Gold Discussion for Investors and Market Analysts

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Mike Sheller
(Wed Oct 15 1997 00:06 - ID#347447)
And furthermore
JTF: In an inflationary paradigm, the most important question to be asked is WHO BENEFITS FROM THE INFLATION. An inflation is engineered TO benefit some group, class, or interest. I submit that the current leg of our continued worldwide fiat currency and credit expansion is an inter account game played between central banks of the world. That is why gold has become caught up in the play, and why the inflation has not emerged ( yet ) to the level of the ordinary citizen, or even the middle level executive. Top level executives, as a class, however, are benefitting enormously. But the greatest beneficiaries of all are central banks and national treasuries. They are using the unending and prolific new issue to patch the leaking tubs of each other's debt ridden, inefficient and criminal profligacy. What was done for the American banking system in the early 1990's by Greenspan has been exported around the world.
But as in any game of musical chairs, or any Ponzi scheme, there will be losers. The weak will lose, as is evident in Asia today. It is not George Soros, or any "speculators" who are devastating the curriences of the Asian nations. It is their own governments, and the goverments of the other nations of the world. Either all this new money will be extinguished in a cataclysmic currency implosion, or it will find its way from class to class eventually. In ANY event, the future is one of rampant devaluation of currency. The next class to receive the value of this money will be the gold-buying class. Then the general financial class will join the gold-buying class. Then the general public will come in toward the end of the cycle. Nothing changes. Only the names of the players. The dream goes on.

(Wed Oct 15 1997 00:07 - ID#431263)

(Wed Oct 15 1997 00:10 - ID#335190)
Canadian Myron Scholes @ Nobel in Economics (Derivatives estimated @ $55 trillion)
October 14, 1997
Nobel laureate says options model began as "a curiosity"

STANFORD, Calif. ( Reuters ) - Myron Scholes, who shared the 1997 Alfred Nobel memorial prize in Economics Tuesday, said he and his colleague Fischer Black first began studying options pricing models simply as "a curiosity."

The result of their work, the Black-Scholes options pricing formula first published in the Journal of Political Economy in 1973, has since revolutionized how corporations and financial institutions value financial risk. It has also spawned a global derivatives market estimated to be worth up to $55 trillion.

What the two scholars achieved was to establish a method of valuing derivatives, synthetic financial instruments whose worth is linked to an underlying asset such as a stock or a commodity, in a way that could be traded by intermediaries.

"Once we started thinking about options, we realized options were embedded in everything and then we got worried when we started seeing about options everywhere, even where we weren't supposed to see them," he said.

Traders at the world's first options exchange, established in Chicago around the time of the 1973 publication, began using Black-Scholes as a basis for trading. Texas Instruments even advertised a calculator that could compute the formula.

Still, Scholes said there have been rough patches in evangelizing sophisticated methods of risk management, such as the 1987 stock market crash, which some business media blamed on portfolio insurance and on Black-Scholes calculations.

"It was hard to come home to my kids...and say 'I just caused the crash'," he said to laughter at the news conference. He added that academic research since the crash, 10 years ago this week, has been inconclusive on the role of derivatives. And since then, there have been the notorious derivatives losses of Orange County, Calif., and German commodity giant Metallgesellschaft AG, which promoters of derivatives have blamed on the misuse and misunderstanding of hedging methods.

"I think there's still learning to be had," said Scholes, who credits the expansion of technology to help investors and financial analysts use the model with preventing more mishaps.

The Black-Scholes formula has endured despite what Black described in a 1989 academic article as drawbacks from the fact it depends on "at least 10 unrealistic assumptions."

To price complex options, the model assumes conditions that rarely exist, such as that short-term interest rates never change, that a stock pays no dividends, that stock prices never jump up or down suddenly or that there are no events like takeovers that can shorten an option's life.
Nevertheless, the formula and variants based on it remains the most heavily used by option traders, investment bankers and financial managers around the world.

(Wed Oct 15 1997 00:19 - ID#431263)

(Wed Oct 15 1997 00:20 - ID#255151)
@ Home

EBN has Hang Seng down 511 or 3.7%! Nikkei just slipped into negative territory. Time for the "rescue team"?

(Wed Oct 15 1997 00:24 - ID#411259)
..... Quickies .....

Douglas Jackson ( ) ID#261102: @ 16:27
Thanks for the commercial Dougy, been selling' long? All I know is if the price rises, I'll be head saying "E- gad, gold! OOOOOOOPPPPS, trademark infringement! Lighten up pal, let's see, how did you put it? You, "can not permit it to become generic terminology." Waddaya' gonna do? Your post has to be one of the most absurd messages I have ever seen on this group. If you are a regular reader, you will know how strong an indictment that is.

You keep changing the date, sooner or later you may be right. You never did answer my question from a few weeks ago: Which eclipse, of the 12 of 13 per year, is going to precipitate you vaunted crash?

No company I know of will pay more than spot for bullion coins in normal markets. When there are shortages of a particular metal, as it was with platinum this summer, you will find some companies willing to pay over spot, but that is the exception, not the rule. Like all things, this individual has to pay, while big companies get the little extra gravy. That's the way the world works.

(Wed Oct 15 1997 00:30 - ID#2082)
Bad news TA
EB's TA looks bad for gold tomorrow... there is an ominous looking ( small ) descending triangle formed. And from the looks of it 'they' will wait for US market to 'bring it down'. My ( put ) spreads are still in place and I WILL make some money tomorrow or Poorboys ( i think it was you ) can serve me up some of that delicious crow he's making. C'mon you mellow-yellow, make poppa proud!

Eldo - you take those profits on corn?!?

Irvine-Boy - ????

Bip Roberts - GO man GO!

JTF - Your wife called me and said she thinks you're KITCO! ANd the 'honey-do's' weren't gettin' done. What should I tell her ;- )

MikeS - I was getting MikeS withdrawls. Thanks for posting a few words...don't leave us like that. Leave us your pager # just in case. Oh SageDudeOfGreatness!

Cheech & Chong - Having fun 2-nite?

DJ - Gonna need some study time...

Puetz - Welcome back... Crash and Burn?!? Are you gonna post only when the moon is full?? What would Warren Zevon say?? And haven't I seen you at Trader Nick's? the charts...they don't lie...eventually...

(Wed Oct 15 1997 00:32 - ID#335190)
Mutual Funds @ Ontario Securities Commission = Lack of Controls via 2 yr. audit report
Wednesday, October 15, 1997
Fund sellers in hot seat

Ontario Securities Commission uncovers unsettling lack of procedures and controls

Mutual Funds Reporter The Financial Post
An audit of mutual fund dealers by the Ontario Securities Commission has revealed widespread regulatory abuses, including poor supervision of salespeople and failure to keep client funds in trust accounts. These findings are contained in an unpublished report by the OSC, which has audited 23 fund distributors in the past two years. Most of the firms sell primarily mutual funds and are not licensed to sell other securities.

In some cases, the commission uncovered violations that are serious enough to be further investigated by the regulator's enforcement branch. Ultimately, civil charges may be laid.

Looking into suitability of investments, the commission uncovered some disturbing encouragement of leveraging -- when a client borrows money to invest. "We found several instances where leveraged purchases [were] clearly not suitable, given the clients' financial circumstances,"
Ferrari said. She noted that every company is required to have written procedures for salespeople setting out when leveraging is appropriate.

(Wed Oct 15 1997 00:32 - ID#252312)
@Home - time to retire----
Mike Sheller: Your post of 23:25. My sentiments as well. Our AG has inherited an anchorless monetary system that will eventually collapse, just as the British pound collapsed in the 1930's. Use of the US dollar effectively as the World's currency is a bad idea indeed. Just worsens the inflationary trend. Does he hope the the ECU/EMU will take over? How about electronic gold?
Your suggestion that he resign is an interesting one. Surely he must know the outcome of the nearly runaway worldwide derivatives trading. Does he really want to be at the Helm when everything melts down? If he doesn't resign, does that mean that he thinks he can delay the currency crash to the year 2000, or more? Of course, one must never underestimate the strength of the US economy to withstand the economic abuse that began when the national budget was no longer ( on average ) balanced. To his credit, AG has asked for federal budget counts. As I recall, the English economy went for many years in the same manner, before the Pound collapsed. It was replaced by the dollar as the world currency.

(Wed Oct 15 1997 00:39 - ID#431263)

(Wed Oct 15 1997 00:49 - ID#57232)
Mike Sheller:Couldn't resist resist responding to your post on why inflation. As someone one said, "absolute power corrupts absolutely". What do you expect from the banking institution as a whole over the last 75 years or so, if they have the power to regulate the money supply. The temptation to personally benefit from that power will eventually prevail. I think Thomas Jefferson had some comments about the power of the large banks as well. As they say, don't "choose the fox to watch the henhouse".
I must admit I'm stymied on this one, because there is something worse than our current banking system in the US, and that would be if our own federal government controlled it directly. Interest rates would always be low, and inflation high. Our Federal Reserve system has major drawbacks, but removing its independence from our elected officials would be a disaster of biblical proportions. One other thing we shouldn't forget is that AG is probably our most competent Reserve chairman we have ever had, and I rue the day he resigns, because our next chairman is likely to be at the helm when our dollar crashes!

Peter (born loser)
(Wed Oct 15 1997 01:01 - ID#15658)
* Peter ( born loser ) - INTEL is a market internal. Themarkets move on
* just Intel rumors. Pentium chips are just a commodity now. Ever body
* and his brother are making chips - Asia. IBM, Motorolla, Apple's
* Power *PC chip is better especially with the new COPPER technology.
* Apple should be up tomorrow along with COPPER.

Thanks HighRise. I don't follow the US at all closely, but I did see something about Intel disappointment. With Intel counting as a "market internal" as you point out, I guess you're saying that this disappointment counts towards George Cole's "start of market internals collapsing", which he says is not yet happening much.
Regarding what you say about Pentiums being just a commodity now, I wonder how much this is realised in the market for Intel shares. Is the recent disappointment in Intel figures just the start of this percolating through: is there much more of this "just commodity" effect for the market to wake up to?
But anyway, I guess the big looked-for downturn will not be about just Intel, nor even about just technology. I wonder how other "market internals" are looking.
In case you wonder where I'm coming from, I'm just a very very small bit-player who's somewhat long gold-stock mutuals, and long the general UK stock market but, despite not knowing the US at all, might still be tempted by OEX puts some time ... . Best wishes,
Peter ( bl )

(Wed Oct 15 1997 01:01 - ID#251165)
Tuesday, Crude: Prices slip below $20 a barrel


By Robert Corzine, Kenneth Gooding and Gary Mead in London and Nikki Tait in Chicago Crude oil prices slipped below the important $20 a barrel level in late trading yesterday on London's International Petroleum Exchange. Brent Blend for November delivery, the international bellwether, was quoted at $19.85 a barrel in late trading, down 29 cents from Monday's close. Yesterday's weakness came after oil prices suffered a sharp sell-off on Monday, when the November Brent contract closed 59 cents lower. Only last week crude oil prices had reached nine-month highs as a result of speculative buying and concerns about the Middle East.Some reports attributed much of yesterday's weakness to selling programmes being activated on the New York Mercantile Exchange. Analysts said that now political tension in the Gulf seemed to be easing, attention would turn to the weather. "The rain in Germany and the emergence of cold weather could give a boost to European product demand," said Charles Gray at brokers Prudential Bache in London.

On the London Metal Exchange copper for three-month delivery rose $28 a tonne to $2,111, helped by another fall in LME stocks of 3,575 tonnes to 337,900 tonnes this week.

Most of the 2,075 tonnes reported to have been withdrawn on Tuesday left Singapore warehouses, suggesting long-awaited Chinese buying might have started.

However, Jim Lennon, analyst at Australian bank Macquarie, said it was more likely the metal was for other Asian customers following a postponement of shipments from Chile.

Three-month nickel prices fell by $60 to $6,445 a tonne. The bearish mood was sustained when a director at Norilsk, the big Russian producer, denied Monday's news agency report that it had shut down some nickel and copper production.

Zinc gained $7 a tonne to $1,319, but largely ignored news of a strike at three of Asarco's mines in Tennessee, which produce about 60,000 tonnes of zinc a year.

"If it had been refined metal it would have made more of an impact on the market," suggested William Adams, analyst at Rudolf Wolff. Last week 320 employers at the Coy, Immel and Young mines in Tennessee voted against a proposed three-year labour contract.

In a statement, Asarco said that it held meetings with the International Chemical Workers Union, which is representing the striking workers, on Monday and planned to meet again yesterday in an effort to resolve the issues. The mines are situated near Knoxville.

Cocoa prices fell on the London International Financial Futures Exchange in relatively active trading of 6,770 lots. The December cocoa future closed 21 lower at 1,100 a tonne.

The pattern was similar on New York's Coffee, Sugar and Cocoa Exchange, where the December contract was $31 down in early trading, at $1,646 a tonne. Dealers are still awaiting firm news about Ivory Coast's eventual crop, but reports that West African rainfall now looks sufficient to produce good crops appears to have helped the market decide to take a more bearish view.

(Wed Oct 15 1997 01:12 - ID#288275)
to RJ
RJ: Re your 00:24 posting..
Man, my respect for you has just gone *way* down ( unless it was an imposter posting, that is. Just didn't sound like you ) .
Your dissing of the e-gold man shows major ignorance of Trade Marks and their usage.
His comments may be lame, but he has to make such a comment, since if the use of the trade-marked symbol goes unchallenged, it becomes public domain after a certain period. He *must* make a statement like that, unenforceable, lame, or otherwise, in order to demonstrate that the usage has not gone unchallenged, and that he is therefore still entitled to claim e-gold ( TM ) as a registered TM. He does not need your approval of these statements, either!! ( Still think that posting must have been an imposter, too abrasive for your regular style, even though your views are often contrary to mine, you are still a "good guy" in my books - just back off that e-gold comment - if it was not an imposter.. ramble, ramble, ramble..... : )

(Wed Oct 15 1997 01:16 - ID#431263)
AG and AU now awake and ready to rock! Following the lead of their Pal Palladium as the PLAT thickens! AG UP 4 cents! Au UP 20 cents! Palladium UP $19.50! Platinum UP $2.40! ASIA DOWN, UNDER AND OUT!

(Wed Oct 15 1997 01:26 - ID#335190)
Change !!!! @ JTF, would rather complain !!!!,
Date: Wed Oct 15 1997 00:32
JTF ( @Home - time to retire---- ) ID#252312:

**Our Federal Reserve system has major drawbacks, but removing its independence from our elected officials would be a disaster of biblical proportions.**

JTF: that statement is exactly the reason, that the system will come down. I had expected that that statement would have been stated by others, yet it came from you. Most interesting. Education presents a fear, unless you are held by the hand. Great men were not educated, they were intelligent.

Free Markets, and democracy is based on TRANSPARENCY, Brutal consequence, of error and omission, as per an investor. You obviously want your cake and eat it. I am sorry that you fear change. Your statement, only serves to prove, people are sheep. You demand, more Government eh! because of FEAR.
"Biblical Proportions"
**Be quiet...Consume....and die**
**I can Hire half the working class, to kill the other half.**

(Wed Oct 15 1997 01:44 - ID#255285)
Mike Sheller Fine Speach this am

(Wed Oct 15 1997 01:44 - ID#17155)
Japanese Stocks
The Nikkei is falling again ( ~17200 now ) . I seem to remember some analysis that indicated that move below 17000 would trigger a massive bank failure. Any details on that?

Future Man
(Wed Oct 15 1997 01:51 - ID#340214)
tisk, tisk tisk...

RJ - What little imagination
salemen of your stature have! ( Did you say used cars or coins? )

Any way, just visited Kitco Discussion Group January of next year - guess what grease ball- you quit posting after gold soared earlier in the month! You loose it all, chump!

(Wed Oct 15 1997 01:55 - ID#373163)

(Wed Oct 15 1997 01:58 - ID#343190)

(Wed Oct 15 1997 02:02 - ID#335190)
China buying @ USofA visit
October 15, 1997
China to send mission to buy U.S. goods

BEIJING, Oct 15 ( Reuters ) - China is sending a mission to the United States to buy billions of dollars of goods to reduce its bulging trade surplus, just days before a Sino-American summit, a Chinese official said on Wednesday.

The mission was due to leave on Sunday and return at the end of the month, said a member of the buying team who asked not to be identified.
On Tuesday China announced President Jiang Zemin would visit the United States from October 26 to November 2.

"We plan to buy aircraft, grain, fertiliser and car parts," the mission member told Reuters.

(Wed Oct 15 1997 02:05 - ID#411259)
..... Hi. I'm RJ, and I'm a

Hi RJ.... Hi there....... hey rj.......welcome..............

(Wed Oct 15 1997 02:12 - ID#357246)
Gold at 310 in the next 2 weeks.
Hey sorry guys
I can see the future
but I can"t change it.

(Wed Oct 15 1997 02:16 - ID#357246)

Gold at 310 within next two weeks.

(Wed Oct 15 1997 02:46 - ID#255285)
who will play with me?
Gertrude, OK, it's really quiet here right now, how come you know "Gold at 310 in the next 2 weeks" this is arrived at how??

Nicks, Aussies, JIN, and all awake right now, Kia Ora from New Zealand.
Nick@Aussie ( you the big Nick, covering all aussie? ;-] ) have especially appreciated your posts recently.

When the news has religous leanings, ie. my 'uns better than your 'un, and your 'uns hurt us 'uns....goldbugs should


soo precious...

(Wed Oct 15 1997 03:22 - ID#310407)
Puetz, re your 19:45 predicting new crash starting tomorrow on full moon, for once I'm simply speechless! just too many openings for fun here, I gotta pass!!!

(Wed Oct 15 1997 03:23 - ID#255151)
Generically Copyrighted 

Howdy aurator! The Cap'n at The Privateer refers to Phase 2 of the SE Asian economic crisis. Hang Seng has been dropping steeply of late. Any thoughts on the "economic weather" just ahead?

