Cyb Jeddak - Why would a move to $280 be bullish?

away...to question this statement

ewildered

Mammoth hit by non-stop quake swarms; volcano watchers on alert.
http://quake.wr.usgs.gov/recenteqs/Maps/Long_Valley.html

South Korea embarks on harsh financial restructuring
SEOUL, Nov 24 ( AFP ) - South Korea on Monday embarked on a harsh
financial restructuring plan, ordering 12 merchant banks saddled
with huge bad debts to merge by the year's end, officials said.
"An order has been sent to 12 of the country's 30 merchant
banks, asking them to merge with other healthy institutions or issue
asset-backed securities by the end of December," a finance and
economy ministry official told AFP.
The ministry named the 12 merchant banks as Daehan Investment,
Samsam, LG, Gyongnam, Samyang, Hangil, Coryo, Hansol, Yeungnam,
Kumho, Shinsegae and Kyung Il.

South Korea embarks on harsh financial restructuring
SEOUL, Nov 24 ( AFP ) - South Korea on Monday embarked on a harsh
financial restructuring plan, ordering 12 merchant banks saddled
with huge bad debts to merge by the year's end, officials said.
"An order has been sent to 12 of the country's 30 merchant
banks, asking them to merge with other healthy institutions or issue
asset-backed securities by the end of December," a finance and
economy ministry official told AFP.
The ministry named the 12 merchant banks as Daehan Investment,
Samsam, LG, Gyongnam, Samyang, Hangil, Coryo, Hansol, Yeungnam,
Kumho, Shinsegae and Kyung Il.

...second week of December should give the final low in long bond rates,

start of the breakdown of North American stocks first bearleg down till end of January.Bullion gold and silver should hit 335 and 7 .

Deflation worldwide will bring precious metals down to a low of

280 gold around April.That will be the time to load up.

Hello TR:

As a back-of-the-envelope approximation, 500 troy oz. of gold would have a volume of about one U.S. gallon ( four liters ) .

How is Tyler TX these days? I lived there eons ago.....

test 123

...second week of December should give the final low in long bond rates,

start of the breakdown of North American stocks first bearleg down till end of January.Bullion gold and silver should hit 335 and 7 .

Deflation worldwide will bring precious metals down to a low of

280 gold around April.That will be the time to load up.

From an earlier post, thanks, I nominate Allen Sinai for the Irving Fisher "Harken-Lemmings" award for taking his foot out of his mouth just long enough to replace it with the other one ...

http://www.yahoo.com/headlines/971123/business/stories/stocksweek_1.html

BTW to those who lived through it, the Depression was not "so called"


"What we are seeing is the bust side of a decade long boom with a dose of
financial fragility and asset deflation," Allen Sinai, chief global economist, Primark Decision Economics said. "Japan might have recovered without the Asian meltdown but it can't recover now."

There are mitigating factors that should prevent a repeat of the catastrophic consequences that led to the global market panic in the 1930s and the so-called Great Depression.

"Things are different now," Sinai said. "The rest of the world is in good shape and only one third is in a state of siege."

He said the United States is very resilient and "we have lots of cushions to absorb shocks like these."

There is a silver lining for the United States.

Sinai said the United States stands to gain a great deal from the competing devaluations of currencies in Asia, which are triggering other competitive devaluations.

"Internationally, the United States is getting richer by the moment," he said. "With all of those currencies in Asia having declined so much, our purchasing power is much greater and Asia has now become the bargain basement of the world."

aurator@bargainbasement

and a great idea too SDR, this "who's gonna fall first...."

Who's gonna point their toes skywards, falling off their perch?



I go for Deutsche Morgan Tentacular group. Why? Well if you're into slander I'm into Numerology and otherwise----it's an ornithological thing. looking for the silver lining.



Off to do some exercise to "get in shape" for Mr Sinai

To All

Random thoughts and a few numbers - please check if

wrong.

One ton of gold = 10 Million$ ( 300*32*1000 +or- )

Above ground gold = 85000 tons = 850 billion$

CB Holdings = 25000 tons = 250 Billion$

Skorea Bailout = 100 Billion ( seems low )

Yamaichi unsecured loan ( ???? ) = 190 Billion

Total = 290 billion - more gold equivalent that

ALL CB hold - GeeWhiz

OK now its nice to have RESERVES in perilous times

like these - But guess what - the US debt instrument

reserves are NOT really reserves since ( wait for it )

you cant SELL THEM - IF you do, US gets mad and rates

go up and economy will stop. It was fun kidding yourself

for years that these bits of paper that the US printed

( and then printed the interest on ) were "working"

reserves - but REALLY now how do you EXPECT a

RESERVE to yield interest since you dont lend it

to anybody??

So what next - where does the money come from ??

OK SELL the gold - that covers SKOREA and Yamaichi.

Now what will we do next week ?? If I were a

central banker, I'd move to another country.

If that might be the case....maybe this scenario will be played out at your local theater soon

""For years, as long as the Japan's Nikkei stock index kept going up, it wasn't considered to be a problem for the banks," said John Geraghty of North American Equities Services, a consulting firm.

"But at the current level of 16,000 points, the Nikkei is down from its prime of 40,000, and the banks are only marginally able to stay alive with loans in the billions of dollars.

"If the natural forces of economics continue to drive real estate values down as well as the Nikkei, both of those switches will be turned off, and the banks' assets will not be sufficient for keep them in business," he said.

He said that Asian investors have been buyers of U.S. stocks over the last four years of explosive gains, and Wall Street could face a scary scenario if the Japanese banks start to write off their loans and the U.S. market becomes part of that liquidation sale.

South Korea Seoul Composite ^KS11 1:02AM 450.64 -34.79 -7.17%

To All

Random thoughts and a few numbers - please check if

wrong.

One ton of gold = 10 Million$ ( 300*32*1000 +or- )

Above ground gold = 85000 tons = 850 billion$

CB Holdings = 25000 tons = 250 Billion$

Skorea Bailout = 100 Billion ( seems low )

Yamaichi unsecured loan ( ???? ) = 190 Billion

Total = 290 billion - more gold equivalent that

ALL CB hold - GeeWhiz

OK now its nice to have RESERVES in perilous times

like these - But guess what - the US debt instrument

reserves are NOT really reserves since ( wait for it )

you cant SELL THEM - IF you do, US gets mad and rates

go up and economy will stop. It was fun kidding yourself

for years that these bits of paper that the US printed

( and then printed the interest on ) were "working"

reserves - but REALLY now how do you EXPECT a

RESERVE to yield interest since you dont lend it

to anybody??

So what next - where does the money come from ??

OK SELL the gold - that covers SKOREA and Yamaichi.

Now what will we do next week ?? If I were a

central banker, I'd move to another country

John Disney, your maths looks fine re "value" of CB holding. 25 -28,000 tons, seems about right, but although it does not feature in your calculations, you have above ground gold as 85,000 tons, is this "available" gold, rather than all gold mined, which is usually given 125,000 tons approx?

Also, back to the Ag/Au ratio, if I may. There was a reference at kitco from a market commentator that the Ag/Au ratio was no longer watched -- remember, I'm contrarian, and yesterday I found an old Essay From Jim Turk about the ration which I'll post shortly. I would appreciate hearing comments from you or anyone else about the Ag/Au ratio and work you've done recently. Thanks in anticipation.

Yes, the meeting of the Northwest branch of Kitco was an astounding success. Present were the venerable DJ and his wife and that sage of diplomacy and tact BillinOregon & Mrs BillinOregon. Reify's name was mentioned along with many other Kitco regulars. Fine food was consumed, good drinks were guzzeled and the world situation discussed. There being no solutions found to the world dilemas, the meeting was adjurned and all particpants returned home. Although President Clinton was in town, he was not invited.

Reify, congraulations on the new grand daughter, looks like we will be seeing you in May.

Cyclist -- would love to see the charts your predictions are based on. Precious metals UP to Jan., DOWN to Apr., then good buying at the bottom. Sounds good to me as I am a trader. Just love this up and down stuff.

G'day Auratious. D.M.G. had better not go bust, mate, as they are my futures brokers. They are not allowed to. I think the historical G/S ratio will hold ( eventually ) . With silver at $10 that would be nice for gold.

John Disney -- G'day to S.A. They will bail out the Korean paper problems with more paper. Sort of like when you have 10 credit cards and use the least pressing to pay off the most pressing. Eventually the whole scheme collapses. I seriously doubt whether the IMF has enough assets to bail out the world's bad debts. Have you got some info on the IMF's available assets?

In light of recent Yamaichi Securities closure, don't be surprised to read this in tomorrow's headlines:

Japanese government has declared a "banking holiday".

John Disney

Turk on Ag/Au ratio

http://www.goldmoney.com/fgmr/195.htm

For All Goldbugs

Turk on Gold Sophisms

http://www.fame.org/research/library/jt-001.htm

Nick@C Naaah, mate, it's the stuff that starts netrumour. We all have to hone our critical facilities now. Look at every piece of news, smell it, wonder where it came from and how much is real, and, above all be pleased we didn't step in it.

Great Clarity of thought is needed, JTF, you blaze a fine trail.

Aurator -- just read the report you posted, written on Nov. 25, 1996 wherin they recommended the following:

"More importantly, if you are a value oriented
investor, time will likely prove that anyone accumulating Gold ( and Silver too for that
matter ) at today's prices will have made a sound decision."

Gold was then selling for @$380. In the long run accumulation at those prices shall probably prove to be wise-- but there must be a lot of followers hurting pretty badly right now at $305. A lot of patience is required to ride out a 17 year old bear. This aptly explains why I, like so many others, choose to be a trader. Buy and hold can be rather devastating. On the positive side, gold appears to be at bargain basement prices right now. A few of the better gold shares have shown signs of bottoming. I've traded many gold shares in the past week for good profit. It is possible to make money in a bear market. You have to take profits quickly and regularly and ALWAYS get out if your timing is wrong. I spent several hours reviewing Aussie pissant gold shares today. Many have lost 90-95% in value in the past year. They are priced at "close down the mine" or "never to be put into production" prices. IF and WHEN gold recovers, many of them will be ten baggers+. IF gold doesn't recover, many will be worthless and go bust. I believe in cycles. I believe gold will recover. I am buying tremendous bargains on "gold bad news days." Many are up 20-50% since mini-crash day bottoms ( some 100% from m.c.day lows ) . Many island reversals on the charts. BARGAIN or BUST???? As the Chinese say "May you live in interesting times."

Australia's biggest gold miner, Normandy, is listing in Toronto this week. It will be interesting to see the reaction to our "jewel" that will soon approach 2,000,000 oz/annum. World's fourth biggest gold miner. I own 'em. Hope many of you guys/gals will too. Sorry, Bart. I ain't toutin' gold shares ( LIAR!! ) . OK-- so it's 4:30 in the morning-- nobody's gonna read this anyway!!

If I have tempted any of you, look up more info on Normandy. Right now the price is much lower than your big Tiger Fund paid for their 11% of the company. Such a deal.

http://www.normandy.com.au/

Looks like Europe doesn't like the Yamaichai news and is trying to pre-empt the US Markets.
http://www.ebn.co.uk/Markets/Stocks/

-119.92
-3.03%

Austria
ATX
^ATX
5:10AM
1266.01
-25.01
-1.94%
Belgium
BEL-20
^BFX
5:09AM
2388.48
-30.93
-1.28%
Czech Republic
PX50
^PX50
5:00AM
487.7
-1.4
-0.29%
Denmark
KFX
^KFX
5:09AM
190.99
-0.64
-0.33%
Finland
Helsinki General
^HEX
5:10AM
3501.78
-59.59
-1.67%
France
CAC 40
^FCHI
5:10AM
2819.83
-41.87
-1.46%
Germany
DAX
^GDAX
5:10AM
3858.67
-101.02
-2.55%
Greece
General Share
^ATG
5:09AM
1410.02
-28.72
-2.00%
Hungary
BUX
^BUX
Nov 21
6961.20
0.00
0.00%
Italy
MIBTel
^CMMG
5:10AM
15129
-223
-1.45%
Netherlands
AEX General
^AEX
5:10AM
883.92
-14.69
-1.63%
Norway
Total Share
^NTOT
4:48AM
1283.38
-4.21
-0.33%
Portugal
BVL 30
^BVL30
5:09AM
3432.94
-26.67
-0.77%
Russia
Moscow Times
^MTMS
Nov 21
768.66
+21.48
+2.87%
Slovakia
SAX
^SAX
Nov 21
169.85
0.00
0.00%
Spain
Madrid General
^SMSI
5:00AM
587.50
-8.49
-1.42%
Sweden
Stockholm General
^SFOG
4:49AM
2968.03
-49.19
-1.63%
Switzerland
Swiss Market
^SSMI
5:10AM
5641.0
-84.5
-1.48%
Turkey
ISE National-100
^XU100
5:00AM
2982.00
-95.00
-3.09%
United Kingdom
FT-SE 100 Cash
^MFNX
5:10AM
4893.70
-49.80
-1.01%

Nick are you still holding those put warrants on our banks?
ANZ Asia risk factors?
Could be good as gold.
NDY LHG AAA etc look like absolute bargains.
Unless we crash.

Bulls eye Thanksgiving on Wall Street
Copyright  1997 Nando.net
Copyright  1997 Reuters


NEW YORK ( November 23, 1997 3:41 p.m. EST http://www.nando.net ) - Wall Street stocks will probably push higher this Thanksgiving holiday-shortened week, with investors' confidence recovering from worries over Asia's financial crisis.

Have kept a modest number of NAB and ANZ puts, mate--insurance you know. I reckon the golds have got a lot less distance to crash as they have crashed already. The bank puts are good for another 18 months so will hang on for deep deep crash protection. Bought a pile of Normandy on Fri.a.m. and am up 10% in a day and a half. How anyone could sell em that cheaply 48 hours before the Toronto/Montreal listings is beyond me. I don't think we'll see them that cheap again in our lifetime. Lihir going for under $1.60 -- the biggest/low cost gold mine in the world? Now all we need is a bottom in you know what!!

Clinton plays down crisis as new setback hits Asia


Copyright  1997 Nando.net
Copyright  1997 Reuters

 Clinton predicts movement toward fast-track approval
 Protestors seek to place social issues on APEC agenda
 Mexico advises Asian countries to face up to currency crisis
 IMF promises to help ease South Korea's financial crisis
 Toys are serious business at APEC trade talks

VANCOUVER ( November 23, 1997 9:59 p.m. EST http://www.nando.net ) - U.S. President Clinton tried to play down Asia's economic crisis Sunday ahead of a Pacific Rim summit, but even as he spoke another financial disaster hit the region.

"I think this is a time for confidence in the future of Asia," Clinton said during a news conference at the Asia Pacific Economic Cooperation ( APEC ) forum. To underline his relaxed air, he then joined two other leaders for a round of golf in the driving rain.

November 24, 1997
Market just as damaging as communism-Mahathir

VANCOUVER ( Reuters ) - Total reliance on market forces to run an economy will do just as much damage as the discredited central planning policies of communist governments, Malaysian Prime Minister Mahathir Mohamad said Sunday.

Mahathir, in Vancouver for the annual summit of the 18-member Asia-Pacific Economic Cooperation forum, has long railed against currency speculators for being responsible for the financial turmoil which has been tearing through the region since July.

"Surrender your independence to those who know best and you will prosper. This is the creed of the market," he told businessmen. "Thus the swing from the government knows all...to the market can do no wrong...is now as extreme as communism and socialism of yesteryear."

Market forces depend on self interest which in turn is not far removed from greed, he said. " ( Following the financial turmoil ) two decades of growth was wiped out in two weeks...industries have been forced to close down, unemployment has gone up, infrastructure projects been halted...and governments have been reduced to begging for aid from the IMF," Mahathir said.

His comments are in contrast to those of the International Monetary Fund and a number of officials in the region who have seen the turmoil as a helpful, if painful, reminder that despite surging growth many Asian economies need more reform.

The financial turmoil has threatened to shift the focus of the APEC summit away from the planned agenda of trade liberalization, but most officials during the meeting have warned against using it as an excuse to impose restrictions.

"Noone in his right mind can say that the present situation is better than when the economies of these nations were booming...the sufferings are now far greater than before," he said.

"It is unfortunate that we seem to have jumped from the frying pan into the fire. We had socialist and communist states and their central planning, also sacrosanct, which for 70 years condemned millions to misery...now we have the ideology of the market," Mahathir said.

Market forces relied on self-interest which in turn was not far removed from greed. The fact is that neither the government nor the market can work well on their own, he said.

"Absolute power corrupts. As much as government can become corrupt when invested with absolute power, markets also can become corrupt. We are seeing the effect of that absolute power today: the impoverishment and misery of millions of people and their eventual slavery.

"The choice for the world is not absolute power for the government or for the market. The choice is cooperation and collaboration between the government elected and responsible to the electorate and the market with its stress on efficiency, competition and the bottom line," Mahathir said.

Nick
Looks like they're preparing for the worst.
--------------------------------------------------------------------------------
NYSE proposes changes in circuit breakers - WSJ
http://biz.yahoo.com/finance/971124/nyse_proposes_change_1.html
NEW YORK, Nov 24 ( Reuters ) - The New York Stock Exchange has proposed that circuit breakers be activated after stock prices fall 10 percent and 20 percent, the Wall Street Journal reported on Monday.

The Big Board's proposal would almost triple the drop in stock market prices that would halt trading on the nation's stock and stock-derivative exchanges.

Quoting people familiar with the matter, the newspaper said that NYSE representatives aired the proposal at a meeting Friday of the nation's stock, options and future exchanges and the Securities and Exchange Commission.

The percentages proposed would represent 788 and 1,576 points on the Dow Jones Industrial Average, based on Friday's close -- two to nearly three times the current 350 and 550 point levels that triggered the circuit breakers for the first time, on October 27.
-------------------------------------------------------------------------
ASIA 2020 - Big money needed but funds seek reform
http://biz.yahoo.com/finance/971124/asia_funds_1.html

ASIA 2020 - Pulling the curtain on Asian economies
http://biz.yahoo.com/finance/971124/asia_transparency_1.html

Taiheiyo Sec sees no direct impact from Yamaichi
http://biz.yahoo.com/finance/971124/taiheiyo_sec_sees_no_1.html

FOCUS-Japan broker Yamaichi
http://biz.yahoo.com/finance/971124/focus_japan_broker_y_1.html

TSE says to halt some Yamaichi Sec trading
http://biz.yahoo.com/finance/971124/tse_says_to_halt_som_1.html

Hungarian shares open 4.39 pct down on Yamaichi
http://biz.yahoo.com/finance/971124/hungarian_shares_ope_1.html

CORRECTED - CORRECTED-Absa says to close 70 branches to
http://biz.yahoo.com/finance/971124/corrected_absa_asaj__1.html

FOCUS-S.Korean markets tumble as IMF talks start
http://biz.yahoo.com/finance/971124/korea_markets_pictur_1.html

Yamaichi says group liabilities Y6.7 trln end-Mar
http://biz.yahoo.com/finance/971124/yamaichi_says_group__1.html

Japan set to ease Yamaichi-related 'dollar crunch'
http://biz.yahoo.com/finance/971124/japan_yamaichi_crunc_1.html

UK's FTSE 100 drops one pct on Yamaichi fallout
http://biz.yahoo.com/finance/971124/uk_s_ftse_100_drops__1.html

FOCUS-Seoul, IMF to get down to business next week
http://biz.yahoo.com/finance/971124/korea_imf_1stld_pict_1.html

FOCUS-European markets fall on Japanese failure
http://biz.yahoo.com/finance/971124/markets_europe_1.html

Nick@C : Please post if you know the symbol in Canada.

NJ the symbol for Normandy in Australia is NDY. The Canucks will add a couple of letters to that ( ask your broker ) . Closed at $1.38 today. Canuk price will be ten times that -- use Special Drawing Rights???

FOCUS - Yamaichi hits yen and European shares
http://biz.yahoo.com/finance/971124/markets_europe_3.html
Nervousness about fallout from the Asian crisis strengthened the Swiss franc and gold as safe-havens.

Gold may sell-off big time if it cannot do better than it has with the recent news, particularly at these low price levels.

Russia Today is a service of EIN

*****I wonder how that got there?*****

Police investigators were perhaps not surprised to unearth a small treasure -- over 22 kilos of placer gold and 134 gold coins from 1980 -- in the garden of a woman living in Nakhodka, in the Far Eastern Primorsky region. The officers were investigating three murders linked with gold miners in Magadan. And the woman? A relative of a suspect in the case. -- Interfax, Oct. 31
http://www.russiatoday.com/rtoday/special/absurd.html

November 24, 1997
President weeps,workers fume as Yamaichi goes bust

"I really feel sorry for our employees. I sincerely hope you will give them support to find new jobs," Nozawa said. Many employees complained they were kept in the dark until the last minute and even after the announcement were uncertain of what lay ahead.

"No one has been in touch. Like quite a few others I was in the office on Saturday trying to find out what was going on, but we had no news from Tokyo, an unidentified senior non-Japanese manager said in London.

"I can't say anything as I've not been informed of what's going on," said a Yamaichi employee as he waited outside Tokyo for the final board meeting to end. "I hope the responsibility of top executives will be pursued to the fullest as they led the company to failure," he added.

"To my disappointment, I was not informed of the crisis in advance although I'm an executive," another headquarters staffer complained.
http://canoe2.canoe.ca/ReutersNews/JAPAN-YAMAICHI-SCENE.html

http://www.yahoo.com/headlines/971124/business/stories/oil_1.html

THERE IS MUCH LEFT TO HAPPEN IN FOREIGN MARKETS YET

With an estimated $200 billion in accumulated nonperforming loans - five times the equity capital of all Chinese banks - China's banking system is essentially insolvent. At least 50% of China's state-owned companies are in the red, constituting a far larger chunk of the economy than failing companies representin any other Asian country.

WILL the smart Chinese again seek sheltert in the currency, which has served them well for over 3,000 years: GOLD?
http://www.gold-eagle.com/editorials/dines112497.html

Joke du Jour - compliments of Reuters & Nando News:

"Mexico advises Asian countries to face up to currency crisis"

...the kettle calling the stove black

Then suddenly,

in the middle of the day, the Federal Reserve did

what's called a coupon pass, which means it put

permanent liquidity into the banking system by buying

Treasury securities owned by banks.

The amount was $1.44 billion, a little more than the

coupon pass on Thursday. For the week, the

estimates are that the Fed took $5 billion to $6 billion

of securities off banks' hands in exchange for cash.

Why is the Fed throwing money at banks? Is it

because banks, like Chase Manhattan, lost a lot of

dough trading derivatives during the Asian market

turmoil? Or is the Fed secretly trying to get banks to

lend that money to consumers and companies so that

the economy picks up? This would, in effect, be a

substitute for lowering interest rates.

http://www.nypostonline.com/business/1122.htm

Then suddenly,

in the middle of the day, the Federal Reserve did

what's called a coupon pass, which means it put

permanent liquidity into the banking system by buying

Treasury securities owned by banks.

The amount was $1.44 billion, a little more than the

coupon pass on Thursday. For the week, the

estimates are that the Fed took $5 billion to $6 billion

of securities off banks' hands in exchange for cash.

DON'T LOOK NOW, BUT

MONEY SUPPLY IS UP

By JOHN CRUDELE

THE Federal Reserve has been neutral in its monetary

policy lately - not raising or lowering interest rates.

Right?

Well, that's true in one sense. But wrong in another.

Each month or so, the Fed's Open Market Committee

meets and soon afterwards, an announcement comes

out that Alan Greenspan and the rest of the Central

Bank governors have decided to keep the Fed funds

rate at the current level.

"Whew!" says the world, and we all go back to our

business.

But some people are wondering why the money

supply is growing more rapidly than the Federal

Reserve intended, and whether this indicates that

Greenspan isn't as neutral as he lets on and is really

flooding the monetary system with liquidity.

I'm afraid I won't have the answers on this one, only

questions. Mr. Greenspan hasn't confided in me on his

secret moves in many, many ... well, actually, it's been

never.

Friday was a good example of what's been going on.

The bond market was getting hurt because the U.S.

trade deficit was bigger than expected. Then suddenly,

in the middle of the day, the Federal Reserve did

what's called a coupon pass, which means it put

permanent liquidity into the banking system by buying

Treasury securities owned by banks.

The amount was $1.44 billion, a little more than the

coupon pass on Thursday. For the week, the

estimates are that the Fed took $5 billion to $6 billion

of securities off banks' hands in exchange for cash.

Why is the Fed throwing money at banks? Is it

because banks, like Chase Manhattan, lost a lot of

dough trading derivatives during the Asian market

turmoil? Or is the Fed secretly trying to get banks to

lend that money to consumers and companies so that

the economy picks up? This would, in effect, be a

substitute for lowering interest rates.

If the Fed is jamming money into the banking system

through these repurchase agreements, it would be, in

essence, a loosening of monetary policy and not the

neutral policy the Fed's public statements would

indicate.

And if the Fed wanted banks to have a lot of cash on

hand, that would explain the very unusual action in the

nation's money supply of late. Even with a big drop on

Thursday, compared to this time last year, the broad

money supply figure known as M3 has grown by

nearly 9 percent. The Fed's target growth is believed

to be only between 2 percent and 6 percent.

When financial markets were rational, back in the old

days, people used to live and die by money supply

figures. Lucky for Alan Greenspan nobody pays

attention anymore.

Whatever happened to that proposal a few months

back that we invest Social Security money in the stock

market?

It was given lots of publicity when a commission made

the suggestion, but nothing has been heard since. It

was a stupid idea, of course, because investing in the

bubble market is the surest way to make sure we all

end up working until we are 100. But dumb ideas

have been carried forward by Washington before, so

I'm surprised this one died such a quiet death.

Alan Greenspan talked again last week about

reforming the Social Security system, which is destined

for bankruptcy about two days after I start collecting.

But "Irrational Exuberance" Alan never once

suggested that the reform include risking Social

Security money in the stock market.

Strange, why is the stock market a good idea for my

401K money but not for my Social Security funds.

Alan, give me a call.

Good mornin all! Looks like a bad day for paper so far....S+P futures down 6.80~~~~~~~~

Well...what do we think of this....avid chatter:

Merrill Lynch metals analyst Ted Arnold told a conference in London today that he
believed central banks would remain a permanent supply factor in the gold market and
spot prices would average annually between $310 and $290. .......... "In our strongly
held view, the price trend for gold will remain sideways to lower for some years to
come," he said........... site link ....This sounds like the 1960s when Lyndon Johnson
was telling the world that the US had enough silver to keep the price of silver at $1.29
forever. What did it take 2 years to sell it all?

Gold, silver consolidate prior gains
http://www.cnnfn.com/news/knight_ridder/2270.1.html
The end-of-the-week move, buoyed by speculators seeking to accentuate a looming market squeeze, dealers suggested, stabilized today, and silver was unable to sustain an overnight creep up to $5.51. By late morning, spot metal was trading at $5.46-5.48.

"Silver's looking very bullish and we remain pretty confident of seeing it at $6.00, maybe not in the next week, but possibly in the New Year," one source said.

Mr. Crawford's call of something bad right after Thanksgiving is starting to look ominous.

YAMAICHI SECURITIES - 4th largest securities firm in Japan throws in the towel - BUSTED!! - KAPUTT!!!- BANKRUPT!!!!

Yamaichi has Yen24 TRILLION in Customers assets -- THATS US$190 BILLION!!!! Yamaichis liabilities TOP US$200 BILLION!!!! Who is going to be the PATSY and foot the bill to make the customers whole again?!

A Nippon financial giant has fallen - it has requested from the Ministry of Finance to be allowed cease operations. Therefore, it must dump all positions.

If forced to shut-down, Yamaichi Securities must liquidate all positions. HOW MUCH US T-Bonds does it have in portfolio??? See what the ultimate CONSEQUENCES will be for Japan, Land of the Rising Sun:
http://www.gold-eagle.com/gold_digest/kutyn112197.html

Avid Chatter....Whatta thought!!

if the failure of 'yama' is good, will merrill's be better

I believe if you check the record you will see that Merrill Lynch did not turn bullish on gold until it hit $750 plus the last go round. No kidding.

Japan bank crisis wounds U.S., but not critically

By Clelia Oziel

LONDON, Nov 24 ( Reuters ) - Concerns that Japan's banking crisis may lead to a major liquidation of U.S. Treasury bonds are unnerving investors but analysts said on Monday a large selloff did not look likely yet.

Unless Japan's woes claimed more financial victims after the demise of Japan's fourth biggest brokerage, Yamaichi Securities, Treasuries should remain the obvious destination of funds fleeing Asia, they said.

The abrupt shutdown of Yamaichi on Monday triggered selling of the yen and yen assets.

The possibility remains of a mass repatriation of foreign bond holdings, but the chances of this happening were dampened after reassurances from the Bank of Japan ( BoJ ) of a ``smooth enclosure of the firm.''

``I don't think it's going to result in a major sell-off in Treasuries,'' said Adam Chester, treasury economist at Halifax in London.

Yamaichi would have a significant inventory of Treasury holdings in its foreign portfolio, but these would be small in relation to the overall size of the Treasury market.

``The U.S. Treasury market is $3.6 trillion. Yamaichi's losses are estimated in total to be about $8 billion. Of that a relatively small proportion would be foreign assets,'' he added.

``The problem in Japan at the moment is not a liquidity crisis. Japanese banks can borrow money now for virtually nothing. It's a structural problem associated with the nature of the banking system.''

Data from the U.S. Treasury showed that as of August 31, Japan was the biggest holder of Treasuries with 25.1 percent of foreign holdings, or $321.2 billion.

Chester said domestic investors in Japan would continue to favour JGBs despite historically low yields, unless problems in the banking sector snowballed, and the Bank of Japan was squeezed into a liquidity shortage.

Yamaichi told Japan's Ministry of Finance ( MOF ) on Monday that it would suspend its operations and eventually shut down, becoming the biggest corporate failure in Japanese history. Another bank and a brokerage house also went under recently.

Japanese authorities are debating whether to use public funds to clean up the financial mess and help boost the yen and Japanese shares.

By 1100 GMT, the 30-year long bond stood at 100-22, slightly easier than the Chicago settlement on Friday, with the yield just above the key 6.0 percent level at 6.075. Tokyo was closed on Monday for a public holiday.

December JGB futures were down 15 basis points in London at 129.40.

Economists said the crisis in Asia would slow down growth across the world, and lead to steepening of bond curves as investors become less confident of monetary tightening in the United States and Europe.

``In the medium term, the U.S. will outperform Europe. Near term, Europe will outperform,'' said Jan Loeys, global fixed income strategist at J.P. Morgan in London.

He said further banking failures in Japan could lead to a credit crunch, while expectations of disinflation would be supportive for Treasuries.

Analysts say the Bank of Japan is the biggest holder of foreign assets in Japan, and the only real incentive for it to sell its bond holdings would be to inject liquidity into the banking system.

"But I don't see any great need for that," said Chester.

Loeys said he too was not in the repatriation camp.

``If you have a scarcity of capital you don't want to be dumping government bonds because they don't cost you anything. You want to be dumping corporate loans, corporate bonds, equities,'' Loeys said.

Chester said that if the Japanese financial system worsened, investors could turn to cash and unwind Treasuries and JGBs.

``There is this nagging concern that if the financial situation in Japan deteriorates further, then the systemic problem associated with that can lead to significant repatriation,'' he said.

Meanwhile, the backdrop for the U.S. market was not supportive.

Nick Shamim, currency and bond strategist at ANZ Investment, said the open interest in T-bond futures was falling and momentum was slowing, signalling that the market was running out of steam.

``It's very unlikely that the market will test sub-6.0 percent yield,'' said Shamim, adding that JGBs were also vulnerable with most investors still being long.

Tolerant
There seems to bears coming out of the woods everywhere.
So many web sites have changed to bears.
So many bearish news articles and reports.
And the PPT have got the new curbs in place. 10% & 20%

We might as well guess, that they know, what they are doing.
They have known, for a while, what to expect.
And we sit here, trying to pre-guess, what is going to happen?

I think that most can sense, that the Tsunami is close.
Hang on for the ride of a life time.

SKYLARK - you made the following statement yesterday :

"I take the view that gold reflects the future state of inflation and that CB and speculator selling attributed by others for the fall of gold merely are symptematic of the fall and not the cause of it. If economic conditions were suitable for gold to rise, then investor demand would absorb any and all CB selling and there would be speculative buying not speculative selling. These economic conditions that have been and are being predicted by gold are becoming more apparent each day with the drop in the price of oil and other commodities. "

Skylark - you've hit the nail on the head with this paragraph. Speculators have been riding on the back of low investment demand for gold ( in the same way that they have taken advantage of glaring fundamental weaknesses in Asian currencies ) . However, I believe we are getting close to the end of the non-inflationary cycle as evidenced by the increasing volatility in the gold price.
Cheers, sas

One more Avid Chatter ...talk about bears!!

tommorow japan will go through 14960 and will send the SPZ7 to 902...

Canadian postal strike continues as just one more union shoots itself in the foot!!! C.U.P.W SUKS!! Am off shortly to set up my fax account~~~~~~~~

Brazil shares seen lower on renewed Asia worries
http://biz.yahoo.com/finance/971124/brazil_shares_seen_l_1.html
SAO PAULO, Nov 24 ( Reuters ) - Brazilian stocks were seen weaker at Monday's open as worries over stability in Asian financial markets resurfaced following the failure of major Japanese brokerage Yamaichi Securities, traders said.

He that goes borrowing goes a sorrowing.


It is hard for an empty sack to stand upright.

Ben Franklin

I humbly repeat here a Kitco post to JTF:

Sat Nov 8 1997 10:17

JTF: Seeing as you mentioned watching Japan more closely, I took a look at its national horoscope. You may want to consider the following: The major outer planets are of course a background situation, and we can guess what that background signifies as possibility and actuality. However, Mars is interesting to watch as it moves fairly quickly, and its aspects very often coincide with short-term triggers for major background events. In this light, transiting Mars will square ( ordinarily stressful 90 degree angle ) Japan's Mercury in the 2nd House on November 24, 25 ( Mon & Tues ) . Mars will be at 11 Capricorn, with Japan's Natal Mercury at 11 Aries. Mars will also be moving into opposition with the Moon in the Yen's First Trade futures chart at 13 Cancer.

2 - 4 - 2 - 5 !!! ( with apologies to the late, not lamented cat ) Take that you damn Heliocentrists! Have a great day all.

PAK VARSITY CLOSED AFTER STUDENTS SEEK CHEATING RIGHT

Islamabad, Nov. 24 ( ANI ) : A university in Quetta in Pakistan was closed down over the weekend as agitated students, demanding the right to cheat in exams, went on rampage.

The students wanted persmission to cheat in first, second and third-year examinations and, on being refused, went berserk.

As the violence spread on the campus, the authorities at the Engineering and Technology faculty at Khuzdar called in the Balochistan Reserve Police.

Student leaders claimed that when the exams began last week,the authorities had promised to look the other way if they cheated to get good results.

When they were not allowed to cheat, the students first held a rally to press for their demand and then resorted to violence, forcing the indefinite closure of the university. ( ANI )

With the staggering woes that have beset the Asian Tigers as
of late we may well need to expect a whole series of bailouts
for the Pacific economies akin to the 1980s bailout wave. And
the Fed sits poised to monetize new loans as needed. So there
is an endless stream of new debt that the Fed will be
monetizing into the foreseeable future on a grand scale.

All the while the central banks are shedding large portions of gold reserves in their on-going war on gold they are simultaneously weakening their own positions in terms of fungible, highly liquid assets.

A collapse in the stock markets and a run on bank deposits due to a global financial crisis could deal them a severe blow.

An excellent DETAILED review of Central Bank folly may be seen at:
http://www.gold-eagle.com/editorials/voss112097.html

Will someone in Canada please tell me if the Canada 5 dollar silver Mapleleaf coin can be used as legal
tender at the present time in Canada. If not, why not ?

I remember the battle of silver well. An economist friend of mine and his wife were busy for several months gathering up all the silver coins from circulation they could carry. He then took them to a local bank in bags and borrowed money using them for collateral ( they felt they had to check with the Fed to see if they could use money as collateral ) and used the money to buy silver futures. Alas, he is now dead, but I'd love to talk to him about the present situation.

Brazil Bovespa Index ^BVSP 9:41AM 9098 -324 -3.44%

So goes Brazil, so goes Latin America, South America, and ... Mexico and then US of A. Looks like a very fun week.

"Indeed, I tremble for my country when I reflect that God
is just." Thomas Jefferson

Excellent quote. I have been reading through hundreds of pages on the problems in Japan. My heart goes out to those people. The Japanese are a pride filled people. This has got to hurt.

The TED spread is as rich as I've seen it in awhile...

BART, I think your frames version quotes are "stuck" again ... could you check, pls....thanks

Normandy ADRs are listed for trading on the TSE as of November 25, 1997. Each ADR represents 10 shares. The symbol is NDY.

Monday November 24, 9:46 am Eastern Time

U.S. Treasuries off as Yamaichi, auction weigh mkt

*U.S. Treasuries remained lower as Yamaichi, auction weigh. *Yamaichi N.Y. unit cutting total staff, put on sale block. *BoJ asking NY Fed to help raise funds for Japan banks-report. *Stocks open lower as DJIA drops more than 50 points. *Dealers await early 2-year note auction at 1100 EST/1600 GMT.

Steves specially edited: UPDATED NEWS VIA AUSTRALIA

Yamaichi losses hidden in Cayman Islands

http://www.afr.com.au/content/971125/world/world1.html

Yamaichi was rescued before in 1965

http://www.afr.com.au/content/971125/world/world2.html

Japan rouses from do nothing spell

http://www.afr.com.au/content/971125/feature/feature1.html

Mahathir lashes excess as crisis reaches Japan

http://www.smh.com.au/daily/content/971125/pageone/pageone9.html

Mahathir widens his guilty list

http://www.afr.com.au/content/971125/world/world4.html

Chinese Sinkhole?

http://www.smh.com.au/daily/content/971125/world/world5.html

Normandy Boss says Asian Crisis presents GOLDEN opportunity

http://www.afr.com.au/content/971125/invest/invest6.html

Aussie Resource Stocks - the lowest of the low

http://www.afr.com.au/content/971125/market/markets3.html

Aussie Airlines in $150m attack on Y2K Bug

http://www.afr.com.au/content/971125/news/news7.html

Risky Business as Japanese Finance Sector Unravels

http://www.afr.com.au/content/971124/world/wtokyo.html

Theres nowhere to hide

http://www.afr.com.au/content/971124/market/markets4.html

Delta Gold/Placer Dome stake possibly first round of Gold Industry Rationalisation

http://www.smh.com.au/daily/content/971122/business/business2.html

A quick history lesson shows that booms do bust - The Maverick

http://www.afr.com.au/content/971122/market/markets2.html

Beijing calls for urgent overhaul

http://www.smh.com.au/daily/content/971122/world/world4.html

Recovery in Korea or Japan Not Close, Says Westpac Inv. Manager

http://www.smh.com.au/daily/content/971122/business/business1.html

Korea casts long shadow over Australian economy

http://www.smh.com.au/daily/content/971122/business/business5.html

Korea & Japan going under may spell Global Deflation

http://www.afr.com.au/content/971122/perspective/perspective4.html

Asia Doomsayers emerge in the US ( Ed Yardini/Henry Kaufman )

http://www.afr.com.au/content/971122/world/world2.html

Wake Up! This shock is Global!

http://www.afr.com.au/content/971122/world/world3.html

Yamaichi Turmoil ahead this week

http://www.smh.com.au/daily/content/971124/business/business1.html

CS First Boston's US-based economist, Dr Albert Wojnilower, told Business Sunday that a meltdown in the Japanese financial system would cause a depression there.

"It's the world's chief threat because there is, I'm afraid, a possibility of the Japanese financial system melting down in the way that would prompt a depression of the 1930s' US-character in Japan."

tolerantl: Coincidental that you posted the cheats at the Pakistani
University. I wonder if any of them are studying Medicine? In Australia, we often do not accept their degrees, making them sit again to practice in Australia. Now 6 of them have decided to go on a hunger strike over our high standards!! http://www.smh.com.au/daily/content/971125/national/national15.html
Don't get sick in Pakistan! No, I am NOT racist, just insist on high standards.

This is perhaps the most comprehensive and accurate overview of the HOUSE OF ROTHSCHILDs financial activities during the last 200 years. And undoubtedly, NO ONE heretofore has ever come closer - indeed DARED - to estimating the extent of the Rothschild wealth TODAY... and what it might be up to in its traditional business of trading Treasuries and GOLD:
http://www.gold-eagle.com/gold_digest/markus112297.html

How can Gold stay down with this BS going on? Does this mean the USA will be paying?

AGHHHHHHHHHHHHHHHH!

You missed by a letter. It's not BS.....BIS...Now I feel better.

Tolerant1 ... look at them wham"ing" Silver ... -.07 and now gold -.80

Whammmmmmmmm-oooo!!

Has Donald had trouble getting his password or something?
I miss Donald's Gold/Dow ratio updates.

True to form the oft CNBC financial celebrity, Gene Inger, makes for interesting reading of what happened last week in all the markets... and what we might expect in the coming round -

Yamaichi's cessation of operations is the biggest failure in Japan since World War II. Japan's market is closed Monday, so we'll watch others for hints of any Tuesday impact. No doubt, based on the Nikkei futures Friday afternoon, Asian markets will again be turned into sushi, while those buying US stocks into strength might have to eat Crow instead of Turkey:
http://www.gold-eagle.com/gold_digest/inger112297.html

Now we are getting into my territory. I just looooooooooooove it when they start to screw around with silver. It is the most volatile of the metals. It has a nasty habit of jumping all over the place.

Hi Ho Silver!

hahaha ... Yep, that they are for sure......

US Soldiers no longer lonely with email. Live report from US Nimitz
off Bahrain. Watch out for your Palace, Saddam.

Helps to have the URL! tp://204.202.137.112/dispatches/bureaus/nimitz1121/index.html

I expect some of the thinly traded stocks to take off like Saturn Rockets. The Goldbug has my vote of confidence. Proving that all that is in Canada is not bacon.

Helps to have the URL! http://204.202.137.112/dispatches/bureaus/nimitz1121/index.html
Time I hit the sack!!

All - I think it might help Bart in his efforts to keep this a free site if we all could utilise Kitco 2 ( the second choice above - entitled - Discussion About Gold & Silver Bars, Coins, and Stocks ) . This site ( Kitco 1 ) has been performing both functions for most of the last year now as the other site has been underutilized. Perhaps if we keep most of the stock and coin discussion over there, then we will help Bart by not clogging up this site. He has obviously given us the other site to spread the discussion into two specific areas. Let's help Bart ( and ourselves ) by using Kitco the way he intended!

Yamaichi to go up for sale? Does this mean that we are to see the
"good assets bank"/"bad assets bank" duplicated for brokerage
houses?
Well, we'll need more computers in which to stuff the "bad stuff"...
and we'll need a bigger building in which to house the computers...

Also, I seem to remember that Finland was coming to market with, gulp,
some USD$600 b of debt paper...
many more computers...
MUCH bigger building...

Using research from Investors Intelligence, when an issue hits a new 52wk low, then closes up for the week, it is called a selling climax. This indicates that the down side momentum is exhausted, and a rally is now possible. Investors Intelligence has been looking for a Selling Climax in gold shares to indicate a possible bottom.

This week we had selling climaxes in the following issues that I watch:

Kloof
Newmont
Royal Oak
United Services World Gold Fund
Worden Brothers Gold Index ( WG580 is broader than the XAU )

Apologies to Mooney for discussing shares, but they are first cousins.

Continual dropping wears away a stone.

Lucretius

AN ENIGMA WRAPPED IN AN ANOMALY - by THE RED BARON

Something is amiss - something is causing this anomaly rapped in an enigma. Some force - external to the market - is controlling the price of the noble metal. Something is forcing it to be range bound! This begs the following questions: 1 ) By whom? and 2 ) Why?

There is only one entity, which has both means and motive for the job: Central Banks. And Who is the MOTHER OF ALL CENTRAL BANKS: Federal Reserve Bank of New York! Hard to believe, BUT TRUE:
http://www.gold-eagle.com/gold_digest/baron112297.html

So a short reference to the other group if we post a coin or stock related item should suffice?

Hungary -7.28%
Turkey -9.42%
Russia -3.94%
Germany -3.26%
Finland -3.26%
Brazil -3.51%

Yamaichi - My reading is that this is just another major con, at the highest government levels, this time under cover of international financial instability. Creditors will be forced to take huge losses, a serious amount of public money will be injected, and Yamaichi's business will be folded into #'s 1-3. Hundreds of billions of dollars ( yen-equivalent ) disappear. Once again the United States demonstrates international leadership ( via the savings & loan fiasco ) . See how easy it is? You should try it.

( Yamaichai's global investment )
Hungary -7.28%
Turkey -9.42%
Russia -3.94%
Germany -3.26%
Finland -3.26%
Brazil -3.51%

Did anyone hear President Clinton say that the South-East AsiaN problems "ONLY REPRESENT A MINOR GLITCH?" HEY, quick someone tell Europe & Latin-America to "don't worry... be happy."

Darn it now, I want POSITIVE news ... SOMEbody must be saying that all is well. Your mission, should you accept it, is to find those 'very positive people'. Of course, if you are discovered we will disavow all knowledge of your existance. Good day. Pszzzitshh,... ( curling smoke thingy ) .

Mike Stewart:Thanks for posting the selling climax of different stocks.

IMO ,I rather value that type of info than some of the antics is being displayed.

Leader of the indebted world.

"This Asian crisis is just a minor problem. That is why, as President of the United States of America I am making this important statement about it. This should reassure you, that I take my time and position of authority to sooth the nerves of those who worry about inconsequential, little problems like this."

http://search.washingtonpost.com/wp-srv/WPlate/1997-11/19/011l-111997-idx.html

Someone posted a comment about our debt should be viewed on a per capita basis. How this REALLY puts our debt in perspective because we actually are NOT the most in-debted of nations. In fact there are TWO other nations more in-debted than we are: the developing nations of Brazil and Venezuala. Our country, of course, is one of the most developed nations on earth and should have no reason to be in-debted to the extent that a developing nation would ( tends to draw in capital to build infrastructures, etc ) .

Ain't it good to know that we aren't first on the list. And look at the good company we are keeping, eh? Well, I'm quite reassured now.

Gold is down 80...well, I like it anyway...

away...to search for more positive news

reporting

China keen to buy best-selling Indian car
Copyright  1997 Nando.net
Copyright  1997 Agence France-Presse

NEW DELHI ( November 24, 1997 08:47 a.m. EST http://www.nando.net ) - A senior Chinese official said Monday that Beijing was interested in importing India's best-selling car, an 800cc model based on Japanese technology, the United News of India reported.

Dong Jinsheng, director general of the State Science and Technology Commission of China who is heading a trade delegation here, said the Maruti car was ideal.

'Low-priced, good quality cars are Maruti's strengths and China can prove to be a good market for these vehicles,' he told the news agency in an interview. 'We are interested in importing these cars as there is no good small car in our country.'

Allen ( USA ) : How do we stand when the 10 trillion debt in entitlement funds and private/corporate debt of 15 trillion is also included? I could never figure out the asset side of the balance sheet, by the way.

I am always puzzled regarding how well the USA comes out debtwise in the data put out by The Economist" when we are compared to France, Germany, England, Italy, Belgium, etc. But, as I recall, we would still flunk the current ECU entry requirments.

More Positive NEWS FLASH!!

The US$ is the place to be ...again when there is crisis around the globe...hmmmmmmmmmm....Damn CONfederate WORTHless Crap!!!

away...to fly to my quality job

ringinggoodnewstoall...oh my!

as long as world financial

markets remain in turmoil, US Treasuries will benefit increasingly as a "safe haven" alternative for

increasingly skittish global investors. With the crisis now escalating to include Korea and Japan, this

fear factor looms all the greater in shaping the outlook for long-term interest rates. In such a climate of

deepening crisis and fear, I continue to believe that the flight to quality rally is perfectly capable of

taking yields on 30-year Treasuries through the cycle low of 5.78% that was hit in October 1993.

US: Why Stay Bearish on Bonds?

It's one thing having a contrarian view on the bond market. It's another thing altogether when you're

billed as "America's sole surviving bond bear" -- the tag that has been pinned on me many times in the

past several weeks. While such a depiction is obviously an exaggeration, it certainly does make the

point. With the world widely perceived to be teetering on the brink of a deflationary slowdown and

Treasuries benefiting handsomely from a powerful "flight to quality" rally, what could possibly prompt a

major back-up in bond yields?

Before attempting to answer that question, let me clarify one critical caveat about my own bearish

view on bonds: I am the first to concede that there will be no correction whatsoever while the global

currency crisis persists. As I have stressed repeatedly in recent weeks, as long as world financial

markets remain in turmoil, US Treasuries will benefit increasingly as a "safe haven" alternative for

increasingly skittish global investors. With the crisis now escalating to include Korea and Japan, this

fear factor looms all the greater in shaping the outlook for long-term interest rates. In such a climate of

deepening crisis and fear, I continue to believe that the flight to quality rally is perfectly capable of

taking yields on 30-year Treasuries through the cycle low of 5.78% that was hit in October 1993.

But the bear in me would still call this a temporary trading rally that depicts a world on the brink of

crisis. And I remain hopeful that this crisis is about to be resolved by the decisive action of global

policy makers ( see my November 21 comment, "The Only Way Out" ) . Call it naivet or unbridled

optimism, but I am convinced that the "wise men" of the world are students of history, if nothing else,

and are not about to let the world lapse into the sinkhole of competitive devaluations and deflation that

led to global depression in the 1930s. And yet barring concerted action to deal with the potentially

lethal interplay between the ASEAN countries, Korea, China, and Japan, there is no longer any

reason to be confident in any natural healing process. At this point, I believe that crisis containment

requires an aggressive global policy response, and we are basing our macro views on precisely such

an outcome.

Under those circumstances, the safe haven bid for Treasuries should turn out to be temporary, and

then it will quickly be back to fundamentals. If that's the case, I believe that there will be three

compelling reasons to look for a subsequent sell-off in the bond market. First, another "slowdown bet"

will be disappointed. Many are now banking on the Asian crisis to lead to a year of sub-2.5% growth

in the US economy; by contrast, we continue to look for 3.2% growth in 1998. But even if we're

wrong and the economy expands by just 2%, that pace would follow on the heels of two years of

3.5% growth; significantly, such a downshift, in that context, would not be sufficient to take the

economy out of the inflation-danger zone as defined by a conventional "output gap" analysis. In other

words, the idea that the Asian crisis "buys some more time" for this great bull market, flies in the face

of the conventional macro-analytics of inflation risk.

Second, the fixed income markets are now priced for the next move of the Fed to be an easing -- an

outcome that we believe will not occur in the crisis-containment scenario that we are embracing. By

contrast, we continue to believe that the Fed will act to raise interest rates by at least 100 basis point

in 1998. Third, we still maintain that actual inflation will exceed the optimistic expectations that are

embedded in fixed income markets. Based on the implied premium in the TIPS market, investors are

now looking for inflation to average just 2.3% over the next ten years, fully 100 basis points below

that which was expected just seven months ago; our forecast, on the other hand continues to look for

a modest cyclical acceleration to 3.1% inflation in 1998, hardly a threat to secular disinflation but well

in excess of the optimistic expectations now built into the markets.

In short, the fixed income markets are now priced for "perfection" -- a sharp slowdown in the real

economy, a Fed easing, and the death of inflation. Under the key assumption that the world currency

crisis is about to be contained, I continue to believe that the realities of 1998 will turn out to be quite

different from the heroic assumptions now embedded in the price of securities. Remember, it doesn't

take bad news to prompt a correction when expectations are this bullish. The news simply has to be

"less good." That remains key to our call that yields on 30-year Treasuries are still headed back into

the 7% to 7.5% range in the first half of 1998.

Stephen Roach ( New York )

APH: Are you short?

MARKET UPDATE ( 11/24/97 ) AM-----Gold and silver took breathers this morning but traders are expecting fireworks one way or another by the end of the week with notice day coming up. Speculation that a squeeze is developing in the metals continues to dominate trading. On Friday another 3200 ounces of gold and 360,000 of silver left COMEX warehouses. The gold lease rate slid to 3.9% in London overnight. Tokyo is closed this morning for their Thanksgiving holiday so we don't know how deep the Yamaichi failure is going to take their markets. Globally, nerve ends are exposed in nearly every market with Korea and Brazil leading today's parade south. Do you remember when we used to believe that these huge trading firms both in Japan and United States couldn't fail? Well, guess again. The bigger they are the harder they fall. Yamaichi -- Japan's fourth largest paper peddler -- is taking a $24 billion bath and the Japanese believe it or not are asking the Fed for a bailout. Here they sit on a kazillion in our securities and walk in Monday morning with their hand out. Go figure. The Yamaichi collapse has caused some gold buying overseas but it appears it's going to take a few days for this to settle in. What needs to register among investors is that Yamaichi went down becuase of it derivatives' exposure -- not the vanilla reasons you see in this morning's newspapers. That's the only way you can come short to the tune of $24 billion in a blink. Derivatives exposure globally is on the order of $35 to $50 trillion and most of that is in the big trading firms in London, Tokyo and New York. So as much as $24 billion looks like alot of money, it's small potatoes in the chaotic realm of derivatives. Expect much worse as this thing unravels and even bigger institution needing bailouts. The U.S. is far from immune -- as a matter of fact Chase Manhattan has already written $160 million in derivative's loses ( in once month ) and traders have been fired at Morgan over derivatives' problems. The shake, rattle and roll rumbling underneath the world's equities markets has derivatives' written all over it. Stay tuned. We've just entered the woods and they are deep, dark and dangerous. We will update if anything breaks. If not, this is it for the day.

"Exit, stage left!"

Tolerant1...Guess you saw over the weekend that "ANOTHER" stated that the Gold Market was ALREADY CORNERED ... and that it would just take time for it to be realized...!!!...What do you think of this comment??

I have a tough time following all of the thought patterns in Another's writings. Yes having gold in your hand is good. But to think that mines around the world are going to lock up is a little hard to digest.

Nobody else suggests that this is to occur. Does that mean it is impossible, no. Probable, I just don't think so.

It is going to be hard to keep hundreds of millions of people around the globe from buying metal stocks and the physical.

Well...if"n" its true ... the market sure does not reflect any hint. It seems that the pm market would begin to reflect this tightness ... maybe we'll see this week?? ( as Dec notices go out!! )

Yamaichi raises spectre of systemic crash

By Alexander Smith

LONDON, Nov 24 ( Reuters ) - Perhaps the darkest spectre raised by the closing down of Japan's fourth largest brokerage Yamaichi Securities ( 8602.T ) is that it could trigger the fall of other financial institutions.

Regulators -- the policemen of the financial world -- have so far played down the possibility of contagion spreading, although they are keenly monitoring events and have put into play carefully developed contingency plans.

But some bankers said on Monday other Japanese financial firms are lined up like dominoes simply waiting for a trigger such as the fall of Yamaichi to set them tumbling.

This in turn could pull the rug from beneath the feet of weaker institutions with bad debts in Japan as well as other parts of the world, they added.

But despite the credit-crunch which pushed Yamaichi over the edge, bankers in London said credit lines to Japanese banks were not yet being withdrawn, with no sign they would be in the short-term.

Yamaichi has said there was no risk of it not being able to return customer assets.

One senior Japanese banking source told Reuters that Yamaichi's demise under a three trillion yen ( $23.7 billion ) mountain of debt meant Japanese banks are now even more vulnerable to bad debts.

He said the main threat came from major creditors in the life insurance companies pulling out of subordinated loans, which make up a crucial percentage of the tier-two capital of leading banks.

``That is the next area of weakness and it is a very serious possibility that banks and life insurers could go. That will hit people hard in Japan,'' the senior banking source said.

The world's regulators have made efforts to lessen the chances of a financial meltdown being precipitated by the demise of a single firm since the collapse of blue-blooded British bank Barings.

Singapore-based trader Nick Leeson's unauthorised derivatives trades led to losses totalling around $1.4 billion mounting up at the bank by February 1995, sparking fears that winding up his positions would have a knock-on effect on other firms.

A fear of so-called ``systemic risk'' has haunted the market ever since, prompting numerous conferences and protocols and forcing regulators to put together plans on how to stabilise markets in such an event.

The need for some sort of global co-operation was underlined by the 1996 revelations of huge copper trading losses at Sumitomo ( 8053.T ) .

Talks under the auspices of international regulators the International Organisation of Securities Commissions ( IOSCO ) , the Bank for International Settlements ( BIS ) and the Basle Committee on Banking Supervision have been happening off-and-on ever since.

These have developed recommendations on protecting clients' assets and seeking minimal capital standards.

While regulators have not commented on what sort of contingencies have been triggered by the shutting down of Yamaichi, frantic talks have been going on behind the scenes throughout the weekend.

Britain's Financial Services Authority ( FSA ) -- the recently formed super financial regulator -- has put into action a ``stress testing'' emergency procedure which it first tried out in February, sources said.

Officially, all the FSA would say was that it was closely monitoring events.

The Bank of England, which oversees Yamaichi's British banking subsidiary, said it was monitoring the bank, while the Securities and Futures Authority ( SFA ) is working closely with another unit, Yamaichi International ( Europe ) , and supervising its wind-down.

In February, the Securities and Investments Board ( SIB ) , together with the London Financial Futures and Options Exchange ( LIFFE ) , the London Clearing House and the SFA, teamed up with the Commodity Futures Trading Commission ( CFTC ) and some U.S. futures exchanges to test out the emergency procedures.

While there was some surprise in London that Yamaichi has been allowed to fold by its regulators, bankers said they had little choice.

``In normal circumstances I can't believe the Japanese government would have let Yamaichi fall, but there was too much of a smell about it. They didn't want another scandal,'' said one.

Another said the Bank of Japan's approach should be seen as an ominous message to other firms.

``This has highlighted in Japan and to the rest of the world that the government is not going to bail out unviable institutions but it will only safeguard depositors and customers,'' a Yamaichi source said.

Illegitima non carborundum! I spoke recently with some people who have been doing "dog and ponies" for a new IPO on a rececious metals related company with very REAL assets. It seem that made the rounds, visiting with all of the usual suspects- ie gold funds and Canadian brokers. Alas, the gold funds have little money to invest and the the Canadian brokerage houses are enemic. Bre-X took a large number of gold dollars out of circulation. The ever shrinking equity values have lapped up much of the remainder. It seems to me that there are few players arouond, certainly not enought to reestablish gold equity shares to their former highs. It is going to take new money, and it will take some time for the investors to forget the scams, high production costs, and recent loss of equity. I predict that only companies which have earnings or some clear path to future earnings based on low operationg costs will find favor in the immediate future.

"Black Monday" in South Korea as officials fight IMF austerity measures
SEOUL, Nov 24 ( AFP ) - Once-mighty South Korea sank into
financial chaos Monday as share prices plunged with the won,
interest rates soared and officials said they were fighting a
last-ditch battle against the IMF to avoid "economic colonization"
The fresh turmoil came as officials held preliminary talks with
a three-man International Monetary Fund ( IMF ) advance guard on the
expected harsh conditions of a multi-billion-dollar bailout.
"South Korea's current situation requires a simple influsion of
liquidity, rather than policy intervention," Kim Woo-Sook, the
finance ministry's international finance director, said.
As he spoke, panicked investors screamed for the stock market to
halt trading.
Frightened investors lost confidence over the harsh conditions
expected from the IMF package, dumping so many shares they lacked
buyers.
Photographers who tried to snap the scenes were attacked, and in
the southern city of Kwangju one securities house had to kick out
its clients and bar the doors after its staff were attacked.

THERE IS MUCH LEFT TO HAPPEN IN FOREIGN MARKETS YET

With an estimated $200 billion in accumulated nonperforming loans - five times the equity capital of all Chinese banks - China's banking system is essentially insolvent. At least 50% of China's state-owned companies are in the red, constituting a far larger chunk of the economy than failing companies representin any other Asian country.

WILL the smart Chinese again seek sheltert in the currency, which has served them well for over 3,000 years: GOLD?
http://www.gold-eagle.com/editorials/dines112497.html

Given the latest world's financial tremors and gold is not responding at all! Either, gold is telling us that severe deflation is ahead or the gold market manipulation is such that we may be dead before those gangsters lose the game.

This is the news....rumours started 3 weeks ago....he feels things already discounted by major players....the little guys are now reacting......

U.S. Bonds Fall on Concern Japan Will Sell Treasury Securities

U.S. bonds fell amid concern Japanese government institutions will sell Treasury securities to bolster ailing banks and

brokerages after Yamaichi Securities Co. decided to close down. Japanese investors are the biggest foreign holders of U.S.

debt, and held a record $321.2 billion as of Aug. 31. Bank of Japan Gov. Yasuo Matsushita said that the central bank is

prepared to use its foreign currency holdings to provide funds for Japanese financial institutions overseas, which raised concern

it might sell the Treasuries.

Just got noticed that the first notice day for Dec Gold has been moved to Wednesday Nov 26 1997 due to the Market closing on Friday. As of Friday open interest at 73000 +/-. Where is all the Gold??

The Coming Bull Market in Gold

Part 1

Speech by Richard M. Pomboy

at the Grant's Fall Investment Conference

16 October 1997

I assume that I will be the only speaker to use a four letter word today, GOLD.

Actually, this four letter word is less welcome in polite society than its more commonly used

counterparts. I have found that when I talk about gold, some people walk out, some take out

their newspapers, others wonder about what is for lunch.

In short, it is not politically correct to have anything good to say about gold.

We live in a world where everything is just about right and gold seems to have the power to

speak up and say, "wait a minute, if I'm still around, maybe there is some risk out there". So

gold must be denigrated, denounced, discarded, disowned and at the very least disliked.

We also live in a world of new era and revisionist thinking to insure that there can be no

negative thoughts.

The Holocaust did not happen.

The Japanese were victimized in WorId War II by U.S. imperialism.

Bear markets are over forever.

Traditional share valuation methods are obsolete.

Inflation is dead and buried.

There can be no systemic banking crisis.

Foreigners will continue to buy, or at least hold, U.S. treasuries forever.

EMU is a certainty.

To make the fantasy complete we need only add that gold, the traditional store of value

which people have used as currency since civilization began and to buy their way out of

danger, is now obsolete, demonetized and a relic. It has been replaced by paper, and if you

are such a heretic as to believe that paper may have a slight risk to it, all risk can be

eliminated through derivatives, which are, of course, more paper. The paper asset mania

requires that the principal alternative, gold, be thoroughly discredited. Whether you call it

greed, irrational exuberance or whatever, there have been few times in history where at

least the temporary accumulation of wealth has been this easy and where risk has been so

disregarded. These few times are well chronicled in the book "Extraordinary Popular

Delusions and the Madness of Crowds".

I only mention the wonders of paper to offer an explanation as to why gold is in the

doghouse.

The "sirens" call to the financial markets are irresistible until fear sets in and then things

change rapidly as we all know that fear generates behavioral change faster than greed.

ActualIy, the gold story is compelling even without the catalyst of fear.

"This is the shabby secret of the welfare statists tirades against

gold. Deficit spending is simply a scheme for the hidden

confiscation of wealth. Gold stands in the way of this insidious

process. It stands as a protector of property rights. If one grasps

this, one has no difficulty in understanding the statists antagonism

toward the gold standard."

Alan Greenspan ( 1966 )

"You have to choose [as a voter] between trusting to the natural

stability of gold and the natural stability and intelligence of the

members of the government. And with due respect to these

gentlemen, I advise you, as long as the capitalist system lasts, to

vote for gold."

George Bernard Shaw ( 1856-1950 )

I got interested in gold about five or six years ago when I looked at the basic supply/demand

equation, that is jewelry and industrial demand versus mine supply.

It was evident then, as it is now, that billions of Asians with rapidly rising discretionary

incomes and a history of purchasing gold and gold jewelry as a form of savings would

accelerate the demand for gold. It was also obvious that mine supply, due to environmental

constraints, capital intensiveness and long lead times between finding a deposit and actually

producing gold, would grow at a much slower rate than demand. This has proven to be true

and a substantial deficit exists in the market today.

The basic supply/demand equation is extremely bullish with a gap between supply and

demand of around 800 or 900 tonnes per year last year and much larger this year.

Projected Deficit ( tonnes ) in Gold Market

1996

Growth

Rate

2000

Physical Demand

3,850

5.5%

5,032

Mine Supply

3,850

3.0%

2,701

Scrap

3,850

5.5%

810

Total Supply

3,850

3.5%

3,511

Deficit

900

1,520

Producers cannot replace their reserves in line with production. The industry needs to find

100 million ounces per year which is about equal to the total reserves of Barrick, Newmont

and Homestake. The only chance of doing this, even once, was through Bre-X whose 100

million ounces turned out to be a complete fraud. Mine supply is growing slowly without

considering any impact from the depressed price of gold. At current prices many projects

have been delayed, especially in view of the difficulty in obtaining the necessary financing at

the current gold price. In addition, there have been a significant number of mine closures

announced with Barrick recently announcing the closing of five mines. Finally, in South

Africa, where the average full cost of producing gold is now above the spot price, the mining

industry is in crisis.

Current Gold Price Will Lead to

Production Cutbacks

At $320/oz., 50% of the western world's gold production is

unprofitable on a full cost basis.

At $320/oz., 25% of the western world's gold production is

unprofitable on a cash cost basis.

At $320/oz., only 5 of 19 of South Africa's major mines could

show a profit.

As you can see, at the current gold price 25% of the western world's gold production is

unprofitable on a cash basis. On a full cost basis, 50% are unprofitable.

The demand side continues to be extremely robust with fabrication, i.e. jewelry demand,

growing at 13% in the latest quarter. For the six months ended June 30, Goldfields Mineral

Services reports gold demand up 18%, with fabrication demand up 15% and bar hoarding

up 67%. On the supply side, mine output rose just 1.4% and gold scrap declined 27%.

Goldfields Mineral Services supply/demand numbers show a large deficit of about 600

tonnes for just the first six months of 1997. This was with gold at an average price of $347,

about a $40 drop from the beginning of the year. With gold now at $325 price elasticity plus

seasonality should result in an even larger deficit in the second half. The deficit will also

expand in the second half due to mine closures. Thus a deficit estimate for 1997 of a record

1,200-1,500 tonnes is reasonable. With producers heavily hedged and shorts having large

positions which have already pushed up lease rates, that is the cost of borrowing the gold

they sell short, it is likely that neither of these groups will have a significant impact on filling

the deficit going forward. That means that gross central bank sales of probably 1,500 tonnes

or more are needed to keep gold at the current low level. This is highly unlikely especially

since central bank net sales for the past decade only averaged 250 tonnes per year, and

even if it were to occur it would quickly bring us to the end of central bank net sales.

Actually the market may be able to absorb even more than 1,500 tonnes of central bank

sales since the deficit does not fully reflect Chinese purchases. In China there is huge latent

demand which goes unsatisfied because of the extremely limited number of jewelry outlets

and also due to the significant premium above the spot price which the government charges

the public. Nevertheless, surveys in China show that the wish list among Chinese is first a

refrigerator, second a television set and third, gold jewelry. We believe that the official gold

consumption numbers used for China may be much too low as they are out of line with

other countries having comparable GDP per capita. It is likely that the high state markup and

limited distribution system results in "unofficial" sales. This could mean that the overall

deficit is actually 200 or 300 tonnes higher.

Nevertheless, while the basic market structure is in a record deficit, gold differs from other

commodities in the magnitude of the above ground supplies and in the ability of short sellers

to borrow the gold they need to deliver against their short.

The basic question then is to what degree above ground sellers will be able to fill the deficit.

Let's look first at the central banks. While potential gold investors are paralyzed by the fear

of the central banks aggressively selling their holdings, the reality is quite different.

In fact in 1996, 19 central banks bought gold while 16 sold and of the 16 who sold, only 5

sold 10 tonnes or more. Furthermore, over the past decade, over 70% of all central bank

sales came from just three central banks: Belgium, Netherlands and Canada. That means

that all the other central banks combined sold only a minor amount of gold each year.

Nevertheless, there is a perception and some reality to the concept that many central banks

are "mobilizing" their reserves.

Over the past year there has been much discussion about sales and "mobilization" of

Western central bank gold reserves. Mobilization is the lending of reserves to enable

producers to sell future production into the market today, effectively a short sale, and to

provide actual short sellers with the bullion to deliver to the purchaser of their short sales. I

should also mention that we suspect that dealers and others are using this mechanism as a

form of financing, i.e. borrow gold at a low rate, sell it and use the proceeds for whatever.

We are also told that there is a "carry trade" in gold where gold is borrowed, sold and the

proceeds invested in government bonds. The currency risk of borrowing in yen and buying

U.S. bonds has been partially replaced by the obviously less risky program of being short

gold, which according to most observers, can only go down. For the risk of lending out their

gold these central banks typically receive about 1.5% interest per annum.

As I have mentioned, a large and growing deficit exists between the supply of gold from

mines and demand, which in the absence of central bank sales and lending would result in

a much higher gold price, perhaps over $500 per ounce. In an attempt to earn a small return

on a portion of their gold, central banks have, in fact, lost hundreds of billions of dollars in the

reduced value of their gold holdings and have caused losses far in excess of that amount to

gold investors worldwide.

Just as an example, which is probably not far from the actual figures, assume that Western

central banks last year sold 500 tonnes of gold, loaned 500 tonnes to facilitate producer

forward sales and loaned 500 tonnes through dealers to short sellers. Assuming that they

earned 6% on the proceeds of the gold sold and 1.5% on the gold loaned, the centraI banks

would have earned about $500 million on their gold sales and loans.

But central banks and official agencies own 33,000 tonnes of gold, the price of which has

declined 20% from its recent highs entirely due to central bank activity. This has resulted in

a decline of approximately $80 billion in the value of their gold holdings. In addition, if one

believes that without these sales and loans of gold, the price of gold would be over

$500/ounce due to the imbalance of basic supply and demand, then the central banks have

given up an additional $90 billion. In sum, they have earned $500 million and lost $170 billion

in the process. How's that for shooting yourself in the foot?

Furthermore, as the central banks lend out more and more of their gold, they are effectively

allowing a reserve asset, which is the only asset that is no one else's liability, to be replaced

by a note from a dealer. In addition, the loaned gold ends up being sold into the marketplace

by the dealer on behalf of short sellers, producers, etc. and much of it is fabricated into

jewelry. The loaned gold has, in large part, permanently disappeared. If one central bank

wants its gold back, the dealer can borrow gold from another central bank. But if many or

most of the central banks want their gold back, for whatever reason, then lease rates would

skyrocket, there would probably be a default and gold would go into backwardation where

the spot price was higher than the future. This would wreak havoc with producers who sold

forward, short sellers and dealers, all of whom could suffer huge losses. There is increasing

evidence that the amount of gold on loan is much greater than generalIy thought and thus

the risks in the market are increasing. Nevertheless, certain bullion dealers with their

"chicken little" story of the sky is falling have been successful in spreading the fear story that

the central banks will sell all their gold. This has brought them the producer and short seller

business since the declining gold price is enough verification of the story and the facts are

ignored. The producers and short sellers selling at today's prices are probably the weakest

and most gullible of the lot. This will enable the brokers to fulfil the old axiom which says,

"client's money and broker's experience soon becomes broker's money and client's

experience".

As a result of all this borrowed gold the risks in the gold market are very real. No one

anticipated the palladium market going into backwardation as the Russians were expected

to continuously supply metal to the market. This key assumption failed which could happen

in the gold market where the key assumptions are that central banks will continue to lend

their gold, and in such amounts that lending rates remain at low enough levels to keep the

market in contango. If lending central banks withdrew from this activity or if physical demand

for gold is substantially increased by other central banks or investors becoming aggressive

buyers then lease rates would become so high that the market would go into backwardation

and the spot price would rise dramatically as in the case of palladium. Lease rates have

recently soared, perhaps indicating that the limits of gold lending are being reached.

We have not touched on yet another form of central bank gold mobilization which is the sale

of calls. These calls are sold by central banks, primarily to dealers who then delta hedge the

call with short sales. This is unmeasurable but probably a significant factor. Since the

decision to selI calls is probably made by a trader at a central bank, it is unlikely that the

same trader would have the authority to deliver the national gold reserves in case the gold

price rose and the call was exercised. Most likely the call would be repurchased adding fuel

to a rising market.

On the positive side, however, are the central banks who have been buying gold and the

huge underweighting of gold among Asian central banks due to the enormous increase in

their holdings of U.S. dollars.

With only 5 or 6% of their reserves in gold Asian central banks need to buy $6 billion worth

of gold for each 1% increase in gold reserves. Thus, even a small increase of a few percent

would overwhelm the gold market. In discussing central bank purchases of gold during the

first half, Gold Fields comments: "But a larger element appears to reflect several institutions

diversifying their reserves away from what they perceive to be an excessive reliance on the

dollar, an asset which under certain circumstances could conceivably be open to political

interference from the U.S. authorities".

The chart on shows that central bank net sales and producer net forward sales are really

not so great relative to the market deficit. The additional gold needed to fill the deficit and

keep gold from rising comes from short sellers. There are estimates of producer forward

sales being in the 2,000 tonne range and outright shorts possibly equal to that. These

figures are in line with estimates of borrowed gold in the 3,000-5,000 tonne range. The key

point, of course, is that with the market in deficit, above ground sales must continue at these

high levels to prevent gold from rising since without above ground sales the deficit would

result in a much higher price for gold.

Now I run through a little recent history of the gold market to show how we got to the current

point and a possible future scenario. An acceleration in producer hedging was followed by

some central bank sales. The weakness created by these two selling groups encouraged

outright shorting of gold.

Anatomy of a Gold Cycle

1. ABX starts hedging concept.

2. Other producers join in hedging.

3. Physical demand absorbs increased hedging.

4. Hedging accelerates, but physical demand still supports

gold price.

5. Central banks join in by making sales.

6. Gold looks shaky and starts to decline.

7. Producers sell more as price declines.

8. Short sellers join in and break market.

9. Sentiment at lowest levels, shares collapse.

NOW:

Central banks have sold much of what they want to sell.

Producers are heavily hedged and have huge gains.

Shorts are in record short position.

Sentiment at worst levels.

TO COME:

Evidence of central bank buying.

Evidence of producer hedge reversals.

Evidence of short covering.

POSSIBLE CATALYSTS FOR INVESTMENT DEMAND:

EMU problems.

Paper markets falter.

Commodity resurgence.

Removal of theoretical central bank "overhang".

Evidence of significant Asian central bank purchases.

Current State of the Gold Market

1. Large and expanding deficit.

2. Producer forward sales, speculator shorts and some

central bank sales fill the deficit.

3. Overwhelmingly bearish sentiment promoted by bullion

dealers in an attempt to capture flow from producers, short

sellers and central banks.

Their "bear" story:

A. Central banks 'will sell all their gold.

B. Producers should sell forward at any level as the gold price

is going lower.

4. In fact:

A. In 1996, 19 central banks bought gold versus 16 that sold.

Of the 16, only 5 sold more than 10 tonnes.

B. Mines are closing and many projects are being deferred at

the current gold price, further expanding the deficit.

Now, producers have large gains on their forward position. Barrick has a $600 million

unrealized gain and Normandy, the largest gold company in Australia, has an $800 million

unrealized gain. It is now much more likely that forward positions will be bought back rather

than additional shorts initiated by producers since hedging at current levels for many

producers would just lock in a loss. By the way, while these producer hedges in retrospect

seem wise as industry hedge gains are probably $2-3 billion, the market capitalization of the

gold companies was reduced by $15-20 billion in part due to the effect of their forward sales

on the gold price. Producers are also good at shooting themselves in the foot.

When gold looks as if it has made a solid bottom, it is likely that a flurry of acquisitions will

take place as virtually all the majors must make acquisitions to replace reserves since

exploration will not find the reserves fast enough, if at all. An important asset in these

acquisitions would be the unrealized gains many companies have on their hedge positions.

For example, Barrick could acquire Normandy for cash, raising all the needed money from

the reversal of both company's hedges. In the process they would have to buy back 13

million ounces which would initiate a breakout to the upside in the gold price.

We believe that in addition to producer hedge reversals we will soon see evidence of

significant central bank buying. If borrowed gold is 5,000 tonnes or more, someone has

been buying all this gold and rumors of Asian central bank purchases will probably be

verified.

Finally, we expect investment demand to pick up as paper markets falter, the Asian

currency crisis spreads, EMU has problems or there is a "clean up" of any central bank

overhang.

http://www.gold.org/Pages/Gedt1.htm

While everyone has their eyes on Yamaichi, Korea is in the grinder. It seems that every time the IMF is called on in asia the callers resist the regulatory aspect of its help. "We don't need regulations. We just need the money."

If Asia goes to the gold standard the West is deadmeat.

BOJ Gov Matsushita declares 'ready to use' forgeign reserves. This is an overt attempt to leverage NY Fed's help in funding the bail out of Yamaichi and those to come. Since there is only so much that the Fed can do here because of political concerns in the USA, my guess is that BOJ *WILL* begin redemptions in earnest soon in order to cover the fallout from their most recent crisis. Interest rates to rise rapidly on Bonds. BONDS AWAY!!!! ( said with a wistling sound thing )

Thank you for the Pomboy post, that is the best xplanation I have seen regarding the current gold situation.

tolerant1- re.your 12.29 post: the Japanese know that our central bank WILL bail them out, at least temporarily. This game is all coupled across the globe. Our FRB knows that if we don't help and the bond cash- out starts we may be finished. It is one big unhappy family. This is not us-against-them game . It is one and the same game. Why do you think the FRB has been furiously monetizing so much debt lately??? Just last week they bought almost 6 billion. The money supply ( M3 ) is skyrocketing at almost 13% !!!. All depends on how long we can last, pure and simple.


By the way, let me ask you a question that no one has been able to answer yet. Can you or anyone else comment on this ???????

If, for example, the M3 is running say around $5.5 trillion and the productivity is up 3%, one can roughly increase the M3 base by 3% without causing additional inflation. In this example, the M3 can go up by $165 billion which would be introduced into the monetary system by FRB's print presses. Would this $165 billion show up as an income on our gov's balance sheet or is it sent to IMF to spread economic control in the world or is it simply paid to the unknown shareholders of the private FRB, or is it possible that it is not printed and that is why inflation is low ??????? ANYONE???
Also, when the FRB "buys" our debt with freshly printed $$$ does it mean that we then owe the debt to the FRB, a private organization. What the hell is going on??? Or, is the debt cancelled since the newly printed $$$ that buy our debt will cause inflation and steal our purchasing power anyway???

To maintain the present price, central banks must loan into the market the shortfall between supply and demand. To decrease the price further, they must loan even more. As mines close down, they will need to loan even more. Someday, central banks will reach the limit of the gold they will loan. Demand now exceeding supply will cause the GOLD price to rise.

Once Asia collapses totally, there will be a massive move out of U.S. dollars. Some money will move out to help pay for the massive losses in Asia, and other funds will be used to buy factories now selling at a fraction of pre-crash prices. All of Asia will be on sale and money will rush in.

... the only solution being a common world wide currency:
http://www.gold-eagle.com/gold_digest/kutyn112197.html

Yamaichi collapse revives fears of global meltdown
HONG KONG, Nov 24 ( AFP ) - The failure on Monday of one of
Japan's oldest and largest brokerages, Yamaichi Securities, has
revived the 1990s nightmare scenario of a devastating meltdown of
world markets.
Such a systemic risk, involving the destabilisation of the
Japanese banking and financial sectors when Japanese markets re-open
on Tuesday after a public holiday Monday, is not being taken lightly
by the Japanese authorities.
The failure of Yamaichi and its abandonment by major creditor
Fuji Bank "could lead to serious turmoil in the credit markets,"
said ING Barings banking analyst James Fiorillo.
"We expect the premium to skyrocket as these instititutions
reconsider the credibility of the so-called protective umbrella and
insurance provided by 'keiretsu' ( group ) affiliation and/or main
bank relationships."
"The other is that investors in failed financial institutions
can expect to lose their shirts. When more firms fail over the next
year, shareholders and subordinated creditors will be bearing the
cost."

I simply cannot answer your question. It is far beyond my scope of understanding. There are some here who should be able to tackle it though.

Regarding the house of cards. They should let it clank. If they do not the problems that stem from intervention will be far greater. Sort of like the operation was a success but the patient died anyway.

test

November 24, 1997
Westmin shrs soar on Boliden bid

TORONTO, Nov 24 ( Reuters ) - Shares in Westmin Resources Ltd soared on the Toronto Stock Exchange on Monday as investors speculated a rival bidder may emerge for the Canadian zinc, copper and gold concentrate producer.

Westmin's stock was up 1.92 at 5.90 in heavy late morning turnover of 3.9 million shares.Toronto-based Boliden launched a hostile C$5.40 per share bid for the Vancouver-based miner over the weekend.

The offer represents a 36 percent premium over Westmin's closing stock price on Friday, but Westmin Chairman Terry Lyons has said the bid is too low.

Boliden is 44.9-percent owned by Sweden's Trelleborg AB . Formerly Boliden's sole owner, Trelleborg sold 55.1 percent of Boliden earlier this year through a C$878 million initial public offering on the Toronto Stock Exchange.

Westmin produces zinc, copper and gold concentrates at its Myra Falls operations on Vancouver Island and copper concentrates and cathode copper from its Gibraltar Mine in south central British Columbia.
http://canoe2.canoe.ca/ReutersNews/WESTMIN-WMITOSHRS.html

All is well, things is great, life is good, count yer blessin's!

Monday November 24, 2:12 pm Eastern Time

US Treasuries at lows, bill auction called decent

*US Treasuries hold near lows after weekly 3-,6-mo bill sale. *$14.5 billion bill auction described ``better than expected.'' *Japan closed Monday, players await Yamaichi fallout Tuesday. *Talk resurfaces Japan firms to sell Treas for repatriation. *Range trade expected for rest of holiday-shortened week.

Hello All,

Does anyone have a record of Hepcat's posts from inception[Oct I think?]?

There is something I want to check out.

Thanks in advance.

Regards.

November 24, 1997
Gatherings banned in mine protest region;'revolt' feared

ATHENS ( AP ) - Police clamped martial law-style restrictions on public gatherings today in northern Greece where protesters have mobilized
increasingly violent opposition to a gold processing plant planned by
Toronto-based TVX Gold Inc.

A police announcement sent to community offices bans "all public meetings, marches, demonstrations, etc." in and around the communities of
Olympiada and neighboring Varvara until Dec. 4. "The state is determined to take all called for measures in order for this project to proceed, because it is in the interest of the Greek economy and of the Greek people," government spokesman Dimitris Reppas said.

Demonstrations on Nov. 11 left nine police injured and caused severe damage to TVX equipment. A search of a makeshift checkpoint set up by demonstrators uncovered 99 petrol bombs, three barrels of chemicals normally used by police and some spent bullet casings, authorities said today.


TVX bought the old Kassandra mines from the Greek government in 1995 for about $46 million US. Situated amid 6,500 hectares of forest land, the
mines have yielded various metals, including zinc and silver, for more than 2,000 years. TVX estimates their gold reserves at 3.4 million ounces.

But the investment has been plagued by problems almost from the start.
Residents blockaded area roads last year, shutting down TVX operations for 10 months.
http://canoe2.canoe.ca/WorldTicker/CANOE-wire.Gold-Mine-Protest.html

True to form the oft CNBC financial celebrity, Gene Inger, makes for interesting reading of what happened last week in all the markets... and what we might expect in the coming round -

Yamaichi's cessation of operations is the biggest failure in Japan since World War II. Japan's market is closed Monday, so we'll watch others for hints of any Tuesday impact. No doubt, based on the Nikkei futures Friday afternoon, Asian markets will again be turned into sushi, while those buying US stocks into strength might have to eat Crow instead of Turkey:
http://www.gold-eagle.com/gold_digest/inger112297.html

Jeff Uscher, Grant's Asia Observer, on CNBC just speculated that governement to government repurchase agreements would keep US bond cash-ins off-market. The market problem would arise from banks, insurance companies, et.al., who would "go-to-market"...

Hello, I do not have the posts. sharefin may have them.

This mess is going to get waaaaaaaaaaaaay out of hand. In the future when someone gets ripped off they will refer to it as getting Clintoned or Rubined.

Let me try to answer some of your question.

I think the process of the Fed buying US Debt is called monetizing the debt, essentially printing new money:

The Fed issues 100B in notes to buy 100B in Treasuries from Joe Public. Its balance sheet is unchanged: 100 B in Assets ( Treasuries ) / 100 B in Liabilities ( Notes ) . The government's balance sheet shows 100 B in Liabilities, and Joe Public has 100B in cash. The end result is the government, with the help of the Fed, has exchanged cash for debt.

Now, if the Federal Reserve Notes were exchangable for gold, or something tangible, the Fed might be concerned that the notes it issued might overwhelm it assets ( Gov Debt ) . But as it is, I don't know what risk there is for the Fed, other than people understanding this and bailing out of the dollar.

I don't know if this helps, or if it is just a re-hash of what many others have said more eloquently before me.

November 24, 1997
Closing overseas stock market indices

LONDON ( Reuters ) - Here is how major stock markets outside the United States ended Monday.
LONDON - British stocks fell sharply after news of the biggest-ever financial collapse in Japan unnerved markets around the world. The FTSE 100 closed at 4,898.6, down 87.2 points, or 1.75 percent.
FRANKFURT - Germany's stock market remained firmly mired at lower levels in afternoon postmarket trade, after a less than inspiring opening across the Atlantic compounded downbeat sentiment in Germany. The DAX-30 index closed at 3,830.63, down 129.06 points, or 3.26 percent. In later screen-based trade, the IBIS DAX index ended at 3,832.10, down 109.81 points, or 2.79 percent.
PARIS - Stocks fell 2 percent after the Asian financial crisis claimed Japan's fourth largest brokerage house as its latest casualty. The CAC-40 index closed at 2,802.48, down 59.22 points, or 2.07 percent.
ZURICH - Stocks ended more than 1 percent off as the collapse of Japanese broker Yamaichi Securities sent shockwaves through the market. The Swiss market index closed at 5,645.7, down 79.8 points, or 1.39 percent.
TOKYO - Stock markets were closed Monday for a national holiday and will reopen Tuesday. On Friday, the 225-stock Nikkei average finished up 413.09 points at 16,721.58.
HONG KONG - Stocks closed higher, cheered by prospects of a better real estate market but held back by uncertainties over regional currencies. The Hang Seng Index advanced 38.16 points, or 0.36 percent, to close at 10,586.36 after vaulting to a day high of 10,674.82 at the open.
SYDNEY - The stock market ended a slow session nearly unchanged as a public holiday in Japan kept many investors sidelined. The All Ordinaries index closed at 2,482.1, down 0.6 points, or 0.02 percent.
JOHANNESBURG - South African stocks ended a touch down, dragged under by a weak industrials sector whose 1 percent fall outweighed a healthy 3 percent rise by gold stocks. The All-Stock index closed at 6,397.2, down 8.7 points, or 0.14 percent. The All Gold index closed at 809.2, up 23.7 points, or 3.02 percent, while the Industrial index closed at 7,865.7, down 72.8 points, or 0.92 percent.

Tolerant1@14:45
I really like that, those expressions are headed for the
history books!

Allen@12:01
Sharefin may be able to come up with something ( he usually does ) ; for myself, I'm trying to focus on the possiblity that we may be
able to Clean out the Stables in the foreseeable future; the end result will be positive, although the task isn't much fun.

Colleen--Hello! What did Paul decide to do?

tolerant1: YOUR "...when someone gets ripped off they will refer to it as getting Clintoned or Rubined." How about "I got Clint-rubbed?"

To WSF: It doesn't quite work that way. If the Fed buys T Bills in the
open market it doesn't create cash directly. It pays with a check drawn
on itself. The dealer deposits the check in its bank account which adds
reserves to the banking system. Given the fractional reserve
banking system these reserves add to the money supply only when the commercial bank makes loans or investments. When a bank makes a loan the borrower's checking account is credited so most of the increase in
actual money is in the form checking accounts. Currency is only created
when the public demands it. In order to get currency the banks draw on
their reserve accounts at the Fed.

This is perhaps the most comprehensive and accurate overview of the HOUSE OF ROTHSCHILDs financial activities during the last 200 years. And undoubtedly, NO ONE heretofore has ever come closer - indeed DARED - to estimating the extent of the Rothschild wealth TODAY... and what it might be up to in its traditional business of trading Treasuries and GOLD:
http://www.gold-eagle.com/gold_digest/markus112297.html

Or it could also mean making a bucket of money in the biggest bull market in modern history. No president has presided over a larger gain in U.S. financial markets than Bill Clinton

A hybrid, I like it!

You are right, fair is fair. But if the market clanks while he is at the helm of the USS Deficit, that is what he will be remembered for.

But you are right, people have made a ton of money. Now the trick is to see who can hold on tho the slippery stuff.

The Fed does indeed earn interest off of the treasury securities it holds. Off the top of my head the fed is now holding somewhere in the neighborhood of $300-400 billion worth. However the interest the fed earns off of its bonds is all paid back to the treasury. Off the top of my head, this was about $20 billion a year or two ago. The fed's profits come from some other services they run.

Tolerant.... if the Fed monetizes the debt, or joins the BOJ in bailing out bad loans, how do we get deflation with such a flood of liquidity?

The more this market mess heats up the more you can bet that Clinton will play the Iraq card.

Eventually he will get lambasted for being the President that cryed Saddam too many times.

Karlito99_a:

Hoover was close in '28 and '29 ... until the crash and the Great Depression. He needed a stock broker to run his economy.

Since first participating on this site a few months ago many of the more dismal speculations regarding the spread of asian contagion, speculative attacks against nations and their markets, banking and other financial insolvancies and the like have played out. Those who have posted the "gloomy" side have been correct in their assessments. We continue down that painful path of discovery.

On the other hand, those who have minimized the implications of the daily news have been proven wrong. From these we hear less and less enthusiasm and rationalization for "good times just ahead". Even LGB_2 and 2A has recently begun to increase his gold coin position as well as increasing his favorite, Silver.

One thing we see is that "CRASH" has not happened *yet* in the USA.

Do count the blessings. Do protect them as well.

We are in a slow motion tailspin in world-wide meltdown. We have had one world-wide jolt in late October. There will be others to come.

You could only make money in the greatest bull market if you weren't so close to Clinton that up ended up dead somewhere, no doubt from a self-inflicted wound of some sorts. Its funny, with this great bull market and all, you'd think Clinton's friends/investigators wouldn't all be so depressed.....

How could you ask for a more perfect villian than Saddam....

Anything Clinton does that appears to be a move against Saddam will be
cheered by the american people, I can't imagine that we will ever run
out of dislike for Saddam

Hoover came into office in Jan 1929. The market peaked in august of that year. Hoover presided over a 8 month rally, The day the market crashed they traded 16 million shares... that pales by comparison to the billion share trade days of today and the 5 year bull market under Clinton

We don't get deflation, yet. We just blow the balloon up a little fulller, so that when it pops, the deflationary spiral is more severe. I think those calling for deflation are implicitly assuming the Fed will stop the madness before we find ourselves in a Japan1990 situation. The fact that they haven't should be seen as a sign of stupidity or desperation. AG isn't stupid, so my vote is that he is desperate. Sort of like having a bleeding tumor and deciding that if you don't see a doctor, it can't be cancer....

I was jus' fooling with the 'fin' ya know. EB came back with a few funny replies. He's always willing to spin the news in satire.

Also apologize for not participating in the Group 30 research. Life got a bit to hectic here, so I opted out. But you and the others have been doing a great job unearthing the tangled roots.

Hmmm. This gets into the the more they mess around with this thing the worse it is going to get syndrome.

I don't know how to properly address the question in specific. However, many of the people in the financial media, the "experts" are now taking a stance which is saying deflation.

Karlito99_A:

I think Clinton's bull market more closely coincides with when the Repubs took congress and Clinton became a Repub.

AG ** the doctor; the best. He knows the show is winding down. Just trying to do his part to make the best out of it. Who knows but that they may have been creating the alternative and replacement system all these years.

Anybody has Penoles'symbol on Nasdaq ?

I think that things are going to get so out of hand that it is impossible to say what might happen as this nightmare unfolds.

Clinton, Rubin and Greenspan, the CBs are all going to have to answer some tough questions. This Yamaichi thing has not even begun to implode yet.

The black hole Yamaichi creates will destroy a great deal more than anyone is talking about yet.

Tolerant1- Thank you.

I'll try him tomorrow. I think it's quite important to get hold of Hepcat's old posts.

Hello SDRer!

Well, Paul...28, good-looking and charming..!!

I'm still trying to get him together with his siblings, so that the others in the same situation can benefit from your and others posts and family discussion! Not an easy task! Thanks for asking.

Re Your SDR trail..

Mentioned this to an acquaintance, who has someone in his office who'd be very interested in hearing more. With [Very]limited knowledge on my part,I am loath to explain, and would appreciate some basics from you?

Nick has my e-mail address, so if you can?

Thanks and regards.

November 24, 1997
Korean share prices plunge to lowest level in 10 years

SEOUL, South Korea ( AP ) - Plans for an international bailout of South
Korea's troubled economy failed to break the market's fall Monday, as the country's key stock index plummeted to its lowest point in a decade. As prices sank, panicky South Korean investors screamed out demands for a halt in trading and cursed regulators. While Seoul's request for a $20 billion-plus rescue package is expected to help ease South Korea's financial crisis, investors fear it could force more companies into bankruptcy. Loans from the International Monetary Fund usually come with strict conditions attached, including cleaning up debt-ridden companies and tightening government spending. Those measures are expected to result in
mass layoffs, something unheard of in South Korea.

Fears of layoffs were one factor prompting Monday's drop in share prices.

The benchmark Korea Composite Stock Index plummeted by 34.79 points, or 7.2 per cent, to close at 450.64, the lowest level since November 1987. An IMF delegation, meanwhile, met Monday with Vice Finance Minister
Kang Man-soo to evaluate South Korea's request for financial help and
look into the country's finance sector. A second IMF team, due today, will study the overall economy.

Formal negotiations between the IMF and the South Korean government are expected to begin Wednesday.
http://canoe2.canoe.ca/BizTicker/CANOE-wire.South-Korea-Economy.html

It should be IPOAF but it does not come up!? I will keep looking.

Bulls v. Bears

Bears dominate in gold poll

Monday, November 24, 1997
By Susanne Craig
Investment Reporter

For the first time since The Globe and Mail's Bulls v. Bears survey of financial market professionals
began in June, 1996, bearish sentiment about gold outweighs bullish sentiment.

In the latest survey, more than 38 per cent of respondents predicted gold prices will be lower in six
months, a marked turnaround from even two weeks earlier, when only 19 per cent were bearish.

Just a year ago, 63 per cent of respondents were bullish about gold.

The latest survey shows that the number of market professionals optimistic about the six-month
outlook for gold slipped 14 percentage points to just 27 per cent from 41 per cent two weeks
earlier. A month ago, 48 per cent of those surveyed were bullish that gold prices would rise.

Respondents have become increasingly bearish as the price of the yellow metal continues to drop
like a rock.

Gold stocks have been under incredible pressure recently as the price of bullion continues to hover
dangerously close to $300 ( U.S. ) an ounce, a level not seen since 1985.

The Toronto Stock Exchange's gold and precious minerals index has fallen 1.68 per cent in the past
five days, bringing the year-to-date loss to a staggering 43.3 per cent. The TSE 300-stock
composite has gained 14.3 per cent so far this year.

To add insult to injury, a number of other factors are pushing gold prices even lower. Last month,
Switzerland said it might sell off up to one-third of its reserves. And Germany's Bundesbank
acknowledged it is lending out some of its gold reserves, which pushed prices lower again. In July,
Australia said it had sold off two-thirds of its gold reserves.

During the past two weeks, market pros have also become more bearish about the U.S. stock
market. Fifty-four per cent of respondents forecast New York's Standard & Poor's 500-stock
index will drop during the next six months, compared with 41 per cent who were pessimistic two
weeks earlier. Those expecting the index to rise dropped nine percentage points to 29 per cent.

The negative perceptions about the U.S. market could be a backlash from the dramatic comeback
U.S. stocks have posted since the stock market correction of Oct. 27, when New York's Dow
Jones industrial average fell 7.18 per cent. The blue-chip index closed above the 7,700 mark this
week for the first time since the correction -- and now observers could be wondering if further gains
are sustainable.

Optimism about Canadian stocks continues to wane, with only 43 per cent of respondents
predicting the TSE 300 will be higher within six months -- down from 52 per cent two weeks
earlier. In the Oct. 13 survey, 64 per cent of those polled were bullish about the TSE.

But in a surprise turn, negativity about the TSE has also eased. The number of respondents
predicting a downturn within the next six months has dropped two percentage points over the past
two weeks to 29 per cent.

Since the survey was launched, market experts have been decidedly bullish about the TSE 300,
with bearish sentiment never outweighing bullish sentiment.

The proportion of pros forecasting a rise in bond prices during the next six months has inched up
one percentage point to 36 per cent. Pessimism about bond prices has increased four percentage
points to 37 per cent.

Some investment experts consider sentiment surveys such as Bulls v. Bears to be contrary
indicators. For them, excessive bullishness is taken as a bad sign, while a healthy dose of cautious
sentiment bodes well for actual further gains.

The Bulls v. Bears is a proprietary survey developed by The Globe and Mail as an indicator of
Canadian professional market sentiment. There were 28 respondents to the latest survey.

The investment pros fight it out

Every two weeks we survey money managers, strategists and advisers on where they
expect financial markets to be in six months -- up, down or unchanged. Here
is what they think this week
% Bullish % Bearish*
TSE 300 43% 29%
S&P 500 29% 54%
Bond prices 37% 37%
Gold 27% 38%
-* The rest are neutral.


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Back to the top of the page

We welcome your comments.
Copyright  1997, The Globe and Mail Company
All rights reserved.







Bulls v. Bears

Bears dominate in gold poll

Monday, November 24, 1997
By Susanne Craig
Investment Reporter

For the first time since The Globe and Mail's Bulls v. Bears survey of financial market professionals
began in June, 1996, bearish sentiment about gold outweighs bullish sentiment.

In the latest survey, more than 38 per cent of respondents predicted gold prices will be lower in six
months, a marked turnaround from even two weeks earlier, when only 19 per cent were bearish.

Just a year ago, 63 per cent of respondents were bullish about gold.

The latest survey shows that the number of market professionals optimistic about the six-month
outlook for gold slipped 14 percentage points to just 27 per cent from 41 per cent two weeks
earlier. A month ago, 48 per cent of those surveyed were bullish that gold prices would rise.

Respondents have become increasingly bearish as the price of the yellow metal continues to drop
like a rock.

Gold stocks have been under incredible pressure recently as the price of bullion continues to hover
dangerously close to $300 ( U.S. ) an ounce, a level not seen since 1985.

The Toronto Stock Exchange's gold and precious minerals index has fallen 1.68 per cent in the past
five days, bringing the year-to-date loss to a staggering 43.3 per cent. The TSE 300-stock
composite has gained 14.3 per cent so far this year.

To add insult to injury, a number of other factors are pushing gold prices even lower. Last month,
Switzerland said it might sell off up to one-third of its reserves. And Germany's Bundesbank
acknowledged it is lending out some of its gold reserves, which pushed prices lower again. In July,
Australia said it had sold off two-thirds of its gold reserves.

During the past two weeks, market pros have also become more bearish about the U.S. stock
market. Fifty-four per cent of respondents forecast New York's Standard & Poor's 500-stock
index will drop during the next six months, compared with 41 per cent who were pessimistic two
weeks earlier. Those expecting the index to rise dropped nine percentage points to 29 per cent.

The negative perceptions about the U.S. market could be a backlash from the dramatic comeback
U.S. stocks have posted since the stock market correction of Oct. 27, when New York's Dow
Jones industrial average fell 7.18 per cent. The blue-chip index closed above the 7,700 mark this
week for the first time since the correction -- and now observers could be wondering if further gains
are sustainable.

Optimism about Canadian stocks continues to wane, with only 43 per cent of respondents
predicting the TSE 300 will be higher within six months -- down from 52 per cent two weeks
earlier. In the Oct. 13 survey, 64 per cent of those polled were bullish about the TSE.

But in a surprise turn, negativity about the TSE has also eased. The number of respondents
predicting a downturn within the next six months has dropped two percentage points over the past
two weeks to 29 per cent.

Since the survey was launched, market experts have been decidedly bullish about the TSE 300,
with bearish sentiment never outweighing bullish sentiment.

The proportion of pros forecasting a rise in bond prices during the next six months has inched up
one percentage point to 36 per cent. Pessimism about bond prices has increased four percentage
points to 37 per cent.

Some investment experts consider sentiment surveys such as Bulls v. Bears to be contrary
indicators. For them, excessive bullishness is taken as a bad sign, while a healthy dose of cautious
sentiment bodes well for actual further gains.

The Bulls v. Bears is a proprietary survey developed by The Globe and Mail as an indicator of
Canadian professional market sentiment. There were 28 respondents to the latest survey.

The investment pros fight it out

Every two weeks we survey money managers, strategists and advisers on where they
expect financial markets to be in six months -- up, down or unchanged. Here
is what they think this week
% Bullish % Bearish*
TSE 300 43% 29%
S&P 500 29% 54%
Bond prices 37% 37%
Gold 27% 38%
-* The rest are neutral.


[ News ] [ Sports ] [ The Arts ] [ Commentary ] [ Report on Business ]



Back to the top of the page

We welcome your comments.
Copyright  1997, The Globe and Mail Company
All rights reserved.

It will be an ugly thing to watch the market in Japan.

The US should learn to keep its mouth shut. Our leaders do not have the guts to do what the Japanese are doing.

Bill Clinton and his traveling funny money road show are going to put the US in a situation that will make 1929 look like a picnic. IMHO

Your wisdom, perception & knowledge is being missed.

Doesn't the FED create, out of thin air, the money to pay for the T Bills? If so, then the money supply must increase as soon as the dealer deposits the check in its commercial bank.

As you seem to have the biggest hoard of historical knowledge:

Im just awondering what the Brits, the last holders of the key currency before the USofA, were saying when our market took its tumble in 1929...was the BBC carrying broadcasts averring that this will not, of course, affect Great Britain...

Can not we make an equation: USA is to Japan as UK was to USA? Do you happen to know what was being said way back then by the worlds leading power?

To Colleen: Consider it done ( well, done within 24 hours )
Cheers.

I have to go down to the cave, be back soon.

Any guesses as to magnitude of carnage in Nippon tonite?

I have followed Mr. Pomboy in Barrons and have found him to be well informed but so far wrong on his gold stock ideas. I think he is right on that it will happen but when you are wrong for four years now it gets a little hard to justify the position. I personally think that his scenario is correct but if it was going to happen under his scenario it would all be over in about two months with gold going up 200 bucks during that time. I wonder if he still owns tvx gold that he touted at 9 bucks or ECO mines at 12? Thanks for the post.

November 24, 1997
Regulators charge Fla. companies cheated investors

WASHINGTON ( Reuters ) - Federal regulators have charged three Florida companies with cheating investors by selling them illegal futures contracts based on the value of heating oil, precious metals and other commodities.

After the Commodity Futures Trading Commission filed its complaint on Thursday, a federal judge froze the assets of the companies -- Midland Rare Coin Exchange Inc., Globex Bullion and Financial Services Corp., and Global Asset Management Inc. -- on Friday and appointed an independent official to take control of them, the agency said Monday.

Several senior officials at Midland and Globex were also charged with wrongdoing, the regulatory agency said.The CFTC said the parties involved in the case ran an investment scheme that exaggerated the profits customers would make from purchasing the illegal contracts and that the defendants did not disclose the financial risks involved.

Midland salespeople told customers they would make big profits if prices of one of several commodities -- heating oil, unleaded gasoline, natural gas, precious metals, currencies and agricultural products -- rose even slightly, the agency said.
http://canoe2.canoe.ca/ReutersNews/FRAUD-COMMODITIES.html

...Imperial Metals ( TSE:IPM ) is an interesting play,do your own d.d.

Mikeharry
I heard on AVid that the Nikkei futures were down 800 earlier in the day.

The bears they are many on the old meller yeller,

First time since the poll,they say they are sellers.

I trust them not,for their records are poor,

So wrong for so long,so I must ignore.

But wait friends,wait,is there value here now,

They've been wrong the XAU,and wrong on the DOW.

A contrary indicator for those who believe,

Lest another bank has one up it's sleeve.

Copywrite@HepMeMoney_Hmm

November 24, 1997
Sears prepares store managers for wave of protests

CHICAGO ( Reuters ) - Sears, Roebuck and Co. said Monday it has prepared store managers for a wave of protests the day after Thanksgiving by retirees who plan to demonstrate against benefit cuts.

The former workers hope the protests and the glare of the media in the midst of the holiday bustle will pressure Sears to reverse a decision to cut life insurance benefits to 84,000 retirees.

The event comes a day after Sears' expensive "Merry Side of Sears" ad campaign breaks on television. But the company said its decision to reduce the benefits was final. And it has issued a detailed set of instructions to store managers on how to deal with the protesters and avoid creating scenes for broadcast on the 6 o'clock news.

"We sent a communication to our stores throughout the country so they can be prepared," said Sears spokeswoman Paula Davis. The message the retailer hopes to communicate: "We're all part of the Sears family."

Two months ago, the retirees received notice that Sears would cut the value of their life insurance, which in some cases was worth up to $100,000, to $5,000 during the next 10 years.

Retired Sears workers throughout the country have held meetings, staged rallies, appealed to politicians and launched letter-writing campaigns against the company. At least one lawsuit claiming Sears has a legal obligation to provide the insurance benefit is pending against the company.

"I don't think it's an issue that's visible enough to have an impact on the average consumer and holiday sales," said Richard Church, an analyst with Smith Barney.

November 24, 1997
Canadian RRSP investors dismiss Asian market turmoil

TORONTO ( CP ) - Last month's stock market stumble didn't have much effect on the RRSP investment intentions of Canadians, says a survey by Royal Trust. The survey, released Monday, suggests a majority of Canadians were sticking with their contribution intentions for RRSPs, including mutual fund investments.

The survey by Environics Research Group was done just before and after the Oct. 27-28 stock market plunge, which saw U.S. and Canadian markets drop more than six per cent in value in one day after turmoil in Asian markets.

The survey showed 58 per cent of RRSP holders said it would take a stock market drop of at least 20 per cent before they would change their
retirement investments. In addition, two thirds said they would shift some of their investments only if the market drop lasted three months or more.

"It's great to see investors have taken a long-term approach to their RRSP investment decisions," Susan Viger, Royal Trust's manager of financial counseling, said in a release.

"Investors have shown a willingness to ride out any fluctuations and stick to their plans."

The survey also showed mutual funds continue to be the most popular investment vehicle for RRSP holders. Almost two thirds of investors - or 63 per cent - said they intended to direct some or all of the 1997 RRSP contribution into mutual funds. That was up from 55 per cent last year, 49 per cent in 1995 and 37 per cent in 1994.

Royal Trust, an arm of the Royal Bank, Canada's largest financial institution, has commissioned RRSP surveys since 1991 in an attempt to get a better understanding of Canadians investment intentions.

The polls are also used as a marketing tool aimed at generating more
interest in the company's financial products, especially leading up the highly competitive RRSP selling season.

I bought Judy Shelton's book, 'Money Meltdown' on the advice of a no longer remembered Kitcoite. It was an eye opener. She predicts major trade reform and a return to a sane money standard.

Industrial Penoles symbol - IPOAF

How they will look back in hindsight and regret the day they that they set this ball in motion.
http://165.247.180.114/pub/discussion/Crash.html
http://www.aci.net/kalliste/greenspa.htm

They have none to blame but themselves
For the excesses they have enjoyed

Also Colins market crash page.
http://www.users.dircon.co.uk/~netking/finan.htm#tquotns

Here I am again... This time to let all "educate" me on the wisdom of my recent ( earlier today ) purchase of my very first coins! For a mere $779 US I received one ( 1 ) $20 Liberty EF gold coin and twenty ( 20 ) Morgan EF silver coins. Did I display a significant amount of ignorance or did I make an acceptable call? Still hanging in there with my SSRIF, SSC, AMP, IAU and KIT. I have an aversion to being the "last fool" so I may go down in flames with no parachute. If that happens, I hope to land in a cotton field.

Onward and upward!

I will pick it up in the morning. Thanks.

I read on this forum the unequivocal predictions of a crash tonight in Japan - folks, it's not a lead pipe cinch already - the CBs have yet to play their hands. We may see amazing tranquility tonight - they do have it well within their power to impact the market! Don't bet the ranch!

I am still looking as per your request on information relative to the feel and market sense in England during 1929 and such. I have found things but as of yet nothing in the words of the British themselves.

I will keep searching the cave.

Also Colins market crash page. = FABULOUS SITE !!
http://www.users.dircon.co.uk/~netking/finan.htm#tquotns

Hi, new kid !! I don't think you got ripped too badly... Type III $20 Lib in EF is probably worth about $400-420. 20 BU common date ( pre-1921 ) Morgans @ maybe $12 to $14 each = $240-$280.

Bad news for stock market investors:

1 ) S&P futures off 4.80 in after-hours trading.

2 ) Dell Computer did not meet whisper estimates. It's trading down 2 points in after-hours trading.

3 ) The advance-decline line is on the verge of breaking down. It's been behaving poorly since October 27th.

4 ) NASDAQ OTC Index is on the verge of breaking down below a neck-line in the 1530-1560 area. It's just about completed a head-and-shoulders top formation. It closed tonight at 1587 after peaking at 1746 on October 9th.

Tolerant1: The British market broke 1 month ahead of ours in 1929. In fact, all of the European markets were in trouble. We ignored the warnings then, just as we are now with the Asian crisis. However, the global credit crunch will catch up to us soon enough -- just as it did in 1929.

AN ENIGMA WRAPPED IN AN ANOMALY - by THE RED BARON

Something is amiss - something is causing this anomaly rapped in an enigma. Some force - external to the market - is controlling the price of the noble metal. Something is forcing it to be range bound! This begs the following questions: 1 ) By whom? and 2 ) Why?

There is only one entity, which has both means and motive for the job: Central Banks. And Who is the MOTHER OF ALL CENTRAL BANKS: Federal Reserve Bank of New York! Hard to believe, BUT TRUE:
http://www.gold-eagle.com/gold_digest/baron112297.html

Oops! Just noticed you got EF Morgan dollars. Unless they are "better" dates ( and they're probably not ) , they're probably worth only $8-$9 each. Alright, next time you'll know better. Why don't you first buy yourself the Magazine "Coin Prices" or a "Coin World" BEFORE puttin' down your hard cash? You'll come out OK in the long run. Feel free to ask us for advice. Keep yer chin up. All the best!

http://biz.yahoo.com/finance/971124/venezuelan_central_b_1.html

What is going on here?
The rest of the world is being held to ransom by the Dow.

With many global markets, already off 20% to 40%,
The buyers,are waiting to return, to cheap equities.
But until the Dow falls 20% to 40%
They will wait on the sidelines.
They will not start buying, till the Dow has been purged.

If they prop the US markets up, day by day,
While the rest of the world slides.
We may end up with the result,
That most global markets, have fallen 40% to 60%,
While the Dow, has only fallen, 10% to 15%.

The 'Powers Who Be' will be expecting,
That the masses of global investors
Will emerge out of the woods,
To come and start buying again.
To resupport their markets.

But if these many investors,
Wish to wait till the Dow has fallen.
Then we may well have a stalemate.
With no one willing to buy.

They need to bring the Dow down,
With the global markets in 'lock-step'
So that they all reach the bottom at the same time.
Then the many cashed up investors will return.
And order restored to the markets.

Chaos till the day that the Dow is purged.

THERE IS MUCH LEFT TO HAPPEN IN FOREIGN MARKETS YET

With an estimated $200 billion in accumulated nonperforming loans - five times the equity capital of all Chinese banks - China's banking system is essentially insolvent. At least 50% of China's state-owned companies are in the red, constituting a far larger chunk of the economy than failing companies representin any other Asian country.

WILL the smart Chinese again seek sheltert in the currency, which has served them well for over 3,000 years: GOLD?
http://www.gold-eagle.com/editorials/dines112497.html

Greetings. I thank you for the input. SDRer I think was seeking something on the order of what England was thinking at or just before the 29 crunch. I have as of yet failed miserably in my task of diggingsomething up in British words, news clippings and such.

Hope all is well

Can one of you prognosticators take us through an imaginary U.S. deflationary scenario? Steve

ANOTHER: your thoughts of Nov. 23 ( 09:18 ) are engaging and filled with
knowledge but are they filled with wisdom, or is the knowledge
misleading? While my knowledge tells me that gold should rise like an
Phoenix bird and that gold should protect person of simple thoughts from
the coming financial chaos, my intuition cautions against such optimism.
While I subscribe to your theory of oil and gold, I believe the agenda
is far greater and that even this theory ( oil-gold ) is simply a "drag"
to divert attention from the real illusionary agenda being carefully
orchestrated.

Consider the words of George Soros in "The Alchemy of Finance" in his
explanation of his reflexivity theory, that there are points of time in
history, as in markets, when the economic "fundamentals" which help to
derive price become irrelevant. Instead, price becomes the fundamental
variable. As in the case of gold, supply and demand have become
irrelevant, particularly to those who seek its demise or seek its
control...the LBMA, BIS, IMF and other merchant banking fraternity. We
cannot easily discount the powers behind the fixing of gold prices and
their capacity to manufacture a desired outcome. What that desired
outcome is has been superbly articulated by John Kutyn ( Nov. 21, Gold
Eagle ) ...the only solution...the final solution....a common world wide
currency.

My theory is this: Soros, as advisor to Rothschilds and others, is
correct in his understanding of the basic human flaws which drive the
mass psychology of the markets. This psychology infects even central
bankers but does not seem to illude the merchant bankers who make up the
IMF...that organization with endlessly deep pockets that craftfully
steals from the pockets of the indebted third world and bailouts out the
indebted first world ( S. Korea, the next candidate ) while fleecing these
nations of their national assets ( New Zealand: soverignty, national
treasures, resources; Mexico ( oil ) , S. Korea ( manufacturing capital ) .
In fact, every bailout requires constitutional amendments which
transfers assets into the hands of this fraternal order. Indeed, who is
the IMF and where do they get their deep pockets.

The theory is this: one by one, the fiat currencies fall, but their fall
is itself orchestrated and perfectly timed as to avoid chaos. Should
this orchestration get away ( e.g. Japan ) , there will be chaos and
riots...making Albania look like a picnic. They will fall under the cry
that their currencies and economies were overbuilt and unstable,
unsustainable, inflated...Economist will spend hours and newspaper
landscape to analyze the fundamentals, but will be unable to explain
reality using their "science" of economic fundamentals. Because, as
Soros foreshadows, fundamentals don't live hear any more ( as you too
admit ) . The world will cry for a new SYSTEM, as IMF Director Fisher has
already foreshadowed, they will cry for a new money god.....That money
god will come in the form of a new world currency, backed by gold, but
where gold has been cornered into the hands of not the central banks but
the merchant banking powers who were the original architects of those
so-called "soverign" banks in the first place. DOMINION will have been
achieved, overnight.... Your gold coins in your pocket will become the
target of persecution and arrests and you will be forced to accept the
world's standard currency. There will be no alternative...you will be
unable to trade with your gold because they will have long outlawed both
gold and old paper currency....that global currency is already being
experimented with......electronic transfer systems..... The central
bank will be the LBMA, and they will argue that in their vaults resides
the gold which gives the new global currency stability....they will
argue that this new money god has established resiliency, stability,
sustainability, and harmony to an inherently flawed and unstable system
of hetergenous currency and trading systems. Meanwhile the same powers
have bankrupt not only nations, but the gold producers themselves, we
are seeing their demise as we speak as gold persists at or below
$300/oz....it is a small sacrifice for the those same powers who own
gold mines...to foreclose of mine production fits their grander
objective...to corner supply, current and future. How best to achieve
this, fix price and rates that cut off the oxygen to mining companies,
gold leases too are drawing down the oxygen levels and CBs exhaust their
options. EVERYONE is left vulnerable, particularly soverign nations who
have now exhausted their holdings of gold having be led by
"fundamentals" that suggest gold sales and leases are lurcrative. All
the while, those who have manufactured such a sentiment have been
purchasing...except for the pesky irritants of the Middle Eastern oil
barons and the Chinese. So the mines will shut down, gold lease calls
by CB will choke, there will be no more gold supplied, at least
according to what the fundamentals would dictate.

CHECKMATE!

When that day comes, and I hope it never does, neither gold bullion,
dollars, stock certificates in mining companies, NOTHING will be allowed
in the new world system of exchange. You will have no option.

Checkmate!



On Date: Sun Nov 23 1997 09:18 ANOTHER wrote:


ANOTHER ( THOUGHTS! ) ID#60253:

Many wait for the next great bull market in gold to begin before they
buy. Why buy now and lose interest or stock market gains?

They will miss the greatest investment ever to come in ones lifetime!
The powers of this world have already begun this motion. People of
simple thought have but to buy physical gold and make low as the
financial wars begin! You see, gold was cornered this year. It is done.
No Central Bank will sell it's 50, 100, 200 million ozs gold when 600
million is needed! I ask you, how can currency price gold?

Indeed, no price will work! You think any form of "paper gold" will
stand this fire? Can we do battle with lions? When oil will not take
currency without gold the havenots will not sit still!

"When a thousand hungry lions fight over one scrap of food, small dogs
should hide with whats in their belly".

A world waits for something to happen that is done. Read my

Date: Sat Nov 22 1997 23:13

ANOTHER ( THOUGHTS! ) ID#60253:

and

Date: Sat Nov 22 1997 23:32

ANOTHER ( THOUGHTS! ) ID#60253:

then be very sure to read Mr. Mr. Markus Angelicus, on Gold Eagle! Then
you will know!

But, it will never come to this. The oil "understanding" was broken by
the Asians. More gold has been sold than can ever be covered! This
market is not the same as the past. One day gold will start up and BIS
will deal with it the only way possible!

sharefin: re, your 18:37. I think the investors who got trounced in the SE Asia situation are very likely to wait before buying the DOW. "Once burned, twice shy" the phrase goes.

SDRer: I revisited the IMF site, and noted some stuff about the SDR. The "official" explanation seems to be that the SDR is a backup resource currency for access to additional reserves, but is "not intended to replace any other currencies" ( such as the dollar ) . My guess is that this reason alone is sufficient -- to maintain financial links if the dollar turmoil gets too high. I wonder - is the SDR "exchange" physically separate from the dollar excahnges? It does bother me that the currency weights are only changed every five years. That seem excessively long.

The web site is ( just in case you dont have it ) :

http://www.imf.org/external/pubs/ft/survey/sup0996/10sdr.htm

If you go to the table of contents you can downlead a 360k PDF file on the function os the SDR as well.

``What happens today may depend greatly on how much buying government-steered public funds do to staunch the losses,''

Tokyo stock market braces for trade after Yamaichi

TOKYO, Nov 25 ( Reuters ) - Stock brokers and investors in Tokyo are holding their breath, waiting to see how trade resumes on Tuesday after the long weekend which saw the end of the smallest of Japan's ``Big Four'' brokerages.

But most say that there is little chance for the Nikkei average to rise and the question remains how much selling the financial sector is facing and how much the Nikkei average will suffer as a result.

``If economic fundamentals were sound and Yamaichi Securities Co Ltd ( 8602.T ) the only woebegone firm, its going out of business would be seen as a relief with cause for a rebound,'' Masaaki Higashida, Nomura Securities strategist, said.

``But the circumstances are unfortunately not so, as at the moment Japan's financial sector and economic problems are still there, unchanged from before the brokerage's plight.''

Brokers said that they expect the Nikkei average to dip to at least the key December Nikkei 225 futures' Monday close of 16,210 in Chicago.

``What happens today may depend greatly on how much buying government-steered public funds do to staunch the losses,'' Yasuo Ueki, Nikko Securities general manager, said.

The expected trading range is 16,000 to 16,850 for the 225-share Nikkei average, which closed on Friday up 413.09 points at 16,721.58, while its December futures added 410 to reach 16,840.

Market sources said that Japanese financial sector issues, which were sold off in overseas markets while Japan was on holiday, would be the most sensitive to the news that Yamaichi had decided over the three-day weekend to go out of business.

``The Yamaichi news is very big and the possible effect on the market is much too large for the market to speculate about,'' said Tatsuo Miwa at Tokai Maruman Securities.

``The fact that the news broke over the weekend will cushion the impact a bit and the point will be if the Nikkei average pierces the 16,000 line,'' he added.

Brokers said that worries that investors may decide to dump investment trusts or cut ties with Yamaichi-affiliated asset management companies were casting dark shadows over the market.

But they added the fact that the news did not spark a mass selloff in overseas markets was a bit of a relief and it may prevent Tokyo markets from being snowed under by panic selling.

``Overseas markets were waiting to see how the government deals with Yamaichi -- if investors' assets will be protected or measures will taken to stabilise the market,'' a ``Big Four'' broker said. ``So far, the world seems to approve of the government's decision and is now waiting to see how Tokyo reacts to it.''

The Dow industrials shed 113.15 points or 1.4 percent to 7,767.92 overnight.

Thanks for trying.

Words from a Forbes editor on Bull Session ( sometimes in their 'relaxed' conversations they actually impart some news )

Anyho, he said they were going to put together a Pan-Asian
fundy-thingy for 68B...

Now, we KNOW the IMF doesn't have that kind of change, nor Europe, nor Africa, nor South America, can't be Japan ( the 80's liquidity engine, remember ) , so WHO does that leave...Russia, Iceland or US...

oh lordy...I've got to go take an aspirin...

Down 1.75 % so far. I suspect the Gov't is buying heavily, who else would be?

Mr. Vronsky: You have ignored my e-mails asking whether the following info from your Gold-Eagle website is misinformation. Is it true there is no Lazard Brothers Bank of Paris? Is it true that the Rothchild financial empire has no branch bank in Berlin? Is it true that the Warburgs have no Amsterdam Bank? If so, why does an article on your site present these non-existent entities as foreign players in the creation of the Federal Reserve? If the article is accurate, what are the sources of your info?

Foreigners net seller on Japan stock via Big Three

TOKYO, Nov 25 ( Reuters ) - Orders placed by foreign investors via Japan's Big Three`` securities houses before the start of stock trading on Tuesday showed a net selling stance, market sources said.

Foreign investors placed 8.0 million shares of sell orders against 3.0 million shares of buys.

Nikkei 225 down 314.79 1.88%

Hello stranger! They "re-do" the basket every five years, i.e., select the 5 countries, but they re-jigger the weighted values of the component
currencies anytime they darn well please!

About link to $: originally, they were actually one in the same. ( Truly )
What has changed is the dollars status as the reserve currency. My speculation is that they would like, in the distant future, to have the 5 component currencies equally weighted. Right now there is no hope for that as dollar & pound need to be devalued ( gasps and screams, don't uyou
know ) and the yen needs to be revalued.

I've got to run, hope this, right off the top so to speak, isn't to jumbled for human consumption ( particularly your finely organized
mind...I've been enjoying your posts! )
Take care. Be back in a bit. Regards.

C'mon Vronsky, you talk about Another passing "misleading" information, how about answering my concerns of a post or two ago--or do you just disseminate bogus info so conservatives and those of us who favor the gold standard will repeat it and make fools of ourselves and be accused of anti-semitism to boot? logustoo@aol.com

Nikei 225 now down 516.98 3.09%

Nikkei DOWN 516 points ( -3.1% ) to 16206 --- this with massive support of the Central Bank of the Land of the SETTING SUN.

I like your 18:51 to ANOTHER. It is more appropriately and tactfully worded than mine of last night. The essence of the catastrophe that ANOTHER alludes to - in my opinion - is not about gold, or oil, but to the stability of the world's financial system. Deflations can be sudden and catastrophic. If currency deflations are limited to one country at a time, this is like nuclear decay of uranium in a non-critical situation. But-- if several currencies go down all at once -- the dollar included -- this could very well indeed create the financial equivalent of a nuclear winter. Indeed at that point, gold would be the only currency left.

This is the imminent immediate threat to the world -- and I think what ANOTHER is really alluding to.

In my opinion, I am very relieved to have someone as competent as Alan Greenspan at the helm -- at a time that is probably the most challenging for any Federal Reserve director in the history of the United States. If he gets us through this critical period with the world's financial system essentially intact, he should go down in history as our greatest Fed Chairman. The stock markets are a secondary issue, since there can be no stock market without an intact medium of exchange.

Right now, his skills are more critical to the world than the skills of our president.

They have been open about 1/2 hour and are down -342 3.24%

The channels defined last week seem to be holding, at least for the near term. Gold and platinum running near the bottom of their respective channels, and silver approaching the top.

For those anticipating a short squeeze for silver, it might pay to take a look at what happened to palladium and platinum when they experienced this type of squeeze. A rough rule of thumb might be that the price will temporarily shoot beyond the channel boundary by an amount roughly equal to the channel width.

One other factor I am watching. The spread between platinum and palladium has rarely dropped below $200. It now stands at $183. Only twice since 1978 has the spread dropped below $200. Once in 1978 and once around the end of 1984. Both times the spread got down to a minimum of $140 and remained below $200 for a period of a few months. Although palladium has not yet broken out of its long term upward-trending channel, platinum has, and is now apparently is in a downward trending channel. Obviously palladium cannot continue up independent of platinum forever, the question is, "What is going to change, and when?". With gold languishing, platinum seems to have lost momentum. One possibility is that palladium will finally break it's long term support line, and enter a downward trending channel. I have shown this possibility via dotted lines. As palladium is reaching the apex of a wedge pattern, it must break one way or the other within a very few days. My guess is that it will break downward. If not, we may well see another test of the $140 spread within a very few months. Any comments on this prediction?

Remember the numbers -- below 7,161 on the Dow industrials and 3,004 on the transports would signal a bear market under this theory.
http://cnnfn.com/yourmoney/9711/19/yomo_dowtheory/

-621.18
-3.71%

I was not aware that "our" President had any skills.

Hi DJ. Sure enjoyed the lunch and your company. Next time we are in Seattle, lets do it again.

tolerant1: I thought the comparison might stimulate a reaction!!

MAJOR MELTDOWN - already down 5.57% This spells even more trouble for Japan as they have major investments in S.K.

http://www.tse.or.jp/xe/edef.html

Clinton: Japan woes could impact U.S.
VANCOUVER, British Columbia, Nov. 24 ( UPI ) -- President Clinton says if Japan's financial woes get worse, U.S. interests, including those on the American stock market could be impacted.
The president said Japan's fiscal uncertainty ``affects us in several
ways,'' citing the impact on Japanese imports of American products, and
``more importantly...lower ( ing ) the overall rate of economic growth in
the world, which would hurt Americans.''

When I asked you all to give a hypothetical deflation scenario and no one did, I was looking for an explanation of what things would be happening regarding buying power of savings, mortgage debts, consumer spending, employment, etc.. So when you ignore this request, you will more fully know what I was asking about.

Steve

OK, so Yamaichi is gone, Japan market is down, US markets are down ( though not so much ) . US bonds are shaky because Asia may sell. At the same time Gold and PM stocks keep going down. Is Everybody loosing money except short traders? Well, I keep most of my money on a side, keep loosing money on some PM stocks, and wondering how to make money outside "sort trades", because I was never one, and most of my money ( retirement ) does not support that kind of investment. Dont you keep telling me buy gold ;- ) How can I trust that I'll turn around?!?

If anybody has some "deep" inside whats happening to markets and what the heck is the "trend"? I would appreciate it. In between, I just hang in there, and hope that in a long run things turn the way they used to work.

BTW, dont bet on Japan "crashing" tonight. They did the most courageous thing - no matter what political impact itll have they let it fall. Wonder if any of our fearless leaders would have a courage to do the same when the things turn bad.

JTF
Our fearless AG is probably to blame,
For what we are now about to face.

The actions of the PPT in July96 - ( re my 18:10 )
Had cast in cement the problems to follow.
Loose money policy is an evil direction,
As it plays on the folly of mankind. - greed!

Had AG let the markets bleed their excesses off in 1996.
Then the tightening of the belts
Would not have seen society where it is now.

He, due to political pressures,
Has sold the farm, for one and all.
IMHO

----------------------------------------------
Iraq and US falling out again.
Iraq has banned UN inspectors from 60 sites.
Tensions rising again.

For those that haven't figured it out, you have to change your host name/address from ftp.kitco.com to ftp.kitcomm.com

Savage = I went short this morning at 963.00,I reversed tonight at 946.00. Good seasonals Thanksgiving week for an up move, looking for a test of the bottom of breakdown area 965 -970.

Nice graph DJ.

Oil expert warns of long-term supply crisis
ABU DHABI, Nov 23 ( AFP ) - The world oil market runs the risk of
a fresh supply crisis as financial and political problems could
block Middle East energy development plans, an expert warned at an
oil conference here Sunday.
While such a growth will be met mainly by producers outside the
region by 2000, the bulk of the increase in the following years will
have to come from Iran, Iraq, Kuwait, Saudi Arabia and the United
Arab Emirates ( UAE ) .
Sarkis, in a paper at the conference in Abu Dhabi, estimated
global oil consumption would rise from 70.3 million barrels per day
( bpd ) in 1995 to 76.1 to 78.6 million bpd in 2000 and 92.4 million
to 97.1 million bpd in 2010.
"If, as seems likely, oil prices remain low between now and the
year 1999-2000, there is a big risk that investments will be
insufficient to develop the production capacity needed to cope with
the increase in demand after 2000."
Sarkis cited political turmoil in some producers and
international sanctions against three key oil countries: Iran, Iraq
and Libya.
He said such sanctions were slowing down the development of
their oil and gas industries and cast doubts on the Middle East's
ability to play the role expected of it in meeting the growth in
world energy demand.
Gulf Arab states control more than 60 percent of the world's
recoverable crude reserves of around one trillion barrels. But they
are suffering from financial difficulties because of low oil prices
and growin Although crude exports surged by 75 percent between 1985 and
1996, revenues grew by only 19.2 percent from 129.5 billion dollars
to 154.3 billion dollars.
Taking into account inflation and fluctuations in the US dollar
exchange rate, the value of such exports declined by 10.1 percent in
the same period.
In 1974 dollars, OPEC's oil export earnings fell from 85.38
billion dollars to 76.7 billion dollars, according to the
estimates.
"In all scenarios, it is expected that the Middle East's share
of world oil exports should continue to increase to exceed 50
percent in 2010," Sarkis said.

Have a look at what down looks like:
http://web.kyoto-inet.or.jp/people/je3tbc/stdata/tcha.gif

From:
http://web.kyoto-inet.or.jp/people/je3tbc/html/sthome.html

themissinglink: Deflation is the contraction of credit. Prices nornally fall when credit contracts. This is happening throughout Asia now. On CNBC today, the talking heads mentioned that Japan's largest bank -- Fuji Bank -- was calling in loans and refusing to extend open loans any further. Even thought the central bank ( the Bank of Japan ) is still issuing credit to the commercial banks, the commercial banks are refusing to loan it out.

A deflation normally starts with the private banking system -- regardless of what the central bank does. A global deflation is starting. Gold and silver will be the only winners, because investors will need a safe have. With paper going bad, the precious metals will be the only choice.

JTF ( Vronsky ) : YOUR: "I like your 18:51 to ANOTHER." This is NOT my response, but that of MARKUS ANGELICUS. I posted it on his behalf, because he DOES NOT WANT TO REVEAL HIS ID, even to Bart Kitner!

I commend you for and agree with your comments relating to the Japanese for having the courage needed to deal with the problems the way they are. I voiced this sentiment earlier today. Cheers to Ya.

Hi BillinOregon. Grand to meet the both of you. With your ranch in Oregon, and a beautiful wife by you're side, you are better positioned than most to weather whatever the future holds. May we meet again.

Good grief! That is ugly.

sharefin: I will review your post when I get home. I know AG has a complex agenda to follow -- and some of his activities have been not in the best interest of the US -- such as opening the dollar floodgates to keep the world's currencies afloat. I don't think he created this deflationary crisis all by himself, as IMHO the world-wide events we see occuring reflect the Kondratiev wave cycle beginning to swing back to hard assets.

That is inevitable given the current human condition.

I think the ultimate test of AG's accomplishments will be in what will

unfold in the next six months. Can he ( and others ) keep that Kondratiev wave from breaking on its way down?

BOJ asks three banks for loans to Yamaichi - paper
Monday November 24, 7:51 pm Eastern Time

TOKYO, Nov 25 ( Reuters ) - The Bank of Japan ( BOJ ) will ask Fuji Bank Ltd ( 8317.T ) , Industrial Bank of Japan Ltd ( 8302.T ) and Bank of Tokyo-Mitsubishi Ltd ( 8315.T ) to provide emergency loans to failed Yamaichi Securities Co Ltd ( 8602.T ) , Japanese daily Yomiuri Shimbun said on Tuesday.

The three banks are the brokerage's major creditor banks.

Yamaichi, which is Japan's fourth-largest brokerage, said on Monday it would close its business with total debts of three trillion yen.

The BOJ has already said that it will extend an unlimited amount of special unsecured loans to Yamaichi to protect about 24 trillion yen in client assets.

But the central bank hopes to minimise the size of its loans by asking the three banks for help, Yomiuri said.

The paper did not specify the size of the loans which the BOJ would ask the three banks for.

BOJ spokesmen were not immediately available for comment on the report.

Deflation is a big topic. You are asking for a term paper and most of us are prone to notes on a frayed cuff, or a paper napkin etc. A proper deflation will result in massive unemployment a la the "Great Depression". People without jobs can't make payments, so bankruptcies will soar. ( Get out of debt as fast as you can, while you still have a job! ) Anyone with money will be able to purchase things at greatly reduced prices. My dad was a teenager during the thirties and he remembers that no one had much money, but what they had would buy many things. Movies were five cents, as was a loaf of bread. Deflation can't be done neatly or cleanly and our society is much more brittle. There are a great many books about this sort of thing and a decent study of history will help you also. Good luck.

Thanks for passing the baton, Leon.

Does anyone have Colleen's posts going back
to when s/he first appeared? This might be very important.

Bart - I guess you couldn't institute SI's type of registration.
Thanks for trying ( smiley thingy ) . Is there any correlation between
your initiation of predicting the bottom in gold and initiating
a registration system? Do you now enjoy the domination
of the forum by polemics? Maybe you could subdivide the
site into "anti-government as it relates to gold" and
"anti-government as it relates to stand-up comedy"



Hey wait a minute, I thought that once all the hired
agitators were kicked off, the POG would shoot
through the roof. Weren't we the only thing keeping
it down?

The parade south at this moment is being led by S.Korea ( -5.9% ) followed closely by Japan ( -4.9% ) ...... and of course gold is down $.80.

http://home.kyodo.co.jp/cgi-bin/conciseStory#971124808

Sears management thinks they can treat Retirees like they are of no consequence and it will not impact their sales? Ha. What fools we mortals be. I for one will boycot them. These retirees are the people who built Sears into what at one time was the nations number one retailer. Then of course superior management at Walmart came along.

sharefin: Think the PPT can fix that one at the end of the day - say just after closing?

finding support at 16000

Steady: There is a real possibility that gold will go down with the US markets tomorrow. Unless -- the PPT decides not to support the markets.

I think the US market drop tomorrow will be significant. I wonder how many times the options markets will lock up?

KAMIKAZE NIKKEI RESUMES DIVE!

TUESDAY IN TOKYO: NIKKEI sufferING worst fall in 1997 - DOWN 802 points, equivalent to a drop of 4.8% to 15919. This obliterates half of the BOJ-RALLY over the previous days. It bears repeating that ONLY the BOJ has the motive and financial clout to SUPPORT the Nikkeis KAMIKAZE dive! DESPITE BOJ SUPPORT, the NIKKEI DIVES!!!!!

To appreciate the grim financial and economic conditions - becoming worse daily - one must examine the problems. This weekend an outstanding article was posted at GOLD-EAGLE, which describes in minute detail what is happening in Asia.
http://www.gold-eagle.com/gold_digest/kutyn111597.html

Test... someone else is using my handle "Uris"

Dec Nikkei 225 futures fall by daily limit low

TOKYO, Nov 25 ( Reuters ) - Nikkei 225 December futures fell by their daily limit in mid-morning Tuesday trade, shortly after the cash index slumped below the 16,000 threshold, following news over the long weekend that Yamaichi Securities Co Ltd ( 8602.T ) had decided to go out of business.

December futures traded on the Osaka Securities Exchange fell 1,000 points before recovering slightly to stand at 15,850, down 990 as of 0112 GMT.

The Nikkei 225 average was down 814.19 points or 4.87 percent at 15,907.39.

Don't let the talking heads fool you, the impact of Asia on the U.S.
GDP will be substantial. The talking heads keep making the point that
exports only constitute 12% of U.S. GDP and Asia only accounts for
30% of our exports so we're only talking 3.6% of GDP. What's wrong with
this analysis? Plenty! It ignores the effect on our imports. The total
subtraction from GDP is how much the current account deficit goes up.
Not only will our exports drop sharply to Asia but imports from this area
will soar given the massive currency devaluations and depression conditions that are taking hold in these economies. Therefore, even U.S.
producers who don't export will be hurt by the flood of cheap Asian imports. When the pollyanna talking heads speak about imports, they only
talk about the effect on the rate of inflation. They never mention the
lost sales U.S. producers will suffer from the cutrate Asian competition.

Do you have a source for small bullion coins like the 2 peso coin in the midwest or which does mailorder?

vronsky nice post. It deserves a good response from ANOTHER. I ook forward it soon.

Mercantilism - a system which arose with the development of the modern nation state, which aimed at the acquisition of an ever increasing amount of precious metals by establishing a favorable baalance of trade and exporting far more goods than those imported, and by setting up colonies as a source of needed goods and revneue and as a market. ( Webster's Dict. )

Regardless of the interests or intents which formed this current situation IF EVEN ONE OIL STATE publicly insisted on receiving both US$ AND Gold as part of the transaction then the price of gold would reach the stratosphere in moments and the entire nature of commerce on the planet would be revolutionized ( not necessarily painlessly, though ) .

"We will sell 1 Million barrels of oil for US$ 20 Million plus 1,000 troy ounces of gold."

If such an oil state were a major holder of gold then they would become the bank, literally. Not only would they have oil but they would have what you need to buy oil. You would need to go to them to ask what they would like to have of your services and merchandise fro enough gold to keep the oil flowing. You would be their servant in exchange for oil to try to maintain your economy.

The same would be true for any other nation that held gold reserves and/or oil. You would be at their mercy. You would be willing to trade anything fro the gold to keep yourself going. Whatever gold you got from them in exchange for your merchandise and services would be immediately returned to them to purchase oil.

The US$+Gold system would surely be moved to an all gold system since the USA would be the country most likely to rebel against such a requirement for trade. By requiring both US$ and gold initially the oil state would be holding the US$ hostage to the threat of dropping it entirely from the equation. This would cause a flight of capital and destroy the US economy and therefore its threat.

Whereas US$ and gold "rise together, though gold much more so .. this will mislead many people" each nation will consider oil and gold as strategic assets and will nationalize all publicly held oil and gold production and distribution. Nations will fall into a form of mercantilism where trade is restricted to the "mother nations" group. All nations with gold and/or oil will be the "mother nations" group. The nations with the greatest need for oil and gold will be those who are the most subjugated to this mother group.

PUETZ With regard to your view that a global deflation would be good for gold, how do you explain that the financial crisis in Japan, as well as recent currency problems in other countries, which is deflationary, has not caused a flight to gold in those countries. Certainly, the fear element that you believe will lead to gold purchases in a deflationary environment should be present in those countries. Moreover, is it not particularly puzzling when one considers that gold in these countries has great significance in its monetary capacity. And if the demand for gold is not increasing in those countries, why should it elsewhere.

Folks, dont make any judgments based on "early results". Night is still young Japan coming back - down 4.23% and we have way to go before closing. It may turn one way or the other, however, dont start blaming "manipulation" if markets do not fold down. We are talking about many people in Asia facing financial disaster. Are you surprised that somebody is trying to keep it afloat? Dont you try to justify "let it burn" just because it may help gold!!

I would be much more interested in you opinion WHY gold dont react any more positive way?!

JMHO - Miro

To maintain the present price, central banks must loan into the market the shortfall between supply and demand. To decrease the price further, they must loan even more. As mines close down, they will need to loan even more. Someday, central banks will reach the limit of the gold they will loan. Demand now exceeding supply will cause the GOLD price to rise.

Once Asia collapses totally, there will be a massive move out of U.S. dollars. Some money will move out to help pay for the massive losses in Asia, and other funds will be used to buy factories now selling at a fraction of pre-crash prices. All of Asia will be on sale and money will rush in.

... the only solution being a common world wide currency:
http://www.gold-eagle.com/gold_digest/kutyn112197.html

along with my brain.

I ook forward it soon. should have been

I look forward to it soon.

Maybe I will just read posts tonight.

IMHO, for those who sell gold at a loss, but a loss relatively lower than what they buy, there might be tax benefits. Of course that would be the lucky minority to have a paying job.

Is it me or is my brain being affected by all the cell-phone towers. The US
Mint is and has been producing face-value coinage i.e. gold and platinum. The face value of the new platinum ONE OUNCE coin says $100 dollars. Is it me or isn't platinum trading for $400 an ounce. These are legal tender coins that can be spent like currency at a grocery store.
Does anyone see where I'm going with this? Please comment.

Miro--I think gold will go up when the painful side
effects of the strong dollar become too great. Some of these effects were outlined by DEJ's 21:00 post. It just seem like an unstable situation to have all these currencies fall so far and so fast. Just wait until Europe and the EMU take center stage in the months ahead. I wonder what nasty surprises are waiting there.

Denominations on the American Eagles are not meant to be a guage of value ( else why would the Plat. 1 ounce be $100 and the Gold be $50, half as much? ) . A denomination is required in order for them to be legal tender. I guess if a huge and massive deflation comes, 1 ounce Platinum coins would be the best to hold eh?

After all, the older Gold 1 ounce pieces, Liverty and Gaudens are $20 peices, yet worth quite a bit more than the modern AE's that are $50 pieces! ( You Gold backed currency freaks are now cordially invited to have a field day with this issue, but I already KNOW what you're going to say!!! )

And here's one from the late great cat:

"The central belief of every moron is that he
is the victim of a mysterious conspiracy against
his common rights and true deserts."

-H.L. Mencken

P.S. I promise not to grind this quote into
the ground like a certain 'empty sack'
quote

P.P.S. But you can bet I'll post it again
when the need arises.

Now that you have taken me to task, I guess I will have to take a cab home.

Flippin' through all the posts, I couldn't find my answer to you either. E-mail me at Avikey@aol.com and I'll send it to you.

All markets everywhere MUST crash. Everyone
must suffer like goldbugs suffer. If gold cannot
pull itself up on its own merits, it must pull
everything else down to its level. The same
is true of people who foolishly invested in
gold these last two years, even though
they were warned.

Miro re your 21:11. The reason Gold is not going up in response to Asian crises, is that Asian populace is doing the exact OPOOSITE of what Goldbugs predicted they'd do in such a crises. Namely, instead of fleeing to Gold their dumping it to pay debts! Gold consumption is WAY off in Asia, 50% from it's peak a few months ago, and destined to drop further. The whole premise that financial crises will cause the populace to turn to Gold is not proving valid in this case, and may not prove valid in the U.S. if a similar crises emerges. In fact in a real deflation, Gold may fare worse than just holding dollars would.

It's not just "fear and greed" involved with the Gold market. World investor psychology has shifted beyond that to a real minimization of Gold's role as a monetary or value instrument. Sorry Goldbugs but it's true in the main, and the Asian response is evidence of same.

Miro: Your "I would be much more interested in your opinion WHY gold doesnt react any more in a positive way?!

Heck, that 's an easy one: GOLD IS STILL being controlled by the FED!!!!!! Once the Fed is forced to relinquish gold control to gold's market dynamics, the price will soar! It's just a matter of time that the Fed will exhaust all its liquidity in bailing out Thailand, Indonesia, Maylesia. the Phillipines, Korea, and YES, even Japan!!!!!!! After allowing the explosion of the Money Supply to ludicrous levels, Mr Greenspan will succumb to professional common sense, and resign BEFORE THE FINANCIAL CRAP HITS THE FAN. I have always strongly suspected Mr. Greenspan knew what was going on, but he errroneously hoped we could some way meddle through it... but we cannot! Therefore, I predict in the not too distant the RESIGNATION OF MR. GREENSPAN, because I truly believe he is an honorable man, caught up in the pressing obligations of politics!

I don't know what to think about the Kitco except that, for some reason, the forum seems to attract "kooks" of all sorts --- either those who have a fanatical religious commitment to something which is clearly of much less use in the modern world than it used to be and who attempt to justify their attitude by forecasting doom and gloom for the world or those guys who seem to obtain pleasure through perverse acts such as, anonymously, being rude.

Eventually, like all commodities which have a cyclical trading pattern, gold will have its day and its price will rise again. No big deal. As I see it, it's just a question of getting the timing right and having some fun in the process. There's no need to get paranoid, emotional, angry or bitter like some people at the other forum appear to do. In my mind for "ordinary" folk like us, the gold market is just a casino and to win one needs luck and skill like in any other form of gambling --- including stocks. All that intellectual blah blah about the world economy etc is not only a waste of time but it encourages and deceives investors to do the wrong thing.

Now Uris, don't you twist my words and don't try to use my post for justifying your message. That's not what I said, that's now what I asked, and that's not what I believe in. I just don't like that some people on this site try to justify the means for getting gold off the ground ( so far it's not working anyway )

"Paranoids are the only ones who notice things anymore."
Anatole Broyard

I have pondered the resignation of Mr. Greenspan. It makes for very interesting scenarios.

Ed Larkin on nov 21 1997 1:16am

Searle: An air of civility has descended on Kitco 1. Nonetheless the new registration system has apparently sprung a leak and is being further supported by an even more intricate registration system. The effect is noticeable although possibly ephemeral. Gold is still going up soon and the Central Bankers are still pushing it down now.




4229. Tom Byron on nov 19 1997 2:58pm

Searle: In essence, I agree with you. By crazies I mean those who were posting under numerous handles and spilling forth obcenities as Kitco recently had during the last few days. I believe I seen this type of behavior in the past on unregistered site. Me thinks that it is "teenagers" getting into the faces of "adults" ( something they can do with impunity behind the hidden cover of the internet. Their normal reply: "Hey, we were only having fun." The post by the regulars, whether it be the bears or the bulls I can deal with. And although I have not been monitoring the site like I use to a year ago, I assume the tendency of the bears is to try to boo the bulls. I've seen that behavior on other sites. .... Well, anyway, will see what develops with the new setup... BUT I have a problem. Since my e-mail ( tombyron@hotmail.com ) is a Free Web Based e-mail address, I find that I can NOT register at Kitco using a e-mail from a web based site. And the library's e-mail services is "disabled" for good reasons also. So...




4228. Searle Sennett on nov 19 1997 2:32pm

Tom

I don't understand. I was under the impression that it was the regular "inmates" who were the crazies. Don't forget one of the most important signs of mental derangement is lack of insight and as far as I can see the "regulars", by continually and vociferously recommending the purchase of gold/shares for nearly two years right through the bear market, have eminently shown that it is they who are "crazy" and not those bears and others who, from time-to-time, have shown the "regulars" disrespect and have been chased from the forum.

Bad manners might signify bad taste or bad upbringing. Persistent bad judgement is something else entirely. Here the intellect, or perhaps the motive, is called into question.



4227. Tom Byron on nov 19 1997 1:56pm

Kitco fans: ...Kitco has just initiated a new registration and password system for their site. Hopefully, this will put an end to the "invasions by the crazies". Before you can make any new comments, you need to go through a new registration process. Good Luck.


Tom Drake: Good to hear from you. We poor folks here at the barren deserts located on the fringes of the barren gold mines appreciate a vistor coming in from the lush fields of "spoos" land. Talking about archaeologists, where is Indiana Jones and his "rolling boulder" when we need him ( The cave scence in "Raiders of the Lost Ark" ) .. Correction: The book I mentioned on a previous post should have been stated to be : the Golden Constant and NOT the Gold Standard book... Also your friend, Mr. Frank Versario ( ??? ) was being mentioned recently on KITCO. I understand he has a $8,000 a year newsletter ( ..which could be true or not so considering the type of info which has been coming across Kitco the last few days!!! ) ...Anyway I believe his comments regarded something about "shorts" in the gold market. Sorry that all I can remember at this time. ......Finally, IF,IF,IF June 3, 1996 was truely the beginning of the bear market in the XAU index, this week the XAU Index will have completed 76 weeks down from that point at which the XAU failed to hit the high note of a nine of a nine at the completion of its bull move from February, l995. ( that would be 38 weeks + 38 weeks ) .The fact that the XAU is sitting on the bear market support line down from early 1996 gives me some hope that the "end is near".... but if we still have 9 1/2 more weeks to go, I guess I will grin and "bear" it.: )


4213. Thomas Drake on nov 18 1997 11:48pm

well, i am very pleased to see tom byron "dressed to the nines". i haven't posted since i couldn't "bear" to flog a dead horse. gold and the miners are certainly well oversold by most any measure. still there is enough gold above ground to furnish nearly all mankind with a one ounce gold coin for many years to come. but i often wonder what archaeologists in the year 6000 will think when they crack open the vaults of the rich and famous central banks and find nothing but dessicated and shredded T bond certificates.

vronsky you are on a roll tonight. Keep it up, you are marking new ground. It is starting to feel like a turning point.

Gusto Oro re your 19:11, and 19:20, Rothschilds, et al. The Jewish banker Tri lateral, fifth column, One worlder, behind the scene string puller,financial conspiracy crap, ( which many here eat up with fork and spoon ) has been around for decades. It's akin to the "Holocaust never happened" garbage spread by anti-semites and indeed, the source of these bogus stories is anti-semtimism.

I'm not saying that those who dessiminate the information are anti-semites, just misguided fools. I'm not saying the Rothschilds aren't rich and trying to get richer, they are. As do all rich folk. ( But not as rich as Bill Gates or the Sultan of Brunei, neither of whom seem to belong top the "club" eh? ) .

It's the consortium / conspiracy, private fellowship of underground Jew bankers crap that is apallingly nonsensical ( and rascist ) . Somewhat akin to the U.S. Govt. alien coverup at area 51. But it's much more fun to believe in a massive secret society of nefarious evil Jewish bankers than not eh? Makes for good copy , hence such garbage will always find an eager, albeit extremely ignorant, readership.

John Disney - You have no doubt followed some of the discussion re: a conspiracy/manipulation theory that goes like this:

1. Conspirators: Rothschilds, Soros, Tiger Fund, Group of 30.

2. A wide and growing body of evidence indicates their strategy is to drive down market prices, gain control of as much metal a possible, above and below ground, at bargain basement prices from panicy producers/sellers, then allow the prices to rise, profiting from the gain.

3. Fact: One of Rothschild's banks and Goldaman Sachs ( member of Group of 30 ) were the major purchasers of Stillwater's palladium, at $135/ounce and much of their platinum.

4. Many other suspicious links have been brought to light by other Kitco contributors between Group 30 members and PM related activities such as the OZ gold sale, Swiss rumors, etc.

As RSA is still the major supplier of gold and platinum, for this theory to hold up, there must be much activity in RSA from this group. I would suspect that the Rothschilds long have been major players in RSA, and perhaps are the majority stockholders in many of the mines.

Lately we have heard rumors of much forward selling by RSA mines. Questions:

1. What do you know of Rothschild ownership of some of the major RSA producers?

2. Can you confirm recent increased forward selling?

3. Is there any way to tell who the buyers are?

4. Do you know of any connections of the Group of 30 in RSA? I don't see any of people related to RSA organizations on the list. http:\\www.group30.org/g30_mem.htm

BTW - Group of 30 may soon need a new name: Group of 29. Mr. Shijuro Ogata, Senior Advisor for Yamaichi Securities Co., Ltd. may no longer be a member. This raises interesting questions in itself.

The fact of the matter remains that the largest portion of humanity considers gold to be money. They have the largest markets that will grow in the near and mid term future.

I see Vronsky, Gold isn't going up cause the FED is controlling it. Hmm, is this the same treasury dept. who touts Gold American Eagles as a great investment, and a wise and prudent investment on their public website?

Or maybe it's Alan Greenspan's many statements as he has shown and stated he still has a fondness for Gold.

Or is the Fed's "manipulation" via the U.S. very CONSPICUOUS, non sale of our Gold reserves when all the other major world CB's are dumping? Come come now, let us reason together.....

and found it wanting. I have not pondered AG's
resignation, since this is not the alt.fantasy-world site.
I have pondered Ag's resignation at the sight of $5.50.
Vronsky - What happened to the explosion in Pt/Pd?
Remember when we are were supposed to buy
Stillwater?

I am also currently pondering how, except in Malaysia
( which I'm sure we'll turn our attention to shortly ) ,
all Eastern markets are rallying nicely from their
morning lows. Looks like KitcEOW
( end of world ) module has been
deactivated until tomorrow.

LGB - Quite a coincidence that my post followed yours. I am a subscriber to, and an eager contributor to, the conspiracy theory. And it has nothing to do with Jews. Only those with the means and the historical reputation for participating in such conspiracies. And its fun. Join us and see. Once you are a believer, you can find a conspirator behind every market move, action, and rumor. If we can enlist that wiley scheming mind of yours, I'm sure we can make great progress. Hop aboard!

Goldbugs take heart...this COULD be the start of something big!

http://www.usagold.com/Daily Quotes

I see what you are saying, the only problem I have is that when the $20 Gaudens, Liberty's, etc. where coined they were based at or slightly below the going spot of gold ( roughly $20 an ounce ) hence a twenty dollar gold piece. These new ones are using dollar denominations that are discounted hugely lower than the metals' spot price. In other words, is the Mint anticipating much lower gold and platinum prices?

NKOB re your 18:14 Gold & Silver coin values. The Liberty should have been approx. $400 +/- $20 or so, and the Silver EF Morgan common dates are worth about $10 each, tops. $660 would have been a reasonable, though not bargain, price.

DJ:

Another fact you might take into consideration is that Goldman sold calls against their purported long position in Palladium. If they were part of an all knowing conspiratorial team it is highly unlikely that they would have 'given away' such a nice piece of change.

Always pay; for first or last, you must pay your entire debt. Persons and events may stand for a time between you and justice, but it is only a postponement. You must pay at last your own debt. If you are wise, you will dread a prosperity which only loads you with more.

Ralph Waldo Emerson

Ok DJ! I'm pretty sure aliens are behind it all though. Pres, since we are not monetarily linked to Gold, the market price has no real link to the denomination price. Treasury doesn't care if the metals go up or down, though if Platinum ever fell below $100 per ounce they'd have a dilemna on their hands, similar but inverse to when Silver coin became more valuable than it's face value.

In 1986, the U.S. Mint released 1 ounce silver eagles with
a denomination of $1.00, to recreate the good feelings
associated with holding a gen-yu-ine silver dollar in one's
hands. I have had no luck getting anyone non-knowledgeable
about numismatics to take these things as legal tender,
even though they are. It will take a precipitious drop in
the price of silver ( and believe me, I will have unloaded
all of them before this happens ) for them to have a
melt value of $1.00 and for the public to become aware
that they are legal tender. I suppose when the
mint released gold eagles in the same year, they could
have priced them for nostagic purposes as
$20, $10, $5, and $2.50 ( the 1/10 ounce would
thus be overpriced ) , but then they would have
had to call the $20 coin a double eagle rather than
an eagle to go along with this fantasy, and I doubt
if people would have shelled out $400-$600 as
merrily for a coin denominated as "only" $20 versus
one denominated as $50. I don't see your concern -
it costs the mint less than $50 to produce a one
ounce gold eagle, and if you're concerned that
the govenment is trying to drive the price of
gold down to the denomination of a one-ounce
eagle, what are you buying them for anyway?

Does anyone know how a dam bursts? It seems to me that most are seeing the gnat and missing the elephant.

Of course the Asians are selling gold! It has served it's function! If you were holding gold before the, 'currency speculators' got hold of the 'money', and sold now, you would have succesfully preserved a good deal of your purchasing power.

Remember! How do dams break? It's starts with a crack that grows, that turns in to a leak, that washes away a larger chunk which becomes a torrent that consumes more of the structure...

Anyone know what became of George Cole? Hope that he is in good health and simply on vacation.

Looks like the expected bloodbath is not quite as severe as what was eagerly anticipated by some Kitcoites. Tomorrow's DOW drop will be smaller than today's, ditto Wednesday, