have to circulate! The first world
money, gold money that is, could stay locked
up and still represent value and wealth. People
had but to agree on who owned it in exchange for
goods and services. You have all read the articles
about how paper receipts for gold money were
later circulated and became paper currency receipts,
then paper currency, then just currency.
The western world today, as we know it does
not use money ! They use paper currency. To
fully understand what that really means you must
come to terms with this fact.  When you use paper
currency you are placing a value using another persons
concept of value You are using a thought as a means
of value! When an investment in stocks, bonds,
bank accounts, CASH, businesses
etc. is priced in US$ currency you are really holding
the intentions of providing value locked away in
the thoughts of another mind.
This type of human interaction works well for a time,
as the last 100 years or so proves. But, it is highly
unstable to say the least. It has its own self distruct
code written inside each mind. One day ( it has already
started ) a type of nuclear chain reaction will occur in the
currency markets as people start unvalueing the
thoughts of others. Little by little all debts owed will be
marked down .
Now that we understand that concept lets move on:
One of the great money troubles facing the western
currency system today is that many third world people
are starting to put a mind value on real money, gold.
These people dont know the true value of gold money
but they know its worth a whole lot more than the world
paper currency price now placed on it. And that brings
us to the next problem; how can paper currency that
represents the thoughts of a nation blowing in the wind
be used to value real money of ancient world class
proportions, gold? It cannot! Any price you can think
of will do, as in no price will work!
How did we come to this unworkable mess?
The best way to rework the publics mind about
gold money was by changing the way it was viewed.
Its money of course but lets also call it a
commodity! Then we can place a paper value
on it and denominate it in all forms of future contracts.
It will lose its true value as money in peoples minds
and be priced in an unrealistic paper format.
And here we are today!
The banks must sell all the gold they have to keep
the system togeather. And once it is all sold and the
financial markets implode the nations will use
whatever force is necessary to pull the gold back
in! That action in and of itself would show the true
value of gold money!
What of the LBMA mess?
Gold is cornered. Plain and simple. No complicated
theories, no options problems. The commodity value
of gold was forced so low in paper currency terms
that all of the new mined gold, going out some 10
years is spoken for. Between the third world buying
physical gold and the jewelry industry ( same people
buying ) there is none left for the oil states! They do
value oil in terms of gold, but not IN the paper
currency price of gold! How much is gold
worth in terms of
oil value? Just stop supplying gold to them in ultra
cheep US$ terms and you will find out by watching
the currency price of oil! In any event, LBMA has
traded so much paper/oil/gold that any rise in the
currency price of gold will implode them. The CBs
must become the full primary suppliers of gold
or the system as we know it is done.
One last note: No form of paper wealth will survive
the financial crush once the CBs stop selling!
NOTHING!

Post number FOUR:
*****************

Date: Fri Oct 10 1997 17:26
ANOTHER ( THOUGHTS! ) ID#60253:

Yes, we could go into details about the LBMA mess.
But why? They are in way over their heads and
the final outcome is on its way.

A big change in the gold market actually started
last spring. You couldnt tell by the charts or news
stories but it had the CB trading rooms going nuts.
Up untill then they were using 3rd party transactions
to sell, then the boomshell hit that the Merchant
Banks were doing deals for 10 to 20 times what was
offered! Well boys will be boys and someone is
now stuck, big time! Thats why Big Trader and his
bunch closed out all paper and pulled in bullion.
Dont worry about the CBs selling everything, the
market is huge compared TO WHAT THEY HAVE!
And
Comex is nothing, if only a silly game. Worldwide
trading in gold could be cut in half and still equal all
the metal in existance!
The CBs will have to sell outright now even as the
currency price of gold starts to run away from them!

The market is changing now,,, it will go up but you
will not be happy with the outcome.


Post number FIVE:
*****************

Date: Sun Oct 12 1997 10:42
ANOTHER ( THOUGHTS! ) ID#60253:

How DO they do it?

Its more complicated than this but here is a
close explanation. In the beginning the CBs
didnt sell their own gold. They ( thru third
party ) found someone else who had bullion.
That party sold to a broker who sold
forward for a mine or speculator or
government ) . In the end the 3rd party had
the backing from the broker that he had
backing from the CB to supply physical if
needed to put out a fire. The CB held a
very private note from the broker as
insurance and was paid a small fee. This
process mobilized free standing bullion
outside the government stockpiles. The
world currency gold price was kept down
as large existing physical stockpiles were
replaced by notes of future delivery from
the merchant banks ( and anyone else who
wanted to play ) .
This whole game was not lost on some
very large buyers WHO WANTED GOLD
BUT DIDNT WANT ITS MOVEMENT
TO BE SEEN! Why not move a little closer
to the action by offering cash directly to the
broker/bank ( to be lent out ) in return for a
future gold note that was indirectly backed
by the CBs. That paper gold was just like
gold in the bank. The CBs liked it because
noone had to move gold and it took BIG
buying power off the market that would
have gunned the price! It also worked well
as a vehicle to cycle oil wealth for gold
as a complete paper deal.
Are you with me?
Well a funny thing happened right after
the Gulf war ended. What looked like big
money before turned out to be little money
as some HK people, Ill call them Big Trader
for short, moved in and started buying all
the notes and physical the market offered.
The rub was that they only bought low,
and lower and cheaper. They never ran
the price and they never ran out of money.
Seeing this, some people ( middle east ) started
to exchange their existing paper gold for
the real stuff. From that time, early 1997
LBMA was running full speed just to stay
in one spot! In other words paper volume
had to increase to the physical volume
on a worldwide scale, and that was going
to be one hell of a jump. It could not be
hidden from the news any longer.
This was not far from the time that
Big Trader said that if gold drops
below $370 the world would see
trading volume like never before seen.
The rest is history. Now the CBs will
have to sell 1/3 to 1/2 of their gold just
to cover whats out there. To use the
Queens English it aint gona happen
dude!

Everything is now upside down and
reversed. The more the CBs sell
outright the more the price will rise.
Its not a bearish sign anymore. They
will now sell to keep the price rising
slowly.
What of those T-bonds and the US$?
More later.

IDT :

Yes and no. Here is what he says.

Short -Term.
Although gold broke out to the upside, we must see a close over 343.1 and 345.1 to suggest a shift in the intermediate-term trend. For now, as long as 323.0 holds, gold will be in a position to recover and rally again.

Long-Term
If gold falls into the 275-225 range by 1988, then bull market into 1993 will be assured to break all records. For now, major resistance is at 335-336 followed by 341-345.Only a weekly closing above 345.1 will suggest a sustainable rally is possible.

He goes on to say that July closing below 325.2 signals a bearish trend still in motion and a weekly closing below 313 will warn that a crack below 300 is not far behind.

Oliver- Thanks for reposting the thoughts from ANOTHER. Those thoughts make a lot of sense of this market.

Tally Ho

Donald, anyone: Do you know the asset value per share of Central Fund of Canada? Please post.

Now I know the EBN 'quote' is correct, but their math is off! So is the direction... :- )

Another + Big Trader = guano

Donald: saw your post that NAV $4.35/share - thanks. How do you get update for this value? Is CEF open or closed end? Thanks

sig -- Remember, the Internet does have entertainment value also. :- )

Amnesty-- I hadn't thought of the Lihir coming out of escrow angle. I think Newcrest is going to be sorry they got rid of their Normandy stake ( unless they put the $$$ into something like Lihir ) . Look at what is happening to the price of Normandy now that the Newcrest parcel isn't hanging over their heads!! With listing in Toronto and Montreal coming up--any rise in the price of gold and Normandy should rocket!!

To all

Anyone know the Lega Dembi Gold mine?
Well it's Ethiopia's only operating gold mine ( it was state run and loss making ) with an in-situ reserve of 1.6 million oz and apx 700,000oz. It was recently purchased by a Saudi Arabian financier, Sheikh Mohamed Hussein Al Amoudi for $175 million. A lot of other companies had tendered for this mine JCI, AGC, Cannyon, and about 8 others.

I thought the purchase was all a little odd, the price was a little high especially when the sentiments at the time amongst a lot of miners was that price would not recover for about two years. More importantly Arabians have not been noted for many if any investments in gold mines or gold exploration. There is very little active gold exploitation or exploration in Saudi considering the countries potential is quite high.

But now things seem a little clearer in the light of Another. Lega Dembi is 300 miles from the Red Sea very close to the Arabian penisular and of course you would be willing to pay top dollar ( compare to purchases of other state run mines through out Africa ) if you were expecting a hike in gold price. Very interesting and in the light of the Thoughts of Another not so odd.

check it for ya selves
http://www.ethio.com/Ethiopia-News/071911997

P.S. Anybody know who Sheikh Mohamed Hussein Al Amoudi is or what else he has been involved in?

sig -- Maybe "Another" is a Goldman Sachs boy setting us up for another 'sell'. Just 'another' paranoid thought...

Half way through the OZ trading day-- 12:22pm.

All Ords DOWN 25.6 to 2668.9 ( -.97% )
Gold Index UP 11.3 to 1336.4 ( + .85% )

Sleep well Northerners-- "...the world is unfolding as it should."

SIG, another + big trader = dogduty and then some. He sure has casted his spell on the others though.

Does anyone have a site address for to monitor all the world markets. Especialy South Africa's all Gold index? Lost my Bookmarks :- (

NJ--didn't 1988 and 1993 already happen?--I think my train of thought got derailed here. What about silver? Thanks.

Oliver: Thanks for putting ANOTHER's posts all in one. I know better than to believe everything I read on the internet, but ANOTHER's posts are captivating. Some if what he says I know is inconsistent, but there is the ring of truth in it, given what I know about human nature, and the desire to control. Those who doubt that a powerful group could control the price of gold can look up that fascinating episode when the Hunt brothers nearly cornered the Silver markets ( 1980 ) .
What everyone should do who reads these posts is try to find the consistencies/patterns and use them to come up with a tentative model. Then what one needs to do is come up with data, either current or historical. Compare 1975 to current prices of gold, US$,oil, interest rates to see if there is a correlation. I hope to have time to do this, and expect a 3-6 month correlation period should be about right. All one needs to do in my interpretion, is see if there is an inverse relation between the dollar and gold prices, and if there is a tendency for gold to go down when oil prices are moving up. Treasury buying when gold is going down -- that I'm not sure about, and am waiting for ANOTHER to give more clues. If ANOTHER is correct about the urgency of the events he describes, we may have current information to fill out databases. For example, if the dollar drops, and gold rises, this suggests that US treasuries are not being bought, and ( I think ) new gold loans were not created. IF the dollar drops, and US treasuries are being bought in large quantities somewhat later to boost the dollar, this could be due to new gold loans, and gold would drop in price.
I am not a derivative trader, or a gold loan expert, so I don't know if what I said is fully accurate. However, I am convinced someone is manipulating gold in a massive manner. Actual Central bank sales, and gold production numbers are just a drop in the bucket compared to what is unofficially going on. Perhaps someone at this site knows enough about derivatives trading to fully decipher all of this for the rest of us.

PETER---- http://quote.yahoo.com/m2?u

cheers, Nick

Thanks Nick !!

Panda: Question for you -- if ANOTHER is giving us disinformation, why does he give it in riddles so that there is no way to determine timing?
If he gives a specific time for something to happen, and it doesn't, that would be an effective way to lead us in the wrong direction, and then fleece us. If there is no specific time factor, all we can do is wait anyway, and watch. I see nothing to lose, since gold probably won't be in a convincing bull market until the effective ECU Jan 1988 deadline.
By the way what is your explanation of why the dollar and gold have been going in opposite directions, but the value of gold in Swiss franks has bottomed mid 1995. Are you going to tell me that the US$ is doing this entirely on its own, without outside help? I know Switzerland has been inflating their currency to jump-start their economy, but I don't think that's enough to explain what's happening.

Thought this information might be of interest to the group especially to Donald and JLB. I uncovered a book called "The Derivatives Revolution" by Jessica Cross- published by the Rosendale Press. This book goes into great detail on the Gold Markets and the use of derivatives in this market. The author discusses gold loans, forward selling by the producers, gold backed bonds, and overall hedging in the Gold market. Provide below are some of the interesting charts and information collected in the research of this book:


---------------------------------------------------------Net
-----------------------------------------Draw Down-------Outstanding
-------------------New---------Known-----Less------------Loans
--------No.Of------DrawDowns---PayBack---Pay Backs-------Cumulative
Year----New Loans--Tons--------Tons------Tons------------Tons

1981-----1.0--------0.5--------0.0--------0.5
1982-----1.0--------0.4--------0.1--------0.3-------------0.8
1983-----0.0--------0.0--------0.1------ ( 0.1 ) ------------0.7
1984-----4.0--------3.4--------0.1--------3.3-------------4.0
1985----20.0-------39.2--------1.0-------38.2------------42.2
1986----13.0-------23.9--------6.0-------17.9------------60.0
1987----37.0-------72.9-------14.8-------58.1-------------0.0
1988----92.0------181.2-------23.8------157.4-----------157.4
1989----58.0------164.3-------65.2-------99.1-----------256.5
1990----22.0------101.3-------85.2-------16.1-----------272.6
1991-----4.0-------29.5-------97.6------ ( 68.1 ) ----------204.5
1992-----1.0--------1.5------114.6----- ( 113.1 ) -----------91.4
1993-----0.0--------0.0-------65.0------ ( 65.0 ) -----------26.4
1994-----0.0--------0.0-------58.2------ ( 58.2}---------- ( 31.8 )


The author states that this is a chronological distribution of the gold loan industry covering the period 1981-1994. It appears that this table was arrived at through research and data base work undertaken over a period of several years. She indicated that the loan details are confidential and that the loan activity centered in Australia, Canada, and the United States. She also points out that there are outstanding loans in Indonesia, Papua, New Guinea, Brazil, Chile, Spain, and New Zealand.

There is also a graph of gold borrowing costs versus gold price. Maybe some one can assist me in how to scan it and post it.

MASTER SUN: The highest grade copper deposits are in my native Cuba. The ore from the Sierra del Cobre ( Copper Mountains ) yields 50%+ metal content. Someday it'll help Cuba rise again. NICK: Thanks for the Aussie market update. Was just tuning in to get the numbers.

Donald: re your 19:51 post. Given our new approach to "just in time deliveries" 30 day food supply sounds right. In the US, I would hope that we have a longer supply of food -- in raw form. Best crops ever this year, I gather. If your question is about Russia, this is more serious. The El Nino seems to be hitting that part of the world much harder, and there was a message some days ago that said the Red Cross was concerned about winter famines in Russia. Perhaps not just the Russian miners are underpaid -- how about their food delivery system? I'm worried that we may be approaching a crisis in Russia, given Yeltsin's sudden anti American about face.

THE ASIAN IMPLOSION IS ENTERING INTO ITS DEATH SPIRAL AS I WRITE THIS! THE NIKKEI IS CRASHING THROUGH ITS 17300 support and HONG KONG is ABOUT TO CRASH THROUGH 14,000. LOOK OUT BELOW FOR ALL STOCK MARKETS TOMORROW!! GOLD UP $1.00 and SILVER up $0.03. THIS COULD BE WHY ANOTHER FELT COMPELLED TO BEGIN HIS POSTS HERE AT KITCO NOW! THIS COULD ALSO BE WHY GREENSPAN IS ASKING TO MEET WITH CONGRESS ON OCT.28. THINGS ARE GETTING OUT OF CONTROL--FAST!!!THIS COULD REALLY GET UGLY!! BE CAREFUL!! AND BUY GOLD!!

Hong Kong
Hang Seng
^HSI
11:41PM
14070.44
-202.68
-1.42%
India
BSE 30
^BSESN
Oct 10
4057.37
0.00
0.00%
Indonesia
Jakarta Composite
^JKSE
11:42PM
530.178
-4.574
-0.86%
Japan
Nikkei 225
^N225
11:42PM
17160.74
-216.18
-1.24%
Malaysia
KLSE Composite
^KLSE
11:41PM
829.99
-4.02
-0.48%
New Zealand
NZSE 40
^NZ40C
11:10PM
2592.10
-9.93
-0.38%
Pakistan
Karachi 100
^KSE
Oct 10
1884.32
0.00
0.00%
Singapore
Straits Times
^SS1
11:36PM
1888.54
-12.70
-0.67%
South Korea
Seoul Composite
^KS11
10:31PM
614.52
-5.71
-0.92%

questor: re- your post on "The Derivatives Revolution" Could you also give me the year published, and anything pertinent said about the author? Although your table is ( I think ) about straight-forward gold selling by producers, it sounds like the book might have more in it. Anything about high volume gold derivatives trading, or anything about the LBMA, or LME? Gold backed bonds sounds suspiciously like what ANOTHER is referring to.
I'm going to try to get this book myself. As per posting graphs, if you can get the tables, graphs into *.gif form ( or others ) they can be uploaded to Kitco.
All you need to do is scroll down while you are on the posting page, and click on "send the file to us", the other steps are self explanatory. Once you have the file uploaded, click on "click here" so see what you called it ( case matters ) so that you can type the file name in the rectangular box "specify full filename here". Finally, when you post your written message, you will find the image icon attached. It does work well.

the sky is falling the sky is falling the sky is falling

Zip program at
http://www.winzip.com/

Dundee: I don't know where WPL is going, but I see it has had a beautiful run of almost 400% in last 4 years. My comment was based on the position that there was $1.3m of puts taken up on friday. What do these people think?

Randy: Your story reminds me of the fellow who wanted a drink. So he goes to the pub but can't get near the bar for the crowd. He then goes outside and shouts "GOLD'S been found at the river." Imediately the whole crowd deserts the bar heading for the gold find.
This fine fellow then runs after them all, wanting some gold of his own, forgetting his thirst.