(Wed Oct 15 1997 03:24 - ID#255285)
@ redback in the dunnie
Steve @ Perth, thank you for your 22:40 last night. Some time ago I asked the question about the strategically important ( and thoroughly unprepared ) --- Darwin.

While I was aware of the oil fields and the disputes, it is v relevant, ( in my 'umble ornithological opinion ) that it is mentioned now.

Oil resources are strategically important, in the event of war with the strait of Malacca being inevitably blockaded, not only are the additional sea passages around the Timor Sea of ultimate importance, but the seas themselves are rich in oil.

Darwin is as prepared now for invasion as it was in 194x.

old men, playing dominoes.

(Wed Oct 15 1997 03:35 - ID#310407)
Sheller you said of AG "The transiting Moon will be opposing Greenspan's Natal Mercury.... Also, transiting Mars, in AG's Solar 10th House, will be moving into square with his ( Ur ) anus..."

All I can say is, I just hate it when that happens.....

( Go aheaad all with the anal retentive comments... )

P.S. Sheller, you ever do any dousing by any chance?? Psychic healing?? Split second in eternity stuff?? Maybe some Astral projection?? I hear some folks can Douse for Gold, psychically sense it when it's in large deposits, and even project themselves into potential rich lodes to scope it out. Seems like this could really be lucrative no?

(Wed Oct 15 1997 03:38 - ID#310407)
@HepCat is back
You folks DO realize that "Gertrude" at 2:12 and 2:15 is HepCat. Right?

(Wed Oct 15 1997 03:47 - ID#255285)
just another bird on the wing
Auric, well, as a matter of fact i have some views, thank you for your invitation. It is, i suppose, an antipodeam viewpoint. While most of the posters here seem to be N American, Down Under we may see things differently. Like, my view is very coloured by a book I've mentioned more than once, "The Coming War with Japan." and my rather superficial understanding on the Strategic commodities, raw materials required by the voracious tigers, not just in peace, but more especially in war.

I am afraid that the economic meltdown of the S E Asian tigers will impact greatly and , in fact, lead to war. Yes, I believe the kernel of the next conflict that will immerse many nations will have it's genesis in the Western Pacific. It may be the ongoing festering hostilities between any two of a dozen belicose nations, that are now experiencing internal growing pains. Such hostilities, be they between China & Japan, or Russia & Japan, or China & Russia, or Korea N & S, or Korea & Japan,or Malaysia & Thailand, Indonesia so many to choose from.
Any conflict will inevitably, ( imo ) quickly bring others into the the conflagration, Dominoe theory revisited.

I fear, therefore I aurate

my precious

;- ) )

(Wed Oct 15 1997 03:58 - ID#255151)
@ Home

aurator--A agree with your take. As Buckler stated, phase 2 of a currency crisis is capital flight, where people who can, flee the currency. That may explain some of US M2 and M3 rise. Those numbers should continue to rise steeply if he is correct.

(Wed Oct 15 1997 04:01 - ID#255151)
Part 2

Greenspan has a hard choice. If he raises interest rates, an already strong dollar becomes even stronger. If he does nothing or even loosens, Money supply gets further out of control.

(Wed Oct 15 1997 04:16 - ID#255285)
first, do your reseach...
Auric um, i suppose i should've read the Buckler article before posting, i am not a subscriber, what did he say?

In terms of capital flight, you have to look no further than Auckland, New Zealand, *City of Sails* built around two natural harbours on each side of an isthmus. Our house prices are in the same league as Toronto and Guernsey, which astonishes me. as both those places are pretty puffed up, and, imo most of the reason for the puff is S E Asian immigration. sell a 3 brm appt in H-k Magazine Gap US750,000.00+, buy two 4 bdrm satellite equipped, Feng Shui Designed, annabellum style mansionettes in Auckland, Who wouldn't if they had the chance??

(Wed Oct 15 1997 04:16 - ID#33164)
Should I jump in today to buy KR's and a Mounty??

A VERY good Morning to you all! - Aurator, Mike, The Nicks, JTF, Donald, George and all the Others..

I'm so enjoying your posts-but sense some stress these days, hence my unlearned silence!

Nick @ C- right!-my bookmarks have increased by about 300 in 10 days! And I'm on a huge learning curve- just hope this all doesn't 'blow' before

the lessons have been learnt....

My Mentors: Please tell me if TODAY is a good day to get some little round coins?

George Cole
(Wed Oct 15 1997 04:23 - ID#42953)
Gold down 80 cents. The technical situation is deteriorating rapidly sad to say. Still more pain before the big gain.

Strad Master
(Wed Oct 15 1997 04:24 - ID#250297)
ALL: Well, here it is October 15 and the Pope is still alive. According to Sollog ( God of Gods ) he should've died at dawn. Bill Clinton was supposed to be next so I guess Ol' Bill's pretty happy right about now since it appears that the God of Gods may have given him a reprieve, too. Well, there's still time for the Pope to drop dead today so this may be premature. I'll check it out on the morning news.

(Wed Oct 15 1997 04:27 - ID#8683)

The Cap'n basically is saying that a panic ( my word ) is underway, and a lot of the money is going to safe harbours, like US, Aus. and NZ. This is nearly impossible for the Fed to influence, and is potentially very destabilizing.

Strad Master
(Wed Oct 15 1997 04:29 - ID#250297)
GEORGE COLE: EBN shows gold UP .70 and silver UP .03. Obviously, we get our information from different sources.

(Wed Oct 15 1997 04:40 - ID#257148)
Colleen, Good to see you. Unfortunately, there aren't any quick solutions.

Here is a post from almost a year ago, one poster, Gold Lover, had just lost everything, getting caught in the histeria of the kitco goldbugs ( and i wasn't posting then! ) ...many truths were told at that time...

there is much wisdom in these pages, but i repeat myself...

Date: Thu Oct 31 21:42
CChi ( @MindTrap#24 ) :
To The Rest Of Us and, possibly, Gold Lover ( s ) and Lurker ( s ) :

One day in Internet I found Kitco, and I was REALLY excited. I was especially fascinated by the professional discussions here - the fundamentals, the technicals, and even the debates on which is better. There are in-depth researches on central banks, and inside information, etc. I check in Kitco rather frequently - this is MY secret weapon to beat the market. I can ear-dropping on the opinion-exchanges from MTs. If ONLY I can pick up some leftover from them, I will be RICH as well. But I usually ONLY pick up those that can enforce my position.
Besides, as much as the MTs are willing to share their thoughts in public, they can never transfer to me their psychological
makeup on dealing the market.

How can they take some losses without losing their confidence and humor. How could someone admit in public that theyve lost some $$.

How can one stay as the last gold bull while the market was sinking at light speed. Nor can the MTs teach me their trading strategies.

When Old Man said that he brought some gold the other day, did you also jump in as well? After all, I benefited from OMs tip on crude. However, the next evening OM said he got stop out the first thing in the morning. Did I? No. Some of us might be holding mutual funds which takes 1-2 days to response, some of us might not even know what a stop means. Worst of all, by seeking supports from pears ( since we taken care of BBW, we are all gold lovers, ) I could be running the risk of losing my independent judgments and trading disciplines. For example, I could be ignoring the warning signs in my indicators in favor of Kitcos consensus. These days Im enjoying the book "Mindtraps" by Roland Barach. In the FORWARD, Van K. Tharp wrote:
 investors must go through three phases before they can become successful.

In the first phase, they are typically looking for someone to tell them what to do.
Phase two is when a person decided to look for the magic system.the "Holy Grail."
Notice that both phase. of an investors progress involve looking outside of oneself for answers
Once you realize how YOU are producing your OWN losses, you can then take the necessary steps to turn your financial
future around. ----------------------
One day the market will turn your and my way, and Im sure you and I WILL be there to take it. One day when you and me
can clearly identify our own thoughts and feeling, analyzing the pros and cons of a potential move, handling our fear and
greed properly, capable of gain perspective on the market situation, and develop the most rational strategy suitable for our
own personality and our own goals.
Kitco is a great place, if you can help NOT to let Master Traders become your Mind Traps.
Best Luck in Trading.
The fact that people change their attitudes to make them consistent with their actions has important implications for the
investor. For example, if you are 100 percent invested in the market, in order to be consistent with your action, your beliefs
about the market will need to be bullish. You will be more likely to accept bullish rather than bearish news.
-------------------MINDTRAPS Page 80 -------


(Wed Oct 15 1997 04:44 - ID#386276)

Aussie major gold shares move up today in face of declining gold prices.
Buyers are not seen as having any sense.
Newcrest surges into new strong uptrend. Up 14c to $2.89.
Markets confused by change in sentiment in out of favour gold shares in the face of a falling market.
Wonder why???

Earlier posting RJ sounds like a Hepcat/LBG clone!

(Wed Oct 15 1997 04:49 - ID#257148)
a kingdom for an apostrophe.
E in aurospeak



George Cole
(Wed Oct 15 1997 04:49 - ID#42953)
New Lows: First of all we are talking about now 12 month lows, not all time lows. The trend in the number of new lows is one of the best indicators of the market's internal health and often gives an early warning of trend changes. In 1987, for example, the number of new lows began to expand rapidly months before the crash.

In the latest issue Forbes magazine, columnist Billy Salomon extols the "good kind of inflation." Paper asset inflation, of course. This forecaster and the paper crowd in general see the good times lasting for the forseeable future with nothing more than a 10% correction at some point next year. Talk about about pride coming before the fall!

(Wed Oct 15 1997 04:55 - ID#257148)
nice inflation, sit !
GS Cole morning, "the Good type of inflation" some kind of window dressing on this news... be a good little inflation, and behave yourself, that's right, keep quiet, don't say a thing, and smile inanely. I might call my next cat *inflation* on the strength of this bon mot. ;- )

George Cole
(Wed Oct 15 1997 04:58 - ID#42953)
STRAD MASTER: I get my quotes from DBC and they have usually been accurate in the past. BTW, December gold now down $1.10 and Joberg off 1%. Are Aussie gold shares still up , Nick?

(Wed Oct 15 1997 05:35 - ID#386245)
G'day colleen. You have asked your Kitco friends if today is a good day to buy some Krugs ( ugly as they are ) . I'll sell you some Aussie gold nuggets--nice and shiny and also .999 ( None of that rhino red stuff mixed in ) .

More seriously-- here is my answer.

1 ) Let's say we all said "buy today" colleen--and gold was $310 in two weeks. a ) we would feel bad, but b ) YOU would have lost $$$.
2 ) The simple answer,colleen, is "YOU decide" on the best timing!! I personally like to buy things when the blood is running in the streets. I had been out of the gold market for many years until my government in it's great wisdom sold us "down the river"--an old slave term. I then KNEW it was time to start getting back into precious!!! I have been waiting for another big killer announcement ( "Germany sells 3 billion tons of gold" ) or some such so that I could buy in BIG that week!!! I'm not so sure any more that a CB announcement is going to move the market very much. I think the boy has "cried wolf" once too often.

This is probably not much help--so here is another idea. Divide your gold coin money into 4 lots. Buy 1/4 now and 1/4 in each of the next 3 months--OR if there is bad gold news and a bigger than usual drop--qet in quick and buy the lot!!! The downside is now much smaller than the upside. In two or three years you will be wondering why you prevaricated over a few $$$ on the gold price--as it will be so much higher it won't matter.

(Wed Oct 15 1997 05:35 - ID#26793)

(Wed Oct 15 1997 05:45 - ID#26793)

(Wed Oct 15 1997 05:47 - ID#26793)
CNBC says Pakistan has devalued but I have not yet been able to find it on the web.

(Wed Oct 15 1997 05:50 - ID#255285)
would you pay for investment advice from a birdwatcher?? Why, then from a GARTMAN?
Colleem Nick@Canberra gave you much more practical advice, here is my half-pennyworth;

look also at your local legislation for purchasing and holding bullion. what are you *allowed* to hold, are there any *taxes* on the purchase of the bullion ( GST, VAT ) are there any registration requirements of purchases...

clink, clink, some now, dry powder, doesn't matter which way the price goes, just watch, and leave enough cash to buy more as we go up, patience..

I bed, precious is precarious today folks, take care.

Hi Popey!

a ratted aurator ;- )

The slowest I've ever seen the Net, it is snalining 21 Kb/sec--

Remember, the early bird gets the worm, or snail

(Wed Oct 15 1997 05:52 - ID#26793)

(Wed Oct 15 1997 06:03 - ID#26793)

(Wed Oct 15 1997 06:07 - ID#403335)
You said "Foreign participation is dropping in bonds ( since August ) Foreign money is being used at home to repair local problems."

If you look at the dollar chart, you will see that it topped in August also. My suspicion was that foreigners stopped buying bonds or stocks or both at that time.

(Wed Oct 15 1997 06:10 - ID#26793)

(Wed Oct 15 1997 06:15 - ID#26793)
RLM: When I see the news this morning from around the world this morning I feel even stronger about my suspicion that the Dow has already topped.

(Wed Oct 15 1997 06:23 - ID#224151)
Ebn showing spot gold up $2.50.

(Wed Oct 15 1997 06:26 - ID#26793)

(Wed Oct 15 1997 06:28 - ID#255285)
I'm tanked. and i hope you're all tankful for the day...;)
Donald 06:15 with you bro, but perhaps precious hasn't tanked?

(Wed Oct 15 1997 06:31 - ID#18970)
Gold down 1.8 and Silver down 2.5. Looks like the COT works damn well when the commercials get short, but who knows their position now.
I think this shows the WAll st boys are attempting to push it down. This is easier to do when the specs are long as they know where to push it to make them bailout and reverse. Once the Commercials get long again it is more difficult as their trading is less technically oriented. Charts on metals not looking good ( by design? ) look for 480 silver and at least 325 gold. Need to reverse today to give bull a chance but looks like the paper sellers are determined again. Waiting for next CB announcement. They will be all over it on CPI day IMHO.

(Wed Oct 15 1997 06:35 - ID#26793)

(Wed Oct 15 1997 06:37 - ID#18970)
Kitco close to mark shos gold dowen 2.5 and silver down 4/ As Yogi Berra said "its deja vu all over again". Look out below the stops are ALL gonna get hit. Anyone know what the S&P is doing.

(Wed Oct 15 1997 06:44 - ID#26793)
Aurator: Gold should do better than stocks. Gold stocks may have a problem along with other stocks. Did you read my post a few minutes ago about Japanese reserves? At some point they will feel enough pain to do something with the 225 billion. Reduction of their bondholdings will hurt the dollar and help gold. I just can't predict when.

(Wed Oct 15 1997 06:54 - ID#286410)
Good Morning
WW- S&P500 -515

(Wed Oct 15 1997 06:55 - ID#26793)

(Wed Oct 15 1997 06:59 - ID#18970)
Thanks Stalder/ a -515 is good news and gives reason for hope for a PM turn around today.

(Wed Oct 15 1997 06:59 - ID#18970)
Thanks Stalder/ a -515 is good news and gives reason for hope for a PM turn around today.

(Wed Oct 15 1997 06:59 - ID#26793)

(Wed Oct 15 1997 07:07 - ID#364147)
@ capebreton
Hang Seng down 452.32 ( 3.27% ) as the Hong Kong economy continues its slide since the turnover---often a proxy for U.S.equity marker...hmmmm. but on the other hand Dec. gold down 2.30

(Wed Oct 15 1997 07:08 - ID#26793)
@FLASH-Kitco Scoop!JapanBankruptcyWorstEver

(Wed Oct 15 1997 07:09 - ID#150246)
Got Questions
I have a few questions for anybody who cares to answer.
Why do a lot of people feel gold is a good buy now?
If the market crashes, does that mean gold will rise?
What about gold mining companies during a crash, do their share
prices normally rise?

(Wed Oct 15 1997 07:09 - ID#364147)
@ I is stupid
marker=MARKET in Capebretonese....

(Wed Oct 15 1997 07:17 - ID#26793)

(Wed Oct 15 1997 07:20 - ID#26793)
Good Morning Ted: Mabye you should get in the car and hand deliver some paper today?

(Wed Oct 15 1997 07:21 - ID#364147)
@ RJ + EB
RJ ( 00:24 ) Was wondering how long it would be until someone tore into the e-man---good job!....EB ( 00:30 ) Good T.A. call dude!

(Wed Oct 15 1997 07:25 - ID#364147)
@ The Donald
Mornin Donald!! Nah,I've delivered all the "paper" I'm goin to @ least for the remainder of the year---got enuf capital gains for this year and have already unloaded more than 60% of my beloved "paper".. Weather: 44 degrees+ sunny

(Wed Oct 15 1997 07:28 - ID#26793)

(Wed Oct 15 1997 07:28 - ID#396137)
IMHO when buying coins, like Krugers, one usually buys for a reason.
If this be for a gift, or for long term savings, buy anytime. If a
large quantity is involved, it may pay to vary the buying, like averaging
down and up, in price, and varying the type of coins, as well.
Hope that helps.

To ALL- Watching the behavior of the financial markets, as we all do,
I think it interesting to remember that the HI TECHS lead the markets
up, and may also be the indicators, as to when the markets will begin
their correction, or bear market. The trouble with Mr. Puetz's scenario,
of a crash, and believe me I'm a bear from way back, is that many stocks
seem to be making bottoms. I notice rotation of sectors, as well. The golds are one of these sectors.

Bob M
(Wed Oct 15 1997 07:29 - ID#26059)
If the Asian markets do crash bigtime, it probably would bode negatively for gold, at least initially, because gold is generally the first asset people unload when their backs are to the wall. Dont bet on gold rising substantially during the early stages of a crash, unless it is accompanied by a war. Long term fear is what drives up the price of gold. The market would have to drop off significantly with all hope of a rebound gone, thus changing the general investing mentality. Drops in the stock market are still perceived as buying opportunities and this is unlikely to change soon until a major, major protracted decline occurs. People that I talk to say, I dont care if the market drops 25%, I am still making money, so in my estimation it probably will take a good 35% decline to shake people is very hard to break a long standing trend...the most effective weapon is war...sad to say...

(Wed Oct 15 1997 07:31 - ID#255151)

DOH! Gold now at THAT NUMBER!

(Wed Oct 15 1997 07:36 - ID#26793)

(Wed Oct 15 1997 07:41 - ID#26793)
Auric: Gold has been doing a reverse of stocks lately, weak in the morning, stronger in the afternoon.

(Wed Oct 15 1997 07:41 - ID#364147)
@ Mike Sheller
Copper news hot off the press:
But Long Term Looks Bleak

Dow Jones Newswires

Copper prices rebounded as traders reacted to the second consecutive
decrease in London Metal Exchange warehouse stocks.

Copper for December delivery rose 1.7 cents to 95.85 cents a pound on
the Comex division of the New York Mercantile Exchange. March 1998
copper rose 1.6 cents to 96.4 cents a pound.

The gains were modest but noticeable in a market that has been searching
for good news lately.

"The consensus opinion was overwhelmingly bearish" at industry meetings
held in London last week, said Mike Frawley, senior vice president of
Carr Futures, a subsidiary of the French bank Credit Agricole. "Not many
people I talked to were looking for much of a pickup of demand out of
Asia and China."

But Tuesday, traders "were a little encouraged" after stockpiles of copper
slipped more than 2,000 metric tons to 337,900 metric tons in
LME-endorsed warehouses, said Mr. Frawley. Some Chinese buying has
returned to the market, traders noted, and the U.S. economy continues to
grow quickly, leading to higher copper demand. A metric ton equals
2,204.62 pounds.

Some traders turned around bearish positions by buying futures contracts
Tuesday while others established fresh new positions in the market,
analysts said. Many of those traders saw a bullish sign last week as copper
prices stabilized despite the long-term trend of increasing stockpiles.
"Copper is groping for a bottom," said Richard Hirsch, vice president of
metals trading for Deutsche Morgan Grenfell in New York. Yesterday's
buying was "fresh buying by copper consumers and investors," he said.

Overall, the consensus opinion on the copper market continues to be
bearish, with most analysts projecting that the market will shift from a
deficit to a surplus by the end of this year as numerous mining-company
projects break ground. In fact, at the London Metal Exchange's industry
meetings last week, commodity producer Codelco, the Chilean-based
mining giant, gave a bearish outlook, predicting that Western-world
stockpiles would rise for the next two years after three consecutive years
of decreasing.

"During 1998, the market should feel the impact of stock increases" and
higher production from base metals mining concerns, said Isabel Marshall,
Codelco's vice president of research.

But in the short term, many analysts noted that copper could rise slightly
within a tight window of between 90 cents a pound and $1 a pound. The
dearth of demand in the wake of the Asian currency crises has delayed
numerous building projects. And despite traders' reports of isolated
purchases out of China recently, that behemoth continues to keep its
purchases to small quantities. "We see dribs and drabs, but nothing big" in
Chinese buying, said Michael Franco, a metals trader for Refco Inc. in Far
Hills, N.J.

Despite the bearish long-term forecasts, David Rinehimer, an analyst for
Smith Barney, says the market could rally quickly up to about $1 in the
next few weeks. But assuming no significant supply disruption, prices
could break below 90 cents a pound next year as the surplus builds, he
says. Bulls point out, however, that supply disruptions could befuddle the
bearish equation, with El Nino-related floods and droughts looming as a
potential roadblock to supply increases.

In other commodity markets:

PRECIOUS METALS: Precious metals ended the

(Wed Oct 15 1997 07:46 - ID#36965)
Hi Ted and the rest of you yellow bellies. It lookes like the gold market is working around a narrow band of prices and needs something to really kick it in the tail end. I guess we should be happy that we have this windown of opportunity to accumulate this store of wealth if we aren't on short fuse options and such like many of us. Having seen my soybean and wheat options evaporate like the morning dew this year and now gold and silver options I'm about of the opinion that options really suck as a whole. I guess we don't mind a little risk or we would be watching our money markets with great excitement.

(Wed Oct 15 1997 07:46 - ID#26793)

(Wed Oct 15 1997 07:50 - ID#18970)
Gold down 3.0 silver breaks 5.00 is at 499.5 down 8.5. That COT is an unbelievably accurate indicator when the commercials get short and the specs get long ie LOOK OUT STOPS! they are pourin it on!

(Wed Oct 15 1997 07:51 - ID#364147)
@ Tort
Mornin Tort! Hate to admit it but I AM watchin my money-market ( yield 5.26% ) with greeeeat excitement---what's that say about mois?? Equities ain't the only thing plunging as Dec. gold now down 2.90....

(Wed Oct 15 1997 07:51 - ID#26793)

(Wed Oct 15 1997 07:52 - ID#386276)
George Cole
Aussie gold index fell 2.3pts today to 1323pts.
Four of our major gold producers today:
AAA +1, LHG +1, NDY -1, NCM +14

These 4 co's have been the best ones breaking up strongly on the latest gold rise. Newcrest the latest to breakout strongly.
They have held their prices up remarkably well considering the gains that they have put on in the last few weeks and the recent fall off in gold. Sellers are moving in but strong demand still.

Probably more sellers tomorow on the latest move of gold but showing strong interest and momentum.

Many of our other gold stocks have shown good basing action with strong accumulation recently, but their prices have not shown breakouts yet. These ones are reacting the worst to golds recent decline.

All I can say is that they seem poised and waiting.

I currently hold calls in LHG & NDY, long dated ones and hope they won't get to badly burnt if we get a tank.

Once again I am making more money out of our bank shares than out of gold shares.
Calls on the way up. Now puts on the way down.

(Wed Oct 15 1997 07:57 - ID#364147)
@ EB
EB dude: yer T.A. call is lookin better by the minute! Dec. Gold down 3.10 and WW's silver down NINE cents...

(Wed Oct 15 1997 07:59 - ID#252166)
Option Prices
Where on the net can I find gold futures option prices?

Thanks in advance

George Cole
(Wed Oct 15 1997 08:05 - ID#42953)
Bob: You are correct in arguing that the public will not move heavily into gold until FEAR replaces greed. And stocks will have to go down hard and stay down for awhile before stock investors abandon hope and look for alternatives.

Today's bear raid shows that -- contrary to my expectation -- private investment demand for gold still is insufficient to break the grip of the western CBs and the financial establishment. Now that the breakout has been decisively beaten back, $320 probably will be tested again. If that doesn't hold $310 is a real possibility.

(Wed Oct 15 1997 08:11 - ID#386276)
JTR This site has end of day downloads.
foptions.txt is the file to get.
symbols file at bottom will explain all.

(Wed Oct 15 1997 08:24 - ID#258427)
Wonder why Globex is down so big this morning?? Some news I missed?

(Wed Oct 15 1997 08:32 - ID#255383)
retail sales
Sept. retail sales up .3%

(Wed Oct 15 1997 08:34 - ID#30116)
EBN has their 'directional' signs backwards.

(Wed Oct 15 1997 08:36 - ID#30116)
The answer is, ... Fear of a rate increase due to inflationary pressures. You can't have everybody devaluing their currencies, or can you?

Bob M
(Wed Oct 15 1997 08:39 - ID#26059)
George S Cole- I still hold to my original belief from several months back that gold is going to need to go down to $270 and test its low there before a significant rebound can occur. The interset to buy gold does not exist at these levels..too many people have been burned over the last 17 years..I still believe that a significant event, such as the Federal Reserve selling a large portion of their gold holdings, or the US Treasury, will be the final blow for this market to turn in a long term has to happen this way..then the buyers will emerge..enjoy your commentary very much...

(Wed Oct 15 1997 08:40 - ID#258427)
So what's new ... since yesterday?? Intel Earnings down...more asian tiger stox down ... retail sales not that bad ... Globex down Big??

(Wed Oct 15 1997 08:40 - ID#386276)
George - do you think that this could be that last royal flush-out of the longs in gold. Is there any news as to why gold is tumbling so.
It makes me think of AG's warnings on how instantly big players can move within this market these days.
I like Nick@C anology of when to buy - on the most bearish of days.

Just like these equity markets can turn on a dime, so to can gold.

Sometimes, I think that in these days of using computors and instant data, that we are watching the trees too closely and that it is good to step back and take a long look at the forrest.

Doing that at this point in time, I see very clearly what must come about, the return to value on equities and the same for gold. The timing is just the uncertainty.

The trouble is that when I am trading, I am amongst the trees and tend to trade trying to get the best percentage profit in the shortest space of time.

At the moment I like the concept of having a longer time frame in my investments, so that there is time for all these changes to unfold.

I'm currently heavily short on our equities, hoping to swing to paper metals after a reasonable decline and then to physical if it gets all out of hand.

(Wed Oct 15 1997 08:42 - ID#339320)
@Food for thought

ANOTHER has made various comments as to the relation between oil and gold, due to the arab's ( wellfounded ) distrust of U.S. paper, and that they demand certain percentages of their payment in gold.

In light of mid-east tensions, an interesting undercurrent has been developing during the last year and a half in regards to the U.S.'s energy allies: The U.S. NOW obtains the majority of it's oil from Venezuela. Venezuela does not desire gold their oil purchases, and are extremely U.S. friendly. Venezuela has recently discovered oil reserves that now total more oil than Iran and Iraq combined. So persons looking for an oil or gold squeeze due to petroleum, should really factor this into the equation.

ANOTHER: A personal thanks for your posts; you have put ( perception of ) rationality back into a market that I have seen as a total contradiction, and cost me many lost nights of sleep.
Please continue posting, and don't pay attention to the knuckleheads that are attracted by the anonymity of the Internet.

(Wed Oct 15 1997 08:42 - ID#30116)
Could it be, that investors are a little jittery over the Chinese take over of H.K.? The Chinese have no problem in manipulating the Yuan. Think about it.

(Wed Oct 15 1997 08:44 - ID#30116)
BillD -- The blush is wearing off of the romance. Reality is begining to assert itself. AG is talking, and the numbers seem to be confirming his warnings this time.

(Wed Oct 15 1997 08:44 - ID#286199)
BillD and Panda: Retail sales are up more than expected AND previous months have been revised upward. There's more consumin' goin' on out there, than we have been told. Sneaky bunch, that government. S&P down more than 8 and look out below this morning. Gold should rally on this inflationary news.

(Wed Oct 15 1997 08:48 - ID#30116)
Speed -- Revisions, that's the killer! That's what the bond players are the most fearful of. It seems the trend has changed, the news has not been surprising on the 'positive' side, but the 'dark' side has been emerging.


(Wed Oct 15 1997 08:49 - ID#286199)
@leaving for work
The next CPI number will come in higher than predicted just like the PPI number did. Inflation is here. Just wait for the Christmas spending to crank up. Gold is already coming back up from this mornings lows. Y'all cheer up now, y'hear.

(Wed Oct 15 1997 08:50 - ID#30116)
$PREM at -88, fair value is around 690 over cash... At this point, it looks like a lower open ( understatement )

(Wed Oct 15 1997 08:54 - ID#31868)
I have been following the commentary on Kitco for some time and learned a great deal.

One item I would like to point out is that the Federal Reserve is constantly and consistently talked about as if it were part of the Federal government. It is not. There is nothing Federal about the organization.

It is a corrupt, non-reporting entity with a knife to the throats of the people it supposedly serves. I do not believe that A. Greenspan is a bad man, but he is in a very bad situation. He is caught between the bankers and the politicians.

I have tremendous respect for the man as he speaks for the fiat paper constituency and yet, he stands tall defending gold as the ultimate store of money. He then goes further and explains why.

My soapbox is giving way.

The Wichita Lineman
(Wed Oct 15 1997 08:54 - ID#374200)
Investor Sentiment
I see the fluxuation between 310-330 as insignifigant for the holders of gold stocks. I would like to remind everyone here that I acheived a doubbling of my money buying royal oak mines when gold was at 318 and then went to 340 a few weeks later. I suggest since you all are looking for a long term change in investor sentiment, you hold gold stocks because in my opinion they offer the greatest upside potential in a rally, and the greatest sheild in a decline to the 310 level.

(Wed Oct 15 1997 08:54 - ID#258427)
Thanx yall
Appreciate the conversation....GLOBEX DROPPING LIKE A ROCK!!

(Wed Oct 15 1997 08:55 - ID#386276)
Avid chatter:
bulls have been loading up for the ticket on the rocket to the "promised land" blinded by the light of what they think they can see they are totally oblivious to the reality that equity markets throughout the world are struggling declining is a better description....alas they will soon realize the truth...enough said...let the games begin!

U.K. Stocks Drop, Hurt by Plunging H.K. Market, Intel Earnings U.K. stocks fell, dragged down by a plunging Hong Kong stock market and lower-than-expected earnings from Intel Corp. of the U.S. The benchmark FT-SE 100 Index dropped 30 points, or 0.38 percent, to 5278.9 in the first 15 minutes of trading. HSBC Holdings Plc, Britain's largest bank, which makes a lot of its profits in Asia, fell after the benchmark Hang Seng Index tumbled 688.41, or 5 percent, to 13148.15, amid rising interest rates and concern that a two-year property boom has subsided.

in a real world one check ones grocery bag to see if they are getting value for their purchases does not rely on false claims of pie in the sky dreams and worthless peices of paper....alas we are not in a "real world"

Globex lows SPX - 950 NDX -2300
Last SPX -780 NDX-1800

(Wed Oct 15 1997 09:01 - ID#228128)
WW or anyone: where do you get the COT data?

The Wichita Lineman
(Wed Oct 15 1997 09:02 - ID#374200)
government inflation figures
Does anybody else feel the numbers are wrong. I have seen increases in the price of just about everything I buy. With the piles of free credit available and super low home loans ( Everybody is worthy of a 10,000 line fo credit with a Visa Gold Card now, and you can have multiple cards too ) , there is so much money out there chasing something, be it stocks, goods, services. Because rates are so low, most people I speak with don't give a care to paying off their balances, even though they don't realize card companies charge about 18% interest. Oh well, everything is hot except gold, but the tables will reverse, gold is never out of style for long.

(Wed Oct 15 1997 09:05 - ID#426220)
Historical Data Do NOT support Your Statement
WW: YOUR comment That COT is an unbelievably accurate indicator when the commercials get short and the specs get long ie LOOK OUT STOPS! they are pourin it on! IMPLIES that this bodes ill for gold. Unfortunately, recent history belies your assertion. Lets check the record since early 1992 when the Commercials went from a strong net long to a net short position per COT data.

About June 1992 Commercials reversed from net long to net short. During next three months gold rose from 338 to about 361 - a rise of almost 7%.

In March 1993 Commericals reversed from net long to net short. During next four and a half months gold rose from 330 to almost 410 - a rise of more than 24%.

Again in March 1995 Commercials reversed from net long to net short. During next one and a half months gold rose from 375 to just over 400 - a rise of almost 7 again%.

It is obvious that on the average gold rose nearly 13% within the next three months JUST AFTER THE COMMERCIALS WENT FROM A NET LONG TO A NET SHORT POSITION. As we all well know history never exactly repeats. Nonetheless, there is recent statistical evidence suggesting the noble metal may rise to 367 ( from todays current 325 ) by mid-January 1998.

In any case PLEASE show us when the Commercials switched from a net long to a net short position, AND THE GOLD PRICE IMMEDIATELY DECLINED, as you suggest.

Data source of above figures: Commodity Trend Service - FUTURES CHARTS

(Wed Oct 15 1997 09:19 - ID#386276)
Gold rising under good volumes - GCZ7 up $1.40 after opening gap down. Exhaustion gap? Change of trend after opening and trading down lately?
Are the Americans buying fear insurance at a cheap price?

Intel offered heavy at 86 1/8

The Wichita Lineman
(Wed Oct 15 1997 09:20 - ID#374200)
Donald about your comment on gold doing better than gold stocks could you please explain the rationale ?. I am bullish on 400 gold which could triple or even ten-bag the price of some gold stocks, while the ounce would rise by 30 percent. Where are you comming from ????

(Wed Oct 15 1997 09:22 - ID#348286)
Looks like the HEPPER may be right. :- ( (
Gold looking very weak, ready to take out more stops. If it doesn't hold 320. look out below.
Asians were big buyers, but the new crisis breaking out will not help matters. They have major problems, which IMHO will sooner or later hit the western equities.

(Wed Oct 15 1997 09:22 - ID#348286)
Looks like the HEPPER may be right. :- ( (
Gold looking very weak, ready to take out more stops. If it doesn't hold 320. look out below.
Asians were big buyers, but the new crisis breaking out will not help matters. They have major problems, which IMHO will sooner or later hit the western equities.

(Wed Oct 15 1997 09:27 - ID#197128)
Gold bounced off $325 and ditto for silver at $5.
I believe the uptrend is now ready to continue.

George Cole
(Wed Oct 15 1997 09:31 - ID#42953)
the action
BOB M: I have learned the hard way that short-term gold fluctuations generally are unpredictable. I think we will have to rely on TA and reaction to news to tell us when the long-term trend has finally changed Sticking to preconceived notions of how low we will go in a bear or high in a bull can be very dangerous to one's financial health.

(Wed Oct 15 1997 09:38 - ID#401237)
The Americas
CMAX 8:42 post - Thankyou, that answers a question I had last night about the split down the middle of the Pacific and the potential blow up in the Persian Gulf - they, the big guys, are now relying on the Americas for Natural Resources. This really does explain NAFTA. They could cut the others off if they have to. This really gets interesting the more you think about it and what it may mean.

Bob M
(Wed Oct 15 1997 09:58 - ID#26059)
George S Cole- the people that I talk to that are heavy into stocks, who generallt cant stand gold, tell me that if it goes below $300 they will just seems to me that that magical barrier must be broke..time will tell

(Wed Oct 15 1997 10:34 - ID#2082)
And I am just a country bumpkin...

Ted - Thank you my esteemed KITCO colleague. Someone did read one of my posts. TA don't lie...eventually. Our other esteemed colleagues believe this is a bounce and gold will recover to make new highs...h Dear! We can lead them to water...

George - Your recent posts have me hornswoggled. Are you pushing to November now for the turn? And your most recent 'action' post is even more bamboozling. How is your financial health? Is your powder dry? Your 'veteran-market-knowledge' has been on a wild ride since May. ( EB scratching his head ) .

Dan 9:27 - If you 'believe' it to be true, it will most likely NOT be true. Use your head not your heart. Your wallet will thank you.

JTR - Nick ( Aussie ) has given you some good URL's. He did forget my favorite though.
Do your homework before 'throwing good money at bad' though. Out of the money calls will expire WORTHLESS more than 90% of the time. W/W ( watch and wait ) there will be plenty of time to jump aboard... and December options EXPIRE on NOVEMBER 14. That is ONLY one month...

$$$ h M!

i must be butta' cause i'm on a roll...

(Wed Oct 15 1997 10:36 - ID#57232)
@Work - Gold (or no) for Oil?
Cmax, HighRise: Cmax - interesting 8:42 post on gold ( or not ) for Oil. It makes sense that some Oil producers do not ( currently? ) require gold for Oil. Is it only the Middle East countries that require gold as part of the deal? I wonder how Japan gets their Oil without gold.
This adds perspective to ANOTHER's comments - one also needs to know which Oil producers want gold, and who is buying from whom.

If our ( US ) oil is mostly coming from South America, why do we have the Nimitz in the Middle East? Just like Physics, the more you understand, the more you realize you need to learn !

(Wed Oct 15 1997 10:36 - ID#386276)
Colin's Financial Charts, Quotes, News & Stock Market Crash Page

(Wed Oct 15 1997 10:46 - ID#426220)
LBMA EXPOS: PART 6 (October 13, 1997) A Collective-Mind Analysis Compiled by Red Baron
London Bullion Marketing Association is best described as a riddle wrapped in a mystery inside an enigma. Daily gold trading NEARLY TWICE South Africas annual Gold Mine production:

(Wed Oct 15 1997 10:47 - ID#158191)
The price of oil is determined by supply and demand.
If the Middle East oil flow were interrupted worldwide prices
would skyrocket.

(Wed Oct 15 1997 10:52 - ID#26793)
JTF: Did you see my post last evening with a new and very negative outlook on Chinese banks and loan portfolios? Done by a Mr. Dornbusch of M.I.T.

(Wed Oct 15 1997 10:55 - ID#241277)
Oil and Gold....a golden marriage
Cmax ( @8:42 ) and ANOTHER...your comments regarding the connection between gold and oil are intriguing. ANOTHER ( re: Red Baron's reference to your comments on LBMA part 5 ) ...I would like you to share more of your insights on evidence connecting Middleast oil and Middleast payment for oil in terms of gold, as funnelled through South Africa and through the LBMA in London ( through the Rothschild house and others ) . I too note the curious situation in Alberta, Canada where billions have been committed to expanding the HUGE reserves of oilsands ( reserves which rival the Saudi oil pool and exceed anything in Venezula ) by companies like Shell ( Royal Dutch Shell being largely controlled by Rothschilds ) and Imperial Oil ( Exxon parent in the U.S. controlled mainly by Rockefellers ) and others. I have estimated that at current production Alberta's oilsands would produce synthetic and bitumen crude oil for more than 3,000 years. This investment is curious since world oil prices are still in a stable trading band between $19-25 per barrel and oilsands production costs are somewhere between $9-12 per barrel ( compared with Saudi oil costs of roughly $2 per barrel ) .

Question: why are these companies investing now in future oilsands ( as in the case of Venezula ) ? I asked noted international journalist Gwynne Dyer ( noted Canadian war correspondent during the Gulf War and commentator on global oil production ) this question last week in person. He suggested that the billions commited to Alberta's oilsands development is mainly for security reasons. Security? Could the big oil companies ( the biggest controlled by the Rothschilds and Rockefellers ) be concerned about security of supply in the Middle East? Quite likely given the inherent instability in Saudi Arabia with rising Islamic youth movement. Also, a comment Dyer made in a previous newspaper article is more important...that is, that global oil production may peak as early as 2005 and that is assuming constant consumption by China and India ( demand is certain to rise ) ....This would then suggest that if a production peak does emerge that there should be enormous pressure of the price of oil rise yet the future markets ( which are not that future oriented..maybe 6 months out ) don't seem to pay any attention to such supply analysis ( like ignoring the predictions of the Club of Rome ) ....Point being that if ANOTHER is right, there may be a deliberate effort to keep the price of oil in a sustainable price range by placating the Arabs by making payments in gold ( through CB gold sales ) ....of course a rise in the price of oil would cause inflationary pressures in the U.S., Japan and Europe ( ala the 1970s oil situation ) which would effectively cause the Fed to raise interest rates and burst the stock market bubble.

One thing I know is certain..the Roths and Rocks long for stability...for in that situation they thrive and benefit...they ultimately seek peace and avoid chaos....thus we may be seeing a veiled attempt to create an illusion of stability despite the enormous pressures which would lead to instability.....El Nino and calamaties of nature alone are reminders that instability is not always easily controlled through human or secular power.

(Wed Oct 15 1997 10:57 - ID#57232)
sages@pages - Aurator!
Great 4:40 post on learning how to invest! I think I went through all the phases of learning you mention! I doubled my money just buying and selling gold mutual funds in 1993 -- and got hooked! Lost alot of money since then, mostly in 1994. Now sadder and wiser ( with postive cash flow ) I know to test whatever trading/investing system I use on historical data before I use it! And I research everything carefully before buying that stock! I no longer Still do better with gold than anything else for some reason -- hard to explain given how much the gold market is manipulated.

(Wed Oct 15 1997 11:00 - ID#26793)
Wichita Lineman: My basis for that statement is the response to gold and to the XAU in October, 1987. On the 19th gold bullion dropped 2% and recovered almost everything before November 1st. The XAU dropped 33% and except for a dead cat bounce stayed down for many months.

Big Rumor
(Wed Oct 15 1997 11:06 - ID#261295)

China currency to be attacked. One trillion dollar war chest readied for late October. May be underway in Hong Kong.

(Wed Oct 15 1997 11:07 - ID#26793)

(Wed Oct 15 1997 11:11 - ID#364147)
@ cape breton
Looks lile the Dow is clawing its way back ( down 19 ) and gold is still in the doldrums....WW: Just listed the property with a realator so guess you'll have to deal with a broker if you want to move to your socialistic utopia....and then you can see first-hand the EVILS of socialism gone amuck...Repent WW...REPENT ..for you know not what you say!...Amm off ta Sydney for weekly shoppin trip and a stopover @ the Casino...Dow down 11

(Wed Oct 15 1997 11:13 - ID#26793)

Who Knows
(Wed Oct 15 1997 11:15 - ID#245225)
HK Buyers
Rumor has it that several Hong Kong buyers are loading up on LARGE $ ( million ++ ) of bullion and numismatics through Blanchards. This came from someone who knows someone who works at Blanchards. Can anyone confirm?

(Wed Oct 15 1997 11:20 - ID#26793)

(Wed Oct 15 1997 11:26 - ID#26793)

(Wed Oct 15 1997 11:34 - ID#287389)

Yahoo XAU chart shows about 45% drop in October 1987. It is however, a difficult chart to read since the scale is so small. 33% or 45% makes no real difference. The point is, ABX would have been a great buy at this time due to the large imbalance in value of gold bullion vs. gold stocks.

This imbalance was in place for almost 3 weeks in July 1997. And was particularly bad on 7/7/97, when GS Cole convinced me it was no time to go coward! Buy on dips. Sell on Blips.

Gusto Oro
(Wed Oct 15 1997 11:37 - ID#377235)
Dow down 29. October 23rd cometh soon and I don't see an all-time high.

Steve - Perth
(Wed Oct 15 1997 11:54 - ID#284170)
HELP: Any suggestions on what INFLATION OR DEFLATION is going to do? It
seems that the stock market has had it ( virtually ) , & I want to know how much risk is there in holding BONDS like Warren Buffett is starting to do. If the deflation scenario plays out ( which I think is somewhat likely ) , then Bonds may be fairly good for a while yet ( compared to cash ) . But Mexico & that Bond crash still haunts me. Could we see a short term interest hike that hits bonds temporarily, then the interest rates ease off within a year or so, when the world economies spiral into
further deflation? Bonds would still hold their own. This is not to decry holding gold, but purely utilising a diversified portfolio outlook. I am greatly concerned by bonds, but with Buffett heading that way, it certainly smells of deflation big time. Have I missed something???

Strad Master
(Wed Oct 15 1997 11:57 - ID#250297)
GEORGE COLE or ANYONE: Interesting info. that DBC is generally more accurate on prices than EBN. Could you post the URL for DBC? Many thanks. Off to start the day...

(Wed Oct 15 1997 11:58 - ID#258427)

(Wed Oct 15 1997 12:01 - ID#31868)
Found this on a news service. How can anyone believe any of the numbers our government supplies. This is a joke, and these people should be held criminally accountable all the way up to the President.

A surplus before the President leaves office! Good grief. The American people deserve the financial dabacle they are sure to brutally face in the near future.

My humble recomendation to all readers. Trade in your funny money for gold and silver and stop searching for the lows. Buy the metals, when the debt wave hits all forms of the various metals will be hard to come by in any form.

Mention the word depression to an American and all you get is a handful of Pro-Zac...

Wednesday October 15 10:06 AM EDT

U.S. '97 budget deficit below $30 bln-OMB's Raines

WASHINGTON, Oct 15 ( Reuters ) - Office of Management and Budget Director Franklin Raines said on Wednesday that he saw the U.S. budget deficit for fiscal 1997 below $30 billion, and that he was optimistic a surplus would be reached by 2002.

Raines told a National Association of Manufacturers breakfast that he believed a budget surplus would be reached before President Clinton left office. He said OMB would announce at the end of October that the budget deficit at the end of fiscal year 1997 would be below $30 billion.

The Congressional Budget Office has estimated the deficit at the end of fiscal '97, which ended September 30, was $23 billion.

(Wed Oct 15 1997 12:01 - ID#30116)
Looks like the Mutual Funds are getting 'defensive' to.

You want information? Go to ....

(Wed Oct 15 1997 12:02 - ID#30116)
Try this

Gusto Oro
(Wed Oct 15 1997 12:06 - ID#377235)
Cmax, JTF, here are the facts on Venezuelan Oil. It is true that Venezuela is the number one market for oil to the US ahead of Saudi Arabia. However, even so, it only accounts for 18% of our imports.
It is true that Venezuela is closer than most other sellers and therefore a much cheaper source to ship oil from. However, this positive is greatly diminished by the fact that new Venezuelan oil coming into line is unusually thick and difficult to refine.
It is true there is a huge find there which Arco Oil and its partners wish to develop. However, despite its size, experts only see a 20% increase in production through the year 2000.
It is not true in my opinion that Venezuela is the answer to our oil addiction in the US.

George Cole
(Wed Oct 15 1997 12:19 - ID#42953)
gold price targets
BOB M: BOB: That "do not buy until we go below $300" attitude will only persist as long as gold is perceived to be in a bear market and stocks in a bull market. But once decisive evidence of a trend change develops, these people will be clamoring to buy at $400 plus

Hell when the gold bull is underway, people who won't touch it now with a 10 foot pole might well buy at $1000 as long as they are convinced the trend still is up.

(Wed Oct 15 1997 12:33 - ID#257114)
Does anyone remember the general stock market sentiment at the 1982 stock market low? Were stocks shunned then as gold is now?

(Wed Oct 15 1997 12:54 - ID#252312)
@Work re: Oil and Gold
Gusto Oro: Thanks - useful information on our dependence on Venezuelan oil.

(Wed Oct 15 1997 13:08 - ID#252312)
EK: Good point about the effect of a Mid East Oil disruption. Even if only 25% of the oil comes from there, the psychological effect on the markets will be as if all the Oil came from there!
One can save on gold by choosing non-Mid East Oil producers, but one cannot prevent the disruption of the market during a Mid East crisis.

(Wed Oct 15 1997 13:15 - ID#252312)
@Work-- Oil insurance-Rothschilds/Rockefellers
Zardoz: re your -10:55 post. I like the way you think. To understand the gold/oil/USdollar situation, one must think like the "powers that be" such as the Rothschilds or Rockefellers. What is almost as important to these families as the wealth they already have? Stability! Sometimes the interests of the few and the interests of the many overlap!
Oil prices have only begun to rise - and if ANOTHER is correct, we know what that means for gold -- once the manipulation ends!

(Wed Oct 15 1997 13:29 - ID#252312)
@Work -- Play gold stock rally to the end!
sig: re - your recent post to Donald on gold stock correction during the 1987 crash. I think the 1987 scenario is closer to how gold stocks will behave in a possible market crash, even though there is now little inflation. I agree with George Cole that our current scenario has features of the 1929 prelude, but there are more savings at risk in the market this time.
Would you be gutsy enough to ride a repeat of the 1987 gold stock rally to the top? The gold stocks doubled before the market crashed.
I see only two features on that 87 graph of gold stocks, and the DOW.
1 ) There was a massive turnover ( volume ) 2-3x baseline days before the
crash, and
2 ) the gold stock rally weakened somewhat after the final peak in the
DOW. To be honest with you, I don't know I far I would dare go
with my own money. Hopefully, I wouldn't miss the warning signals

ata boy
(Wed Oct 15 1997 13:39 - ID#254246)
Kitco participants RULE!!!

Folks it was me who bought the Dec comex gold at 326.5 this mourning.

I was looking a the .618 level at $ 327 and took a gamble that the level would be broken by just a little.

I currently have a large Cheshire Cat grin on

Peter (born loser)
(Wed Oct 15 1997 13:50 - ID#15658)
( George Cole wrote: )
* 12 month lows, not all time lows.

Thanks for clarification. I should have realised that was the meaning.
A gap ( one of so many! ) in my "knowledge". It makes sense now.

* Talk about about pride coming before the fall!

Yeah ... but no-one's used the phrase "permanent plateau" lately so I guess we can relax for, oooh a good bit longer yet ... :- )

(Wed Oct 15 1997 13:50 - ID#252312)
@Work - Bad loans in China?
Donald: Got your post about the Dornbusch fellow saying that there are no rules that the mainland Chinese banks follow in making out ( corporate ) loans. I couldn't tell if he was saying that the problem was already a major one, or will be a problem. His message might be the same either way, because if he was asked to to a study ( I think that's what it said ) then he might be reluctant to be the whistleblower!
Stormy waters ahead if Mainland China is already in bad loan trouble!
Did you see this AM post about HSBC banking stock dropping? That is one of the flagships of SE Asia! That stock generally hardly moves at all!

Richard Burke
(Wed Oct 15 1997 13:52 - ID#411318)
@Behind the Scenes Power
Zardoz: I agree with your thinking on Rothschild and Rockerfeller, the latter, however, being somewhat new on the scene in terms of centuries. The old oligarchical monied families of Europe including Rothschild have enormous behind the scenes power for good and for bad, but in every case it is for THEIR interests. That leaves the rest of his hanging on the coat tails where we sometimes get violently hurled off. However, I would agree with the stability theory right now. Someone made the comment earlier today about who controls the Federal Reserve and it ain't the US Government.

(Wed Oct 15 1997 13:56 - ID#275253)
Ok guys, I fiqured out why it is bad for the CB to lease their gold out. What I can't fiqure out is the implied lease rate. What does it mean to the pressure on the price of gold if implied lease rates go up or down? I know one of you goldbugs can help me out with this simple question. Hey, I'm buying gold and doing my part for the longs. The least you can do his help me fiqure this market out more.


Doug Schott
(Wed Oct 15 1997 14:00 - ID#215196)

Most interesting... My doggie Hecla Mining ( HL on the NYSE ) stock is holding up well even as bullion takes a hit. HL went up yesterday despite lower spot prices, and is hanging tough today.

As the good Senator from Carolina might say: "They's a lot of accumulatin' goin' on out theah."

George Cole
(Wed Oct 15 1997 14:04 - ID#42953)
rate hike?
Former Fed Governor Lyle Gramley warns of a big rate hike. Bulls stampede at your peril!


Wednesday October 15 1:04 PM EDT

Former Fed's Gramley sees possible big rate hike

WASHINGTON, Oct 15 ( Reuters ) - Former Federal Reserve governor Lyle Gramley said Wednesday the Fed will have to
raise rates ``a lot'' if the booming U.S. stock market does not cool off soon.

Without a correction of 10 to 15 percent, the stock market will continue fueling the economy by adding to consumer confidence
and wealth, Gramley said at a press breakfast here sponsored by the Schwab Washington Research Group.

Gramley said his economic model, which includes the stock market, shows monetary policy ``is about as easy now as at
anytime in the past decade.''

Gramley called the stock market ``the most important contributing factor'' to the unsustainable rate of growth.

Economic growth will come in at about three percent for the third quarter, Gramely said, adding such a level would eventually
spark wage increases and inflation.

The Fed will boost short-term rates before the end of 1997 and again early in 1998, Gramley predicted.

After that, the course of the stock market will determine if further rate hikes are necessary, he said. If stock prices fall 10 to 15
percent, a few rate hikes ``probably will be enough,'' he said.

But if stock prices continue to climb, bolstering consumers and giving businesses a cheap source of capital, rates will have to
go up ``a lot,'' he said.

Gramley said Wednesday's report showing retail sales rose more than expected in September showed ``consumers are
continuing to spend aggressively.''

High levels of consumer debt and the deepening U.S. trade deficit tended to restrain growth but not enough to put the economy
on a sustainable footing, he said.

Gramley was scheduled to speak about the economy on Thursday, the second day of the Schwab Group's annual symposium

More news for related categories: stock capsules, treasury.


(Wed Oct 15 1997 14:05 - ID#411156)
Strad Master: They have a good page with prices for a number of futures including the metals, agricultural items and oil and gas. They also have others for major market indices and foreign exhange and you can make up your own pages for up to ten items each.

George Cole
(Wed Oct 15 1997 14:10 - ID#42953)
gold rally or interest rate hike?
Wouldn't it make more sense for the Fed to cool off the market by allowing a decent gold rally than by hiking rates sharply? If gold manipulation is used as a tool to influence investor perceptions, they might want to reverse course about now. That is unless they are worried any kind of a decent rally might get away from them.

(Wed Oct 15 1997 14:44 - ID#348286)
Gold and silver coin sales pick up in September

NEW YORK, Oct 15 ( Reuters ) - Demand for gold and silver coins rebounded in September amid signs that investors were beginning to add some precious metals to their portfolios, said industry consultant CPM Group.

``Nervousness about the speed with which the stock market was accelerating this year and the attractively low gold prices may be encouraging some diversification back into precious metals after all,'' CPM Group analyst Ted Kempf said.

Sales of the U.S. Mint's silver American Eagle coin jumped to 180,000 ounces last month, nearly double the 65,000 ounces sold in August, and were up 71 pct from the 105,000 ounces sold in September 1996.

Year-to-date demand for the silver American Eagle reached 2,291,000 ounces through September, an increase of 65.1 pct from 1,388,000 ounces in the same period last year.

However, premiums for silver bullion coins fell, CPM Group pointed out.

Investors kept stocking up on gold American Eagle coins in September too.

Sales of gold American Eagles rose to 49,000 ounces last month, up 6,000 ounces from August and up 35,000 ounces from September 1996.

Through the first nine months of 1997, gold American Eagle sales totaled 461,750 ounces, an increase of 187 pct from 161,000 ounces during the same period last year.

Premiums were higher for the Australian Kangaroo, the Australian Kangaroo-Kilo, and the Austrian Philharmonic and premiums for the South African Krugerrand jumped sharply.

But premiums for the Austrian Corona and the Mexican 50 Peso declined last month.

The U.S. Mint launched its platinum American Eagle coin on Sept 23, and sold 28,100 ounces of the uncirculated bullion coins by the end of the month.

The Mint has also sold 33,000 ounces of platinum American Eagle proofs earlier in the year.

As of Sept 30, the premium for the platinum American Eagle coin was 4.38 pct, equal to the Australian Koala and the Canadian Maple Leaf platinum coins.

(Wed Oct 15 1997 14:50 - ID#57232)
@Work - gold rally or interest rate hike
George Cole: You've got my vote! Now, if we could only get AG to go along with it! My guess is he remembers Oct 1987, and is doing everything in his power to prevent a repeat-including the gold rally prelude! What will he do if he is unable to "talk" the market down? Gold rally, or modest interest rate hike? Could our baby boomer - driven bull market survive a modest interest rate hike this fall? Probably - especially if AG is there to prop it up at the crucial moments. That way there would be no gold rally to indicate a warning move of "smart money" to the exits.
Like a game of Chess, isn't it?

(Wed Oct 15 1997 14:56 - ID#246224)
BOB.M. & GSC - To say that $300 is the 'buy' consensus by those who are not following this market well, to me, indicates that gold will NOT go anywhere near that low ( just because 'ain't that tha way it goes' ) .

GSC - yes they will be chasing the sky rocket and just like 1980-1 they will create the overshoot. Some will make good change on that crowd behavior.

ALL - Has anyone noticed the spikes in S&P500 and DOW at about 10:00 and 10:45 ( on 1 minute charts ) . Very spiky day today. Options/Derivatives kicking in? Is this to demonstrate what AG was talking about yesterday at Cato? What's yer take?

Colleen - Do you think gold is pretty much bottomed? What will make gold go up? Are we in that or a prelude to that situation? What is your investment time period? ( 1, 3 or 5 years ) . What is the % of your capital that you would consider placing in this metal? ( Not being nosey just some q's which may help you answer the question you posted. )

( If I may interpret the consensus here, ) Most think gold has bottomed ( within say 5% ) . They feel there is a problem with financial stability ( inflation/deflation, rapid exchange rate flux, market implosions ) which will lead to insecurity and fear. Fear will move people to tangibles, and so gold will rise due to this demand. There is a general sense that it could happen at any time, but some here have been waiting for a few years or more for financial armagedon. ( Sorry for the repetion )

It sounds as if your thinking mid - long term since you are not looking at futures but at the metal itself. The answer to the question about % would indicate that degree of your doubt and foreboding. Most conservative investors would typically have 5 - 10% in coins at any one time as a base for their portfolio. 20% would be fairly aggressive for a typical investor. 40% seems like a real sense of imminent demise and at 60% or more we are in the bunker with helmets, guns and MRE's ( Meals Ready to Eat ) . Where ever you fall in this range.

I'm in the more than 60% crowd, though I don't do guns, nor have I a bunker. I suppose its all a matter of how crazed this world-thing seems and just how much you are willing to risk in betting for/against its crazy continuance or its demise ( or sick bed ) . Since there is a fairly large range of views here at Kitco, I'm sure you'll find company at whatever point you come to rest.

I have found that if you buy in quantity you get the best deal. One-sies and two-sies can run a hefty premium. Silver is particularly so this way because handling costs are fixed regardless of unit costs. But you can get into wholesale discount rates for much less $$ because of the lower unit cost ( in Silver ) . Ask for the quantity breaks in price. I have found that the folks around here are so used to low volume that an order for 1000 units of 1 oz silver coin ( 100%, non-circulated, investment coin ) is like a revelation to them. Here wholesale breaks for gold come in at about 30 to 40 1 oz coins. I've looked on some Internet sites and their premiums are really way out of line with what I see at the local mart. I wouldn't mind selling back to them but wouldn't dream of buying from 'em.

Take good care of those hrses of your. Have a great day.

(Wed Oct 15 1997 14:57 - ID#57232)
@Work - Gold coin trading volume - Leading indicator?
MoreGold,Donald: Looks like there is light at the end of the tunnel! Donald: Looks like bullion coin volume would be an excellent leading indicator for gold. Of course, gold could still drop below its most recent low before the supply/demand forces take over.

(Wed Oct 15 1997 14:57 - ID#26793)
AL: This news story from March 9, 1982, should help answer your question.

Paul W. McCracken is not a flashy economist. Indeed, when he was chairman of

the Council of Economic Advisers during President Nixon's first term, many in

the press regarded him as a boring speaker. But this moderate conservative is

also respected as being relatively nonpartisan and level-headed, a solid thinker

not carried away by the economic fads of the moment.

Dr. McCracken appears today ( March 9 ) before the House Budget Committee and

what this economic senior statesman said in a telephone interview may be

something of a preview of his testimony:

* On the chances of a depression.

''It is probably higher than any time in the last 40 years, but still quite

low.'' In fact, Dr. McCracken regards those depression chances as so low that

the public need not factor that possibility into its thinking.

Nonetheless, he finds two trends disturbing:

One is the financial troubles of the thrift industry. Savings-and-loan

associations, he notes, lost on average one-fith of their net worth last year,

which means half of them lost even more than that.

''There is an anxiety in the banking profession, maybe because banking is

less comfortable today.'' Because of their concerns, bankers are trying to match

the maturities of their liabilities and their assets. If a deposit is for two

years, they will try to lend that money for two years.

The second problem is disorder in the bond market. Bond buyers will purchase

only relatively short-term obligations, making it more difficult for

corporations to put their balance sheets in better order.

To deal with the first problem, Dr. McCracken suggests the government should

assure depositors in S&Ls and mutual savings banks that they need have no

concern about the safety of their money.

Some people worry about the nation talking itself into a depression. Dr.

McCracken rules that out, saying, ''If the basics ( monetary and fiscal policy )

are reasonably strong, we are okay.''

* On inflation.

Dr. McCracken figures the increase in the consumer price index of about 5

percent at an annual rate for the last four months is ''an unduly low figure.''

But he also suspects it could be down to a 5 or 6 percent level on a solid basis

by the end of this year.

With a recovery in the economy, he explains, there could be strong gains in

productivity. Business has cut the fat out of its operations ''more than usual''

in this recession. The slowdown is also restraining wage hikes.

* On the recession.

''We are not far from the economy going as low as it will go.''

Dr. McCracken expects the economy to recover at a moderate pace -- say at a 4

percent annual real rate -- rather than the 6 to 8 percent rate that is more

average for the early stage of a recovery. Unemployment, however, could continue

to grow for some months after the economy turns around.

The recession, although painful, has brought about some ''needed''

fundamental adjustments. Some trade union wages, such as those in the automobile

, steel, and trucking industries, had risen far above the average in

manufacturing. Now these wages are in retreat.

''There is no way you can beat inflation, if every union leader has to jump

over the other one on wage-rate hikes,'' says Dr. McCracken.

* On monetary policy.

Dr. McCracken reckons the Federal Reserve System will stick to its policy of

monetary restraint. ''They don't have much alternative,'' he said. ''If they

started to ease up, market interest rates would surge up.''

The fundamental point of monetarism - that a moderation in the rate of money

creation will dampen inflation - is proving correct, says the University of

Michigan economist.

* On the budget.

Dr. McCracken wants the White House and Congress to compromise on a budget

that will provide some assurance that deficits will be declining in 1983 and

1984. A $100 billion deficit is manageable in fiscal 1982 because of sluggish

credit demands, he said. But the deficits could grow to the $140-$150 billion

range by fiscal 1983-4 ''if we just rock along. . . .''

Though approving of President Reagan's basic economic strategy and concern

with national security, Dr. McCracken sees the possibility of some trims in the

proposed defense budget. He also suggests a modest increase in the federal

gasoline tax, a need for tackling the ''political hot potato'' of over-indexing

of social security payments, and possibly a delay in the planned 1983 income-tax


* On supply-side economics.

Some supply-siders have argued that sharp tax cuts would so stimulate the

economy that goverment revenues would increase. Says Dr. McCracken: ''The

miracle didn't occur. There was never any reason for it to do so.''

Industrial-nation inflation rates*

( average annual rate )

Country 1979 1980 1981

United States 11.3% 13.5% 10.4%

Japan 3.6 8.0 4.9

West Germany 4.1 5.5 5.9

France 10.8 13.6 13.1

United Kingdom 13.4 18.0 11.9

Italy 1.8 21.2 19.5

Canada 9.1 10.1 12.5

Average of

above countries 9.3 12.2 10.0

Austria 3.7 6.4 6.8

Belgium 4.5 6.6 7.6

Denmark 9.6 12.3 11.7

Finland 7.5 11.6 12.0

Greece 19.0 21.9 21.5

Iceland 44.1 57.5 51.6

Ireland 13.3 18.2 20.4

Luxembourg 4 .5 6.3 8.1

Netherlands 4.2 6.5 6.7

Norway 4.8 10.9 13.6

Portugal 23.9 16.6 --

Spain 15.7 15.5 14.6

Sweden 7.2 13.7 12.1

Switzerland 3.6 4.0 6.5

Turkey 63.5 94.3 --

Australia 9.1 10.2 9.7

New Zealand 13.8 17.1 15.4

* These figures are a reproduction of each country's official consumer price


Source: Organization for Economic Cooperation and Development

(Wed Oct 15 1997 14:57 - ID#194225)
@the mutual fund anthropomorphization department
FDPMX may hang tough again as it has the last few days - Stillwater up 4% or so. Granny, where are you? That gall bladder again, or what? You know all, I can't shake the feeling that this bull is going to run - or at least meander - right up to the year 2000, flirt with 11000, etc. Ads on TV for mutual funds - ads on TV!! Hey, they didn't have that in 1929, did they?

Tell me I'm wrong about El Toro, please. But you know, this era of prosperity, regardless of whether it is real and/or deeply based, is finally starting to work its way into the American consciousness. We are getting accustomed to growth, low unemployment, low interest rates, a ( reportedly ) shrinking deficit, world peace, etc. The Pax Clintonia. The roaring nineties, the technology explosion, cataclysmic military conflict and economic depression becoming increasingly distant memories.


And you knew who you were then
Girls were girls and men were men
Mister we could use a man like Herbert Hoover again

Didn't need no welfare state
Everybody pulled his weight
Gee our old La Salle ran great
Those were the days

(Wed Oct 15 1997 15:00 - ID#323132)
Only thing you need to know:
Gold - 310
Dow - 8300
When - 10/23/97

No one else is the cat
the cat posts when he
wants and at no other
times. Gusto Oro -
is it the 23rd yet?
Then shut your pie

(Wed Oct 15 1997 15:06 - ID#26793)
Sig: The XAU chart for 1987 that I am looking at shows October 1 at 153.
Using the eyeball method shows October 15th at about 143. October 19th it dropped to 117, October 20th to 89. Not a fun week.

(Wed Oct 15 1997 15:31 - ID#239132)
Isn't it funny how we rid the world of Hep ( arin ) cat
to make it safe for the likes of Aurophile and Oldman
( TEDrake and TEDotson ) , who don't post here anymore?
What an orchestrated scam that was. BTW, what channel
is Flagtalk on?

George Cole
(Wed Oct 15 1997 15:37 - ID#42953)
Somebody here is quite sure the Dow will hit 8300 and gold $310 by October 23. Agree on the Dow disagree on gold. But if gold does perchance hit $310 by the magic date, that will be the call of the year. Nothing wishy washy about these projections; we will know their accuracy or lack of same quite soon.

(Wed Oct 15 1997 15:42 - ID#323192)
When GSC talks about wishy-washy,
everyone should listen, because
he is the expert on wishy-washy
predictions. The call of the
year? Please. The last six
calls I made were "the call of
the year". You act like my
reputation hinges on these
particular calls. I've been
running circles around you
all year, GSC. People who
followed your advice are
known as 'broke'. People
who followed my advice
are known as 'vacationing
in Aruba' or 'putting
their kids through a
better college then
they could have afforded
without me'. Take a
pill, George.

(Wed Oct 15 1997 16:05 - ID#21957)
I would appreciate any opinions regarding the financial newsletter "Wallstreet Underground" and its author Nick Guarino. I know he is very bullish on gold.

My Father received a letter from Guarino guaranteeing a $100,000 return on a $10,000 investment. In his letter he placed a check for $5000 saying that if my Father did not make $100,000 he could cash the check.

$5,000 of the $10,000 investment goes to Guarino and the rest is apparently invested in stock options in the "guaranteed coming stock market crash".

I look forward to comments from any of you Kitco Gurus.

Doug Schott
(Wed Oct 15 1997 16:20 - ID#215196)

tsetse: From the sound of things GSC isn't the only one who should "take a pill." Can we lay off the personal slams and ego gratification a little?
Opinion is wonderful, but hard facts are better. Did you ever answer the request for the basis of your gold at 310 prediction?

(Wed Oct 15 1997 16:23 - ID#30116)
KEV -- To paraphrase a historical financial figure, "The markets will fluctuate, sometimes violently." Markets down, and markets go up. They generally go up longer than they go down, but, they generally go down twice as fast as they go up. Got it? :- )

Now, the trick with options ( no small feat ) is to get the timing right if you're a buyer. Otherwise, they're expensive!

(Wed Oct 15 1997 16:27 - ID#241149)
Or , what has this got to do with the price of a tael ( sp? ) in China?

If "everybody knows" such-and-such, then it aint so, by at least ten thousand to one.

All cats are not gray after midnight. Endless variety

Beware the "Black Swan" fallacy. Deductive logic is tautological; there is no way to get a new truth out of it, and it manipulates false statements as readily as true ones. If you fail to remember this, it can trip you - with perfect logic. The designers of the earliest computers called this the "GIGO Law," i.e., "Garbage in, garbage out."
Inductive logic is much more difficult - but it can produce new truths

Expertise in one field does not carry over into other fields. But experts often think so. The narrower their field of knowledge the more likely they are to think so.

Be wary of strong drink. It can make you shoot at tax collectors - and miss.

The difference between science and the fuzzy subjects is that science requires reasoning, while those other subjects merely require scholarship.

To stay young requires unceasing cultivation of the ability to unlearn old falsehoods.

Never underestimate the power of human stupidity.

Taxes are not levied for the benefit of the taxed.

The Wichita Lineman
(Wed Oct 15 1997 16:27 - ID#374200)
advice and egos go hand in hand
The only purpose of this forum is to exchange viewpoints and consider other perspectives. I think for the most part the regulars on this site are independant thinkers by their very presence here, and would not go under the lemming category. But to all those who are following these so-called internet sages, try to think out things for yourself, you'll feel that much better when you guess right.

(Wed Oct 15 1997 16:32 - ID#2082)
.................Allen & 2..................
Some good posts. Thanks...

2 - You do a good Archie Bunker ;- ) What a classic...

All - did you get your shorts in today ( hike-the-skirt ) ? EB's TA says todays gold movement bodes well for the Bear NOT el tro. There are only a few more shopping days left until X-mas. All aboard the last elavator...down...down...down...last stop, the basement.

Nicks-at-Nite - You be sure to sell a few calls you're a.m. Ya' hear! Get on board ( Canberra ) . It's time to throw some chips on the table...aren't you getting just a little itchy?? ;- )

Testicles ( testes, testing, ) - you say 310? I say bring it on! h es!


George Cole
(Wed Oct 15 1997 16:33 - ID#42953)
Hepcat: All your insults mean nothing to me. I will not stoop to your level. Since I am on this site to learn as well as opine, I still hope you will emlighten us on how you arrived at your earlier projection of $325 and your current projection of $310.

Why not share your obvious abilities with others on this site instead of wasting your time on personal attacks?

(Wed Oct 15 1997 16:36 - ID#431263)
KEV--I've been a subscriber of Nick's for a couple of years. His WALL STREET UNDERGROUND makes an excellent read but I gotta tell you his predictions over the last year and a half have been EXTREMELY BEARISH on stocks and bonds and EXTREMELY BULLISH on gold, oex puts, bond puts and stock index puts in general. Last year he was calling for AT LEAST an 8 1/2 % long bond. It was supposed to be a no brainer! Just give me your five grand scheiss and I'll make you 100 grand! Well guess what? We made it all the way up to 7.22% and promptly gave it all back and then some on the reflex rallly back to 6.5%! Lately it's been the no brainer stock index put game. Greenspan has told us what he's gonna do scheiss! Raise rates supposedly. Guess what? AG hasn't raised rates--YET! And the market has risen another 1100 pts since he called for DOW 4000 or lower by Fall. What I'm trying to say is: "GUARINO IS GENERALLY RIGHT BUT SPECIFICALLY WRONG!" If you follow his advice be prepared in the short term to SUFFER FINANCIAllY. MEthinks however that one of these days SOON he's gonna get right! And I for one intend to be there when he does!

(Wed Oct 15 1997 16:39 - ID#352177)
Call Exterminator.
American College Dictionary definition of 'tsetse'. " Any of the blood-sucking flies of the African genus Glossina, some of which transmit protozoan parasites ( trypanasomes ) which cause African sleeping sickness and other serious diseases."

(Wed Oct 15 1997 16:43 - ID#310407)
@George Cole & HepCat
George, while I don't always agree 100% with everything you say, your analysis fundamentals are some of teh best I've seen at this site. Certainly better than the "full Moon" predictions SOME folks make!! Now I've been critisized many times for being too ornery, but I surely hope that the new "HepCat" posts by Testes, Gertrude, et al, show clearly that me & Hep aren't in the same ballpark. I enjoy your posts for their insightful common sense and broad based look at the markets. Keep up the good work. Hey HepCat, far be it for me to call for censorship, but get yerself a clue will ya? I've made some good calls here in ADVANCE of the market moves, but tried to spell out my rationale. We havn't heard any from you. Let's have it dude.

(Wed Oct 15 1997 16:45 - ID#21198)
What was the closing price for this 1996 prediction? Anybody?

Date: Thu Sep 26 17:51
John ( ) :

Prediction: Gold to $350 by October 15.
This thing is languishing, folks.
It reminds me of 1993 before the jump

(Wed Oct 15 1997 16:47 - ID#57232)
@Work to Wichita Lineman and all
The Wichita Lineman: Excellent advice to all -- in my opinion, the only use for expert advice is to learn how to reason out what is happening for yourself. If you blindly take the advice of others, you tend to lose. The best thing to do if you are new at this, is to set up some of your own buy and sell indicators on whatever it is, and trade "fake" money for a year or so. I used real money some years ago and lost thousands in options, for example. Best to begin with mutual funds, then stocks, and then options if you are really good with them. Each individual will find on their own what they are good at, and lousy at. It requires patience and disciplne, too! You may find your significant other a good anchor to reality too. A supporter when you make money - and the voice of reason when you lose it!

(Wed Oct 15 1997 16:53 - ID#310407)
@Testes, Gertrude, estest,
All. Buy futures contracts in Lithium, Prozac, and Valium. HepCat has come back to life, and needs major medicating...Guess Cats DO have 9 lives after all.

(Wed Oct 15 1997 16:55 - ID#26793)
All: I have been rethinking my response to Wichita Lineman about what will happen to gold stocks when the Dow sell off. My answer referenced 1987 but I failed to point out significant differences between 1987 and now.

The most important difference is best illustrated by the Dow/Gold Ratio. As George Cole mentioned the other day in October, 1987 the ratio was around 6 on crash day and dropped to 4. Even with that drop it still indicated that stocks were the better investment ( wish I knew about the DG Ratio in those days ) The second point is that the XAU was at 145, a high number, at a time when gold was not the favored investment according to the ratio. A crash now with the XAU at 105, a low number, and the DG Ratio at more than 24, clearly favoring gold, would indicate a buying opportunity for gold stocks on any drop.

So in summary, in the event of a stock market crash gold stocks are likely to sell off less severely than in 1987; and I would expect them to bounce back quicker and move higher sooner. Comments are welcome.

(Wed Oct 15 1997 16:59 - ID#21198)
still wondering
No not the testy guy - I just wondered was that call good or bad?
Checked the Kitco 10 year spot chart - and it didn't look like that good of a call. ;-?

(Wed Oct 15 1997 17:16 - ID#225157)
To Bart
It seems that Hepcat has found FREE E-MAIL sites on the internet in order to receive new ID numbers. I wonder what would happen to Hepcat if BART was to use Silicone Investors format of charging a life time membership fee for those who wish to post on KITCO. I suggest a $5.00 fee, charged by Credit Card, with members true personal information and not the bogus information that can be put on FREE E-MAIL sites. Any comment Bart?? :- )

(Wed Oct 15 1997 17:22 - ID#26793)
Dow/Gold Ratio = 24.66

(Wed Oct 15 1997 17:23 - ID#239276)
Dammit, George, then LEARN.
Learning involves incorporating information
and making changes as necessary.
I have never seen you change except after
the fact to admit you were wrong.
This is not learning if the pattern is
constantly repeated.
LGB - I made it possible for you to be
on this site. Respect your elders.
You never made a prediction about
July 29 or about what CB was selling
gold before the fact or about T.IC
or about $325 or about where Flag
would be one year later ( five years
later, ten years later ) .
Whoever keeps bringing up the
$350 prediction: It was meant
to polarize the group at a time
when no one was allowed to make
negative predictions about gold
without being viciously attacked.
The number was not important, it
meant merely that gold was going down.
Gold did go down and kept going down.
I also made a prediction that Edmonton
was going to win the Gold Cup, so be
sure to locate that one and bring it
up as it befits your purpose. People
who can't admit when they are wrong
tend to point out what they see as
mistakes in other people's thinking.
You can paint me as ignorant/poor/inbred
all you want. It just makes your side
all the more suspect since you are
constantly incorrect. Truth ( and profit )
is on my side. Accept it and move
on with your lives.

(Wed Oct 15 1997 17:24 - ID#26793)
XAU/Spot Ratio = .320

(Wed Oct 15 1997 17:24 - ID#42994)
I've been following this site for many moons. No one knows my plan for gold. No, not one has a clue. It will go up and down when I say. Quit predicting and sit back and relax. It will come like a thief in the night.

(Wed Oct 15 1997 17:25 - ID#239276)
Peter - it's spelled 'silicon'
And as Bart knows, I am all for
such a policy. It would eliminate
all the silliness at this site.

(Wed Oct 15 1997 17:30 - ID#352177)
Donald : In 1987, with a sudden 500 point drop in 1987, there was panic in the markets and all equities got dumped, the babies along with the bath water. This time there is almost a daily discussion in the media of what to do in the event of a crash. So, hopefully, the market participants are better informed and better prepared. They are likely to dump the over priced equities, of which there is no shortage, and not gold shares which are already trading at multi year lows.

(Wed Oct 15 1997 17:32 - ID#26793)

(Wed Oct 15 1997 17:34 - ID#21198)
no longer wondering
O.K. I looked up the london PM fix for 10/15/96 it was $381.00.
This was roughly an error of about 8% which would give John a historical margin of error for the 10/23/97 predictions of roughly:
gold ( spot? ) $335 to $285
dow 7625 to 8975

Sorry to disrupt the forum. I was hoping to get some perspective on his predictive reliabilty since he won't let us know what his methods are.

(Wed Oct 15 1997 17:37 - ID#225157)
To hepcat
So Hepcat why do you have to get some many different aliass, if Bart is aware of your position on a membership fee.

(Wed Oct 15 1997 17:42 - ID#225157)
oppps ---- drop the me in some ----

(Wed Oct 15 1997 17:42 - ID#352177)
I happen to agree with Jerry Favors. It seems increasingly possible that the Dow, alone among the major market indicators, signalled a market top in August. Dow 8300 by October 23 is highly unlikely. So is gold 310.

George Glick
(Wed Oct 15 1997 17:48 - ID#377184)
Donald, Mike Sheller, JTF: I recently copied to the Captain of the PRIVATEER, a letter sent to the Editor of The Australian Financial Review
on Mar. 9, 1973 - another occasion when the US$ was experiencing trouble.
Viewing recent posts on Kitco, I thought it appropriate to share the last part of the letter.

The following is from Atlas Shrugged. "Excerpt from the speech by Francisco d'Anconia entitled: 'The Meaning of Money'. Whenever destroyers appear among men, they start by destroying money, for money is
men's protection and base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold has an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an

(Wed Oct 15 1997 17:48 - ID#323192)
Peter - Because I keep getting kicked off
when people pointed out as fallible run
to Bart and whine. For example, if I was
anyone else on this forum, I would run to
Bart now and say, "Oh Bart, please kick off
whoever is saying I was way off in my
prediction of $350 gold on October 15, 1996.
They are ruining my enjoyment of your
wonderful site, and I am starting to
get an upset stomach and cannot sleep
at night when I think of all those
people who were screwed out of there
life savings because of my wildass

(Wed Oct 15 1997 17:49 - ID#352177)
GSC : Something went wrong with my post. It seems that the Dow, alone among all other market indicators, signalled a market top in August and Dow 8300 by October 23 is most unlikely. So is gold 310. Report from Jerry Favors is at

(Wed Oct 15 1997 17:50 - ID#239183)
"There" is "their" in Cape Bretonese.

( what a card I am )
EBN gold up 10 cents.
Earl - goat turd hurled in your direction

(Wed Oct 15 1997 17:53 - ID#230276)
NJ is back
NJ is back

Welcome back, NJ. Are you sweating out October 23
now that you see how close we are? I didn't know
Jerry Favors controlled the market. You said
the Dow would never hit 8300 by October 23,
remember? NJ, is this victory ever going to be sweet.
Do you promise never to post again if the Dow goes
above 8300 on or before October 23, 1997?

George Glick
(Wed Oct 15 1997 17:54 - ID#377184)
fummer@missed the ending
My first time posting and the last part was not shown. Should have read-
Paper is a check drawn be legal looters upon an account which is not theirs; upon the virtue of the victims. Watch for the day when it bounces, marked 'Account Overdrawn'." Geo.

(Wed Oct 15 1997 18:01 - ID#26793)
The bank sector is at the top of the list of declining sectors. Bank of Tokyo-Mitsubishi Ltd
( 8315.T ) is the most heavily traded issue on the first section of the Tokyo Stock Exchange with
5.57 million shares, down 140 yen at 1,890.

0354 GMT - Softbank Corp ( 9984.Q ) down to 4,050 from its Monday close of 4,540, surpassing
its all-time low. Concerns over hefty debts at software distributor and publisher as a result of
aggressive business expansion are behind relentless slide in share price.

0123 GMT - Banks ( #0BNK.T ) fall depressed by news that second-tier Kyoto Kyoei Bank Ltd
is planning to transfer its business to another bank and disband.

Brokers said dissolving of cross shareholding and technical selling was also weighing down the

(Wed Oct 15 1997 18:04 - ID#57232)
Donald, Wichita Lineman: I agree with Donald that when the stock market really heads south, that the gold stock drop may not be as dramatic as it was in 1987, and the gold stocks will rise back up sooner, simply because gold/gold stocks are currently depressed. My concerns are:

1 ) I do not want to be in gold stocks when the market tanks.
2 ) Before the big one, gold bullion and gold stocks are going to
rally first, and the US dollar will almost certainly drop. Then
when the crash actually occurs the gold stocks will have more to
fall -- won't be a pretty sight if you're in them!

Mike Stewart
(Wed Oct 15 1997 18:13 - ID#270253)
When I look at my daily gold chart, I see a wedge that formed over several months. It broke out to the upside and is now retesting the upper trend line from above.

When I look at my favourite gold charts on a monthly basis, they are bouncing from very low risk, oversold positions that you only see every few years or so.

When I see the Kitco gang, it appears that people are throwing in the towel for now.


(Wed Oct 15 1997 18:15 - ID#57232)
@Work wondering about those Japanese banks
Donald: The complex Japanese corporate interlocking system is unraveling, at least among the Banks. This is likely to depress all the Japanese Banking stocks. Any news of that 10trillion US$ in Japanese savings coming to the rescue? I'm wondering if that is 10trillion in paper ( ie, stocks ) ,and not real money! Only in Japan could something like this unravel without causing a market collapse!
I am still sitting on the edge of my chair wondering about that key international Japanes bank that could trigger a currency crisis! Hope your powder is mostly dry, just in case!
I still think the wild card is how much debt is outstanding in China. Hope their banks haven't squandered hundreds of billions of foreign capital.

mike stewart
(Wed Oct 15 1997 18:18 - ID#299327)
When I look in my underwear, I see a wedge that formed over several months.

(Wed Oct 15 1997 18:25 - ID#21198)
Sorry, I missed your point - took that prediction out of context I guess. I had only wondered what your record was outside of the 325 bulls-eye. No references were forthcoming from anyone. The 9/26 was the only other one I could find. Moving on & outta here, I can ban myself too - I've wasted too much bandwidth already. BTW all my predictions have been wrong - faire well.

(Wed Oct 15 1997 18:34 - ID#57232)
George Glick: Appreciate your post from "Atlas Shrugged". This is part of A Greenspans philosophy, despite his current title. For all of our sakes lets hope he's got a workable scheme to put us all back on a solid, traceable-to-gold-bullion standard for the US$. Of course that will not protect us from the past inflation not yet factored into the gold price -- only future.

George S. Cole
(Wed Oct 15 1997 18:50 - ID#383132)
@wearing my rose-coloured glasses
Encouraged by everything today despite the drop
in gold and gold stocks. Whoop am I happy.
Remember that 1000 point drop in the Dow I
predicted? I'd almost forgotten about it
in my exuberance over how well gold is doing
despite the fact that gold is not doing very
well. I expect that gold will bounce off this
latest bottom as I have predicted for the last
30 days each and every day. Keep your powder
dry. This gold bull is moving onto the runway
and is ready for take off. Keep buying and
keep remembering if gold drops any more to
keep forgetting what I posted the day before.

Flannel Man
(Wed Oct 15 1997 18:57 - ID#290222)
Perverted Hepslut -
Why don't you take your demented, childish fun elsewhere in the mental ward and see if you can't work off your boner at another site, you juvanile swamp loser. This is a site for gold and sports and telling
people when they have email, capice? Maybe you should look out because
there are a lot of people at this site with guns and a lack of common
sense, moron.

(Wed Oct 15 1997 19:02 - ID#241277)
Oil and Gold
ANOTHER ( or others ) ...if you are out there, I would like to pursue your thought in Red Baron's post ( LBMA - 5 ) re: gold and oil. I would like to understand how gold may be being used a medium of exchange for Middle East oil as I believe you implied. If as you suggest oil is really trading at $19US+XXX units of gold from CB liquidations and sale to the Arabs then this would suggest that oil prices are being artificially depressed. But why? Could it be that the Fed and other CB are afraid that rising oil prices would result in inflation and thus the need to raise interest rates and burst the euphoric stock bubble? And could it be that the Royal Dutch Shells and Exxons know of the coming global oil production peaking as early as 2005 ( even without factoring in increased demand in China and India ) thus suggesting a price push in oil prices ( although future markets don't seem to suggest the threat of a production peak ) , thus causing inflation ( ala 1973-74 ) ?

If you or others have any insights into this connection between gold and oil, it would help many of us at Kitco at least attempt to cling to the coattails of the bigger fish.

George Cole
(Wed Oct 15 1997 19:05 - ID#42953)
new lows increasing
LGB: Thanks for your encouragement! I also find much value in your posts.

All: The number of new lows jumped to 30 today. Very bad news for the bulls if this trend continues. Market internals starting to weaken. If we get to 100 or more, look for some steep downside action quite soon.

(Wed Oct 15 1997 19:06 - ID#26793)
( From Steve Kaplan )
The U.S. government's sale of silver American Eagle coins in the first nine months of 1997
totaled 2,291,000 ounces, up 65.1% from the same period in 1996, while the sale of gold
American Eagle coins during the same period totaled 461,750 ounces, up 187% from the
same period in 1996.

George Cole
(Wed Oct 15 1997 19:08 - ID#383132)
new lows increasing
LGB: Thank you for your kind words. It seems I don't
get a lot of those lately except from people who feel
sorry for me. All: I don't know what the hell I'm
talking about, but "new lows" is a new indicator I've
come up with to prove it. When every stock hits its
52-week low, you can be sure we are in a bear market.
Until then, keep your powder dry, or whatever.

george cole
(Wed Oct 15 1997 19:09 - ID#383132)
the real one
All: Previous posts from George Cole pretender are not me.
The six digit ID is the key.

Bob M
(Wed Oct 15 1997 19:09 - ID#26059)
Thanks for your posts is going to take quite a calamity to break this stock market mentality..probably a far greater blow than we can imagine right just seems like everything bad that has been predicted over the last 15 years or so,,always turns out good, like the Gulf War, communism, weather threats..we have really not had a severe shock in this nation probaly sine the oil embargo..and before that probably point being that a major shock of some sort will be the death of the stock long as things stay the way they have been..the bull will keep charging...

(Wed Oct 15 1997 19:14 - ID#26793)

George Cole
(Wed Oct 15 1997 19:15 - ID#383132)
Shut up, you fargin bastage. I will not stoop to your
puerile antics, preferring instead to stick to my
amateur, misleading analyses. But I will depend on
you and change my position when it is clear you are
correct. Oh, and instead of acknowledging you, I
will tip my hat to Oldman, who doesn't even exist.

Mike Sheller
(Wed Oct 15 1997 19:15 - ID#347447)
As in grey suit, or jammies?
FLANNEL MAN: Thank you so much for glorifying us Kitcoites. We'd do the same for you some dark night, I'm sure. GEORGE GLICK: ( 17:48 ) That quote from Atlas Shrugged sure said it all, didn't it. BART, & ALL: If we are to suffer the indignity of wearing numbers like common criminals and social security card-bearers, then at least purge us of those who would use another's name wrongfully, and without permission. This is especially disgusting when people give their true names on a public forum because they have bigger b*lls than some of the juvenile twits who are always lurking under nearby rocks. Please check out the 18:50 post.

gorge cole
(Wed Oct 15 1997 19:19 - ID#383144)
@now I'm really mad, except I'm encouraged by the lack of freefall in gold and the XAU today
Bart - now someone has my ID and is posting under it.
Please kick everyone off this site except me. Could
we call it the GSC wonder site for gold and everything

George Cole
(Wed Oct 15 1997 19:20 - ID#37855)
@not gsc just testing

(Wed Oct 15 1997 19:22 - ID#26793)

Stephen Mooney
(Wed Oct 15 1997 19:24 - ID#239276)
I am really Bart Kitner.

RJ Snider
(Wed Oct 15 1997 19:25 - ID#362156)
I am really Bart Kitner

(Wed Oct 15 1997 19:26 - ID#206183)
I am really Bart Kitner

(Wed Oct 15 1997 19:28 - ID#212132)
Which one of these three, or others, is/are Bart Kitner?
Find out the shocking truth tomorrow.
Same bat time, same bat channel.

"I would have never believed it"
-Gene Siskel, Chicago Sun Times

"He had even me fooled"
-wife of Dead DeGuzman, decomposing

(Wed Oct 15 1997 19:28 - ID#255151)

True story--I just got a "Special October 1997 Issue" of "Strategic Investment" in the mail today. This is the letter by James Dale Davidson and Lord Rees-Mogg. This thing must have been written before July. Guess what their top choice was? The Malaysia Fund! Said this fund is up 23% and "nearly immune" to the dangers plaguing Wall Street. Nice call Mr. Davidson! Needless to say, I won't be subscribing.

(Wed Oct 15 1997 19:33 - ID#32598)
Is it a full moon or what?

I believe GSC's real ID# from one computer is 42953 ( not that it matters )

george s cole
(Wed Oct 15 1997 19:36 - ID#383132)
(not gsc, just testing)
I firmly believe that I am not GSC, but am just testing

(Wed Oct 15 1997 19:36 - ID#26793)

(Wed Oct 15 1997 19:51 - ID#391142)
@ a good buy?
HEAVY volume with price rise in Brush Creek Mining BCMD on reports of gold find. Anyone think this is still a good price ( 1 5/32 ) after the 3/4 price move made today?

(Wed Oct 15 1997 20:03 - ID#310407)
@HepCat, Crash
Puetz was right, there WAS a crash today. HepCat has finally succumbed to a complete mental breakdown. Hey Hepcat ( and all your many dozens of "new" handles including, all your false posts under others names ) . I take back everything I ever said in defense of you being allowed to post. In your case Bart was right. An exception needs to be made. Never thought I'd see the day I had this opnion, but you've convinced me. I hope you'll be getting help soon Hepless cat. Meanwhile, I'm sure that Bart, tolerant though he may be, will catch on to you and lock you out once again.

(Wed Oct 15 1997 20:09 - ID#23483)
@old stuff
bankrupties,bond market up/down, stock market up/down, unemployment, full/half/no moons, wars/rumors of wars/peace, el nino/no el nino,
fed speeches, interest rates up/down, listening to all of the md's, jd's, phd's, master, bachalor, and no degrees, central bank sales, large national debt, and rather large ETC, One hundred bucks says gold will be between 325-335 tomorrow, next week, one month, and into next year. IT ISN'T GOING NO WHERE!!!!!!!!!!!!!!!!

(Wed Oct 15 1997 20:22 - ID#252312)
@Home re: ANOTHER ?gold sales for oil?
Zardoz: re your 19:02 post about gold sales to hold the price of Oil down a la ANOTHER . Several days ago I did a back-of-the-envelope calculation of how much gold would have to be given annualy to the oil producers if 1/3 of the oil price was subsidised by gold sales. I then determined whether annual reported CB sales could account for this. It was nowhere nearly enough! Either some Central Banks are lying about how much gold they are selling, or we have been misinformed.
I suspect the truth is that only a few oil producing countries demand gold from their weaker customers, and not any of the G7. We now have another question for ANOTHER.
Zardoz -- why don't you check my calculations? I just determined the world production of oil in barrels, multiplied by the price of oil and divided by 1/3 ( the cost to be purchased in gold ) I then determined for the same year the total dollar value of all official Central Bank sales.

(Wed Oct 15 1997 20:26 - ID#32078)
hepcat is a twit
Congratulations to FLANNEL MAN for explaining the infantile methods of the local bozo, who doesn't even invest his money and his posting are just hot air which are generally worthless to any serious investor.

I wish he had enough guts or integrity or smarts or manhood to post under his own name so I can avoid his cow patty of limited brainpower.

Sorry for this, Bart. I couldn't help it.

(Wed Oct 15 1997 20:28 - ID#252312)
@Home - an identity crisis at Kitco?
With all the posts tonight, I am not even sure I know who I am! I wiln need to check my number after I post to see that I am still me! Isn't it fortunate that reality is sufficiently well-constructed that this doesn't happen in real life!

Seriously, it looks like we have a rather unusual virus on Kitco. Full moon?

(Wed Oct 15 1997 20:34 - ID#252312)
@Home -- Multiple identities tonight
George Cole: ( the real one ) I fear our visitor has had a meltdown, but I do not know how to call for medical assistance on the web. We should all be tolerant tonight. 911?

Dumb as nails
(Wed Oct 15 1997 20:49 - ID#262198)
@ mad as hell
They'll never figure out who I am--- right "Hep"

(Wed Oct 15 1997 20:50 - ID#431216)
I like to see opposing points of view on this site.
For once I'd like to see Hepcat's reasons in
forecasting 3-2-5...or he should leave.

Bob M
(Wed Oct 15 1997 20:53 - ID#26059)
When analysts look back at this particular time we have been living in, they will surmise that the major factor for the accumulation of debt in the US will be attributed to the bull market in stocks. A large , large portion of that money has come into the market via credit cards and 2nd mortgages: in the case of credit cards indirectly by using the cards to subsidize their daily expenses while maxing out the old 401K..ultimately this will bring down the economy for 2 reasons.#1-once the debt load becomes too great, there will be no money left to spend on products as most will be tied up in tax defered plans, thus choking off the "goose that lays the golden eggs". When the companies realize sales are headin south..bye bye stock gains, and bye bye to the profits that everyone was counting on to bail them out. #2-the new tax law regarding exempting profits from the sale of a primary residence ( most with 10% or less equity ) up to $500K for a married couple, is beginning and will throw the real estate market into a tailspin as the supply and demand balance is being severely tested..real estate signs are popping up like weeds all over the US,,but you have to have buyers..therefore, both pillars of the average Americans wealth are built on sand, not bedrock..and both their fates are intertwined and will go down hand in is inevitable..when? Thats anybodies guess, but neither trend can be stopped...

(Wed Oct 15 1997 20:57 - ID#431216)
Earlier Mary Stewart described a couple of gold charts.
The price of gold is doing just what you would expect
it to do at this point ...retreating to the point of breakout
This will most likely be a low volume affair.
Probably quite dull ,unentertaining and the move
away from this point will be rapid when it comes.

(Wed Oct 15 1997 20:59 - ID#263259)
I am not George Cole, but respect him greatly!
It would seem to me that the gold markets' behaviours the last 90 days has been the sort of low volume pseudo randomness which comes at the early accumulation phase of a bull market. And the overall stock market this year hasn't had the accelerated logarithmic growth which would indicate a developing supercrash, but rather ( if we go back to the p/e+bond yield+inflation ) is a fairly valued market. But in a fairly valued market all the worst things can happen. It can overheat or go flat or go down 20%, sometimes within just a few weeks of each other.

(Wed Oct 15 1997 21:04 - ID#364147)
@ Full moon on the ocean
Spectacular!!...Palladium news:er 15, 1997

Palladium Futures Prices Soar
Amid Russian Supply Concern


Russia is back to haunt the palladium market again, causing prices to
rocket Wednesday on the New York Mercantile Exchange.

All palladium contracts shot up the Nymex-imposed limit of $6 as
concerns over Russian supplies revisited the market. The nearby
December palladium futures contract settled the day at $215.45 an ounce.
Cash palladium was quoted late Wednesday afternoon in New York at
$219.00 an ounce, up $10.05 from late Tuesday.

"Russia hasn't offered any palladium for sale in the last couple of days in
the spot market and auto-catalyst manufacturers are getting concerned that
Russia may not have enough palladium," said Bette Raptopoulos, a metals
analyst at Prudential Securities in New York.

Palladium is used for a number of industrial purposes, including
semiconductors and catalytic converters. Fabricators sometimes buy the
physical metal in the cash market from Russian government agents.

Russia -- the world's largest producer of palladium -- didn't export any of
the metal for the first half of this year, sending palladium prices flying to
17-year highs.

Meanwhile, gold and silver declined on profit-taking, despite bullish
fundamentals, traders said. "It is a lit

(Wed Oct 15 1997 21:10 - ID#252312)
@LBMA - How much gold sales for 1/3 world Oil prodcution?
To all ( and ANOTHER ) :
First: Total oil production in dollars: 65million barrels/day ( 1997 )
( 65*10**6 ) * 265 * 22$/oz = $378 billion/year
1/3 of this is:= 126 billion dollars worth of Oil to be purchased with
gold each year.
Second: Total world gold production available from all sources in 1994:
86million oz * 380/oz = $32 billion
Third: Total IMF Central bank gold holdings in 1995:
905million oz* 380/oz = $340 billion

The entire IMF gold supply would be exhausted in three years if 1/3 of all the Oil sold in the world was bought with gold. Did I make a mistake in my math, or have all of the IMF countries sold their gold? Highly unlikely!
I think we have "another" question for ANOTHER.

(Wed Oct 15 1997 21:11 - ID#431216)
We're beginning to see a substancial pickup
in physical gold sales ,at least in terms of
sales of gold and silver coins and in fact
there has been more than a doubling in purchasesd.
At the same time the US equity market has gotten
kind of dull...perhaps it'll miss the runway,
and not crash ,in a long a slow burn.

(Wed Oct 15 1997 21:20 - ID#364147)
@ EB
Couldn't agree with you more!! ----is IT really that obvious?? Hope ya caught that game---a classic! Bring on the Marlins!...and by the way Fernandez only played cause the Bipster was hurt...Dec. gold up .20

(Wed Oct 15 1997 21:23 - ID#263259)
This is a test. Ignore this post.

(Wed Oct 15 1997 21:30 - ID#411259)
..... Stuff .....

George Cole wrote: "Hell when the gold bull is underway, people who won't touch it now with a 10 foot pole might well buy at $1000 as long as they are convinced the trend still is up."

We finally agree! You are absolutely on target with your take on heard mentality. Brokers at my firm had a hard time selling silver at 4.50 in 1979, but people were literally lined up in the parking lot with briefcases filled with cash to buy it at $40 +. The heard mentality is, for the most part, what causes bull markets.

The Rest-
I don't know what the fuss is about, this new/old boy testicle fellow has now announced what I have been consistently saying here for months. Gold will make new lows this year while the Dow will continue its rise. There will be no equities crash this year. Rather than all this market masturbation of self styled seers, I have gone into great detail about my reasons for the drop in gold. More importantly, I'm backing it up with trades. I got a little eager with my gold shorts at 322 and 324, but the recent rise to 338 allowed me to double up. I'll be in nice profits at 320 ( next week? )

I spoke with a client who has strong European business connections, and has just returned from Europe. He raised the possibility that France is the current major seller of gold. I have suspected all along that Germany would be a seller this year, but I have not ruled out France or Britain. By the way, England will not join the EMU - not going to happen.

Testicle weenie hairy balls nuts guy-
Feel free to gnash and snarl and spew forth you own particular brand of spittle. Like a little gold bug fellow after and before you, I will not acknowledge or respond. Have fun boys

(Wed Oct 15 1997 21:30 - ID#431263)
Here we go again! Palladium up another $4.00 quick bucks! Platinum followin suite! Could this be Russia's new strategy to turn industrial metals into the precious stuff? Never thought I'd see the day when my Russian ballerinas would be worth more than my American Eagles! Maybe that day is closer than I think! Technically, gold and silver have done what they need to do--come back to support and HOLD! Now if they can only
attract some volume on the upside they may yet break thru on the upside and light up the night sky like that big old full moon is doing tonight!
Now that HK is tanking together with the rest of SE Asia, the US market cannot be far behind as corporate profits are sure to tank along with 'em. No wonder Slick Willie is gallavanting around Latin America looking for markets. Between a stagnant Europe and a deflating Asia corporate America will need as many healthy markets as it can loan into existence!
AG has got his hands full! Maybe he'll retire after all! Then watch the economic fireworks!! Time to dollar cost average into the hard stuff!!

(Wed Oct 15 1997 21:31 - ID#335190)
Bre-X @ Alberta court
October 15, 1997
Alberta judge clears way for Bre-X shareholders to sue company directors

CALGARY ( CP ) An Alberta judge cleared the way Wednesday for two groups of Bre-X shareholders to sue current and former directors of the company to try to recover $140 million they allege was pocketed through insider trading.
Justice Robert Cairns of the Court of Queen's Bench granted leave to a
group of investors from Alberta and Ontario to launch the so-called
derivative actions, even though Bre-X Minerals remains under court-ordered bankruptcy protection - which expires Oct. 31.

(Wed Oct 15 1997 21:33 - ID#403267)
@n.w ButYou'll just love this story
n.w. I can't help it, it warms the cockles of a goldbugs heart:
ednesday October 15 10:16 AM EDT

Brush Creek finds high grade gold ore

GRASS VALLEY, Calif., Oct 15 ( Reuters ) - Brush Creek Mining and Development Co Inc said
Wednesday it encountered a high grade enrichment in pillar number one of its lower Brush Creek

The gold ore in one segment of the pillar was rich enough to be taken from the mine in 5 gallon
buckets that were deemed jewelry-grade, the company said.

It said negotiations are in progress with a wholesale jeweler who has expressed interest in buying the
gold at well over the spot market price.

Pillar no. 1 is one of 10 pillars believed to exist above the Cassidy level of the lower Brush Creek
Mine in the Alleghany/Downieville district of Northern California.

``We are very pleased to have encountered our first pocket of high grade ore,'' chief executive
James Chapin said.

As is normal in the district, ``much of the high grade that we extracted was running over 500 ounces
per ton. While this is a very exciting development, on average our more modest goal is that the
pillars will produce one ounce of gold for every ton of ore milled.''

The company also said the 2211 raise which is being driven through the no. 2 prospective ore block
towards the no. 4 pillar had encountered enriched zones which contained visible gold. The raise is
currently at the level of the no. 4 pillar.

The company is drifting off the raise and expects to encounter the no. 4 pillar this week.

Arthur Smith, Brush Creek's staff geologist, said ``As we drift toward the pillar, we are encountering
significant galena which is known to be the best indicator mineral for gold in our district because it
precipitated contemporaneously with the gold.''

Brush Creek said it has encountered favorable indications that a parallel ore shoot about 300-500
feet to the south of the Golden Gate ore shoot it has been exploring for may exist.

Stan Griffith, Mine Superintendent, stated, ``Certain of our preliminary indicators suggest that
perhaps the parallel ore shoot that we now believe exists in the lower Brush Creek may be nearly as
high grade as the Golden Gate ore shoot that we are currently mining.''
What do you think, Bre-X in California or the Mother Lode? I could not stop myself from buying a little "just to be there". Could care less if it goes to $20 or back to 10 cents, whatever, this is for the fun of it!

(Wed Oct 15 1997 21:35 - ID#30896)
Larryn - The fact that you didn't recognize that Flannel Man
was me posting under an alias shows: a. How gullible
you are. b. How easy this is to do at the Kitco site until
Bart institutes a policy similar to SI.
LBG - For once, I have to agree with you. I think Bart
should kick me off, and find some way to stop people
from posting anonymously using the

(Wed Oct 15 1997 21:38 - ID#403267)
6pk, 500 ounces a ton!
Even Bre-X couldn't claim that! In california yet! See my previous post, this is a gas one way or the other!

(Wed Oct 15 1997 21:42 - ID#263259)
re Peter's 17:16 post
Bart: This sounds like a good idea. You could call it a 'club membership fee'. BTW, did you ever implement a way of using credit cards to purchase casting grain from your refiner? Your prices are better than Rio Grande's but they take CC's and their shipping is cheaper to my city.

(Wed Oct 15 1997 21:44 - ID#197304)
boilermaker city

How low is new lows? what about silver?

EB Please.... Your latest musings on corn????


(Wed Oct 15 1997 21:48 - ID#60253)
Reprint from post:

" Now all govts. dont get gold for oil,
just a few. Thats all it takes. For now!"

(Wed Oct 15 1997 21:49 - ID#197304)
boilermaker city
Would somebody tell me what IMHO, IMSHO etc. means??


What is the SI site you referred to??

(Wed Oct 15 1997 21:53 - ID#364147)
In my humble opinion=IMHO

(Wed Oct 15 1997 22:06 - ID#298147)
Where is everyone tonight

(Wed Oct 15 1997 22:12 - ID#252312)
RJ - You are consistent as always. French gold sales? Germany next?
I agree with you that the US market will not crash by itself -- this year, anyway.
However, I am worried about two things: Bad mainland China loans, and runaway worldwide derivative trading.
Have you seen the post on R Dornbusch, the MIT professor, who studied loans by mainland Chinese banks? His comment was that there was virtually no regulation of who got what! If there are hundreds of billions of bad loans using foreign investors money - the western world is indeed in trouble. Even the president of the World bank alluded to this! If we survive the next 3-6 months, I am back in the stock market to ride the baby boom to 1999-2000, when we may have our real crash!
With regard to derivatives we are at $60trillion USD and counting, doubling every two years. The OTC part is what worries me -- there is no way this will be regulated in the near future. The LME/LBME guys for example can just move to Istanbul or some other site if the regulators step in.
What is your take on these items?
Thanks in advance JTF

(Wed Oct 15 1997 22:13 - ID#411259)
..... "New Lows" .....

The next announcement of a large CB gold sale will take gold below 310. I expect 300 to hold the first time around, and a $20 - $30 rally hard on the heels by. If Germany or France is the major seller, gold will break through 300 with a target of 280. It is here that the speculative bears will rule. The shock of a G7 nation selling large amounts of gold will keep the longs at bay, leaving the road open for the bears to slam gold for as much as they can get. I will be among these sellers and I offer no apologies here. The smoke should have cleared by early 1998. It is there I will find myself finally on the same side of the table as GSC. I think the first six months of 1998 will offer the best chances for gold profits. I will look to buy gold myself at the "new lows"

(Wed Oct 15 1997 22:23 - ID#342273)
Re: Federal Reserve Ownership
The 12 fed. banks are owned in part by the national banks in their respective areas ( they must buy stock ) . In this case ownership does not denote control. All profits of the banks ( and hence the system ) - about $15-20 billion/year is turned over to the U.S. Treasury. All top officers are appointed by Gov't. The Federal Reserve is run to serve the country. The FDIC is a separate agency.

(Wed Oct 15 1997 22:29 - ID#391142)
@ enjoy the ride Roebear
Brush Creek Mining purchased the gold site for less than $500,000. What a return on investment. Will buy shares and enjoy the ride up
and be quick to take any profit.

(Wed Oct 15 1997 22:30 - ID#18970)
RJ buddy a rumor of CB gold sales means nothing than just a just back drop to explain well timed ( at least til now ) Wall St raids. CBs have little gold they can part with or have parted with through loans. Aussie's sold gold and look what happened to their currency. This is known or at least not lost on our STRONG Euro friends. The gold suppression talk is Wall ST Bond talk.

(Wed Oct 15 1997 22:31 - ID#348286)
RJ: Interesting to read the thoughts of a bear. Your points are valid and the outcome may very well be as you say. I've been watching the market action very closely for the last couple of weeks, and the it seems every attempted rally is very quickly rebuffed by the traders. Hard to find reasons to go long now.
Also im almost convinced that a major CB is dumping quietly, basically same game as the Aussi sale. It will be anounced after completion.
The only wildcard for the near term is an unforeseen major world event.

(Wed Oct 15 1997 22:31 - ID#411259)
..... Suffer the Children .....

Isn't it nice we all have our own, inviolate ID number? Children may post their fantasies at will, but the number tells us the post is not genuine. I too would be happy to pay for posting rights. I think a $5.00 fee is too low. $20 should be high enough to stop the kind of nonsense we have seen here lately. I have never shied away from a fight worth fighting. I have occasionally been drawn into silly fights that serve no purpose. No more of this silliness for me, I opt out. Let the little boys play and spew.

One can usually form an accurate opinion of a person's worth and mettle by reading enough of their writings. One may lie when one writes, but the truth shows through, between the lines, for all to see.

I have nothing but pity for these small people who occasionally choose this site to off load their misplaced anger. True, it is pity that hurts them most, for it is here that these sad fellows sometimes glimpse their own desperate shortcomings. The buzz and smoke of the fight allows them to forget, for a moment, how unhappy they are. The non-confrontational response, or better yet, inattention to their venom, leaves them boxing their own shadow, in full face and force of their own pathetic selves. These revelations invite some into the exhaust filled garage, or over the railing of a forty story building. I wish nothing so harsh as all this. I would rather, they would look at themselves and, for just an instant, see themselves as others see them. Here, and only here, can they choose to change and improve, or to bite the bullet. The world would be richer with either choice.

Enough said about all this. One thing I do respect GSC, and Sheller, and others here: is their constant occupation of the high road. I can aspire to nothing so lofty, but I can at least keep myself out of the gutter. A lesson well taught.

(Wed Oct 15 1997 22:37 - ID#411259)
..... My sources do not report rumors. Must I say it again? .....

OK, Here goes 200+ metric tons of gold have been sold by a European CB over the last six weeks. This is history. That you have not heard of it, does not make a rumor. Count on it, the gold was sold, the announcement will follow.

(Wed Oct 15 1997 22:40 - ID#344308)
and the wind blows-------


you have not factored flux and chaos into your
perfect picture! look at the world balancing
quite precariously upon the precipice of chaos,
duly precipitated by the recent un-precedented
bull market in equities.

ALL expansions are followed by contractions.

for every action, there is an equal and opposite reaction-------
somebody famous

a major contraction is in-bound! timing and position.....

lions and tigers and eb, oh my! here toto-------away!

hep-rat--swoosh----thowck!-------thanks, i needed that.....

cherokee!; ) hoarder-of-the-call-of-the-gold-------

(Wed Oct 15 1997 22:44 - ID#403267)
N.W., maybethebackforty
N.W. SI has a thread for BCMD which seems singularly free of hype for a stock like this. All talk of shorts, PR, matter of fact they seem down right critical. I got in at 1 and like I said, fun money only, don't bet the farm. At 14.7 million shares, over half the float, something will happen tomorrow and I don't think it will be boring, gap time one way or the other! Good luck, sorry I don't know which way it'll go!

(Wed Oct 15 1997 22:49 - ID#228262)
on a sad day for this Site
Mike Sheller, your 19:15 post said it best.

(Wed Oct 15 1997 22:49 - ID#246224)
All - What I see in this market is a suckers' churn. All the individuals are pouring their remaining money into mutual funds while all the large players are selling into this 'demand'. Its a see-saw; an oscillation, a channel. We are hearing alot about the "massive inflows" of capital into funds in September. But we are not seeing it rock the market. I believe that is because some big players are selling to the suckers and glad to have them there to buy. Warren Buffet is a signal in his bond purchases. He's not the only big guy to finally turn away from the market to other venues. I feel that we will see a continuing churn until all the big players are as divested as they can be and the small players are fully invested with nothing left to buy with ( exhausted all reserves and credit ) . Then bombs away. This is why the market will not go back up to or past 8300. There is an even flow of money from small guys into funds into stock purchses, from the powers who are then going elsewhere with the money they just raked in. If this were not the case then the market would rocket upward.

Gold and silver are being accumulated as the posts today on coin sales indicate. I'm amazed that you guys have been able to affect the stats that much. It was you Kitco-ites wasn't it? Anyway, we've got a nice little trickle started. It will grow as these folks start to crow about their holdings at the water fountain. Others will watch/wait until they see gold and silver rise. They will then start asking about how you buy gold coins and who from, etc. The local mart here just jumped his selling premium on silver 1 oz coins 2 cents this week. He said it was an increase from his supplier. Must be that his supplier is finding it hard to find supply. Its the same as a market price increase to me. Any way. It took me about a month to get into buying and so I suspect most here took some time to educate themselves before they started buying the real stuff. It take people time to switch their modes. But when enough of them do it ( those darn baby boomers ) they will do it right. And we'll all be smiling ( except Hep with his ridiculous 3-1-0 ) .

Hepcat - Really. What will you do when you are discredited here with all your wild strangeness riding on the line? I suppose you will have to join the likes of those you have castigated ( just about anybody with a trace of authority ) . You know its not bad being wrong on occation. Most are and will be. Even you. So turn over a new leaf. We'd love to have you join the club here rather than fight it all the time.

(Wed Oct 15 1997 22:49 - ID#261118)
@ RJ'n all
Done then, you say 200+ tons have been sold; ok. Soooooooo someone bought that 200 tons; it's been absorbed and between short covering a week or so ago when we saw the rally and today's close we've seen all that 200 tons can do, no? RJ, when amounts of that sort are sold ( or GOING to be sold ) ,the insiders know it; so why did'nt we see a more significant decline?

(Wed Oct 15 1997 22:52 - ID#403267)
RJ If you are right about your call on the gold sale, well, what kind of Hershey Bar do you want for Christmas!: )

(Wed Oct 15 1997 22:53 - ID#261118)
@ roebear and all Canadian enthusiasts
Talked to the Toranto exchange today and they say their to have a web page ( s ) up'n runnin next week or so, , and prices are to be updated every 15 min.,dont know of any other features.

(Wed Oct 15 1997 22:55 - ID#298147)
@ Este
Boo hoo cry baby

(Wed Oct 15 1997 23:00 - ID#411259)
..... ?!? .....

" Flux and chaos" are part of any picture. The whole world is always on the brink of collapse. The concerns you speak of are not new, nor are they unique. The virus that causes colds is ever present, we breathe it everyday. Why do we not have a permanent case of the sniffles? One can always look at the world and find reason for disaster, yet disaster is kept at bay for years, even decades on end. The trick, is to live in the good times, and leave yourself protected for the bad times. These are not mutually exclusive concepts. Otherwise, you spend your whole life cowering in a hole. Which is better?

More Gold-
Follow those lines of thought, and ye shall prosper..

So far, the Asian currency crisis has not translated into firmer gold, or increased concern by the rest of the world. I still look to China as the biggest market ever to become available for trade. The old farts will die off soon and the next batch will probably want to join us all in the new millennium. By the way, I saw "Seven Years in Tibet" last night. I highly recommend this film. If you are looking for thrills and chills, see another. If you are in the mood for a thoughtful, enlightening, and simply beautiful movie, spend the seven bucks to see it. You know how some films are meant to be seen on the big screen? When they get through chopping it up and reformatting for TV or video, the vision is destroyed. This is a big screen film. You will walk from the theater with more questions than when you arrived. The only other recent film I can say this about is, "Contact".

(Wed Oct 15 1997 23:04 - ID#261118)
@ Roebear, again
Forgot to ask; what's BCMD? All JTF said pre 87 crash gold shares had just about doubled when crash took'em down again but this time gold shares are sooooooo out of favor ( almost NO market cap whatsoever ) they may fare better in a steep downturn. For one thing, much of what's popular in exploration and even juniors nowdays can't even be MARGINED! Not to mention that most gold shares of this sort are in very STRONG HANDS whereas in 87 the goldbug metality was still in vogue. I think these shares might survive better than you might think.

(Wed Oct 15 1997 23:09 - ID#288352)
For Tortfeasor - with utmost respect
A judge enters the courtroom, strikes the gavel and says, "Before I begin
this trial, I have an announcement to make. The lawyer for the defense has
paid me $15,000 to swing the case his way. The lawyer for the plaintiff has
paid me $10,000 to swing the case her way. In order to make this a fair
trial, I am returning $5,000 to the defense."

(Wed Oct 15 1997 23:10 - ID#252312)
More Gold: It looks like your and my sentiments are similar -- too early for a gold rally, and the bull stock market in trouble.
Will it be an unexpected banking collapse from the deflation in SE Asia -- easily 1/3 of the world's equity markets, will it be the runaway OTC world wide derivatives trading, or will it simply be declining earnings in the US market? ( I forgot to add the last one ) .
I for one will not return to regular US equity stocks until the SE Asia situation is behind us, and the US earnings situation brightens. International US stocks will probably weather best the low-cost SE Asia goods coming to our shores. I will however, always be looking behind my shoulder at all that world wide derivative trading, now at 60 trillion/yr with a two year doubling time, and no end in sight.

(Wed Oct 15 1997 23:12 - ID#288352)
on a roll
in order to cjheck my ID i just had to post twice. So here is one
for Kitkoites that deal with brokers

A Stock Broker opened the door of his BMW, when suddenly a car came
along and hit the door, ripping it off completely. When the police arrived at
the scene, the broker was complaining bitterly about the damage to his
precious BMW.

"Officer, look what they've done to my Beeeeemer!!!", he whined.

"You brokers are so materialistic, you make me sick!!!", retorted
the officer. "You're so worried about your stupid BMW, that you
didn't even notice that your left arm was ripped off!!!"

"Oh my gaaawd...," replied the broker, finally noticing the bloody
left shoulder where his arm once was, "Where's my Rolex?!!!!!"

TTFN: Sinclair

| Previous | Next | Respond |

Emily Letellier
(Wed Oct 15 1997 23:13 - ID#228220)

What's all this talk about CBs selling gold? I mean, what the heck are they doing with all that gold in the first place? You don't hear about ABc and NBc selling gold! Why doesn't CBs just stick to broadcasting and leave gold to the market.......What?......Oh!........that's different...........Never mind.

(Wed Oct 15 1997 23:15 - ID#411259)
..... Chocolate? OH, MY! .....

Each and every CB sale over the last two years was followed by an announcement of the sale - already accomplished and absorbed - yet each announcement precipitated a major drop in the price of gold. The speculative shorts need this type of event to take control. Otherwise, each drop finds bargain hunters. There are many here who would discount this likelihood. They have not learned from the past. At least you did not ask, "If someone sold, someone bought, so why does the price go down?" I have seen different forms of this question many times here. Why do any prices fall? Each and every sale of anything has a buyer on the other side of the deal. Life isn't that simple.

Forget the chocolate, it will ruin my figure. What I will really need at X-mas time will be a new skirt, I'll be hiking this one way up the next go around!!!

(Wed Oct 15 1997 23:17 - ID#348286)
@Bart Kitner
Bart: I think it's time for formal registration ( with a valid e-mail address ) and passwords for all posters at this site.
The system at Silicon Investors and other sites works well.
Hope it's feasable........

(Wed Oct 15 1997 23:19 - ID#411259)
..... Hee Hee Heeeeeee ......

The best laugh I've had in days.

(Wed Oct 15 1997 23:20 - ID#57232)
@Home - thanks RJ
RJ -- appreciate the post. My wife of 21 years was born in Shanghai -- I do agree with you that the single biggest market for US goods is China. In fact, China is likely to be the next leading world power, probably eventually replacing the US if we do not mend our ways. Also when the average Chinese is wealthy enough to buy large quantities of gold -- watch out western world! They have over two thousand years of experience with runaway currencies. But, as you said, no sign in the gold market yet, and not until SE Asia is on firmer economic footing again. But this time around they will be more cautious about putting their wealth in paper.
Thanks for the comment on "Seven Years in Tibet" I will see it.

(Wed Oct 15 1997 23:21 - ID#225157)
RJ were you aware of Australias 167 tonne Gold sale and their announcement in July. Did you post it in the same manner that you have posted this current CB Gold Sale.

(Wed Oct 15 1997 23:24 - ID#433171)
500 year cycle
The 500 year cycle is almost due. Anyone have any knowledge as to what we can expect. "Reliable information" not just from ANOTHER. So far no one has posted anything on this subject. I believe we are now entering significant period in time where a major change in trend will get underway.

(Wed Oct 15 1997 23:26 - ID#228128)
RJ: How is it that you are so positive about the 200 tonne gold sale. Was this printed in the news? Did I miss something while I was in Wyoming?

(Wed Oct 15 1997 23:34 - ID#232412)
with all the name changes going on here will the real CB chairman please stand up?

(Wed Oct 15 1997 23:39 - ID#344308)

too much is happening too fast for
the game to be played 'as usual.'
history is fixing to repeat itself
a'la 1939. it's a carbon copy with
the exception of the number of players
and their sophistication. people will
know, after the fact of course, who
the insiders were/have been for-ever--
ie...rockefellers, morgans, rosthchilds,
etc.. and that they bought most of what was sold
at a penny on the dollar.
the em-bitterment of the multitudes will re-kindle
the seemingly ancient pictures of the super-wealthy
in the post depression years. currently the financial
gurus on wall street and the super-rich are looked-up
to for their successes. when the fat lady sings, again,
these same wizards will finally be considered as the vermin they
have been all along. the money will be gone, and the
rich will have theirs, AND yours.

look at the angst amongst the masses and the financial gurus.
every-one knows IT is coming. it is as if a cobra has trans-fixed
a rat with his stare! ---whop----you just got bit on the nose!!

cherokee!; ) slayer-of-the-snake---

let the cb's, blt's, AND crt's sell,
time and events will over-take their
agenda, thus changing their agenda,
to one of buying hand over fist.
time is short----

where's that hole rj?

(Wed Oct 15 1997 23:41 - ID#57232)
More Gold: What information source have you been monitoring that leads you to conclude that gold is now being sold by a central bank? The only information I have is that the effective EMU/ECU deadline is not till Jan 1988, and that AG will probably sell gold to prevent a gold rally during the turbulent 10th anniversary of the 1987 crash. But I have nothing specific. Obviously I have been looking in the wrong places.

(Wed Oct 15 1997 23:42 - ID#316193)
Attention all Kitco guards: Password tonight is e.mail address!! If
garbage given for e.mail address, SHOOT. Enemy has infiltrated!!

(Wed Oct 15 1997 23:43 - ID#232412)
Interesting side note to Donald's 1900 post regarding increase in sales of American Eagle coins, The Coin Dealer Newsletter of Oct 10 says that dealers are using the recent run-up in silver prices to unload $1000 bags of 90% silver coins. I talked with Eastern Smelting and Refining 2 weeks ago, and they said inquiries and volume were up based on the higher spot of silver.
Bart: What are your silver refining volumes looking like?
Perhaps the dealer market is getting rid of 8-10 months accumulation os silver scrap.

COMEX levels have held at 137 million oz. this week. When level drops to 90-95 look for major price movement to 7.50/oz, and then the market will dump more silver scrap/coins on the refiners. Support levels will be key to increased prices over the next 3 years. Economic recession would depress prices since silver is primarily an industrial metal now.

(Wed Oct 15 1997 23:44 - ID#57232)
Cherokee -- sometimes I think you offer the best advice of all to the rest of us -- if only we could see what you see!

(Wed Oct 15 1997 23:49 - ID#57232)
@Home 1939?
Cherokee : did you mean 1929, or 1937?

(Wed Oct 15 1997 23:53 - ID#411100)

Remember, between 00:00 and 04:00, you might have to
scroll all the way past the posts of Oct. 15 to get
to the new posts for Oct. 16.

(Wed Oct 15 1997 23:54 - ID#36965)
Joke of the Day
Sinclair, your joke reminds me of the following one regarding legal ethics. It seems this woman found a law firm on the street, went in and desired a will without creating a file for fear of her husband and requested that she be permitted to pay cash for the service. The lawyer always happy to have cash on the hoof so to speak told her that the fee would be $100.00. She pulled out a $100 dollar bill, gave it to the lawyer and left. After she left the lawyer to his surprise noted that the $100 which he had been paid had another $100 dollar bill stuck to it. Hence the ethical dilemna. Should he tell his law partner or not.

(Wed Oct 15 1997 23:56 - ID#344308)

oh hell--the 1st great crash ( stocks )
dora where are you?

see---people never KNOW AS MUCH AS YOU think they know!!
who said that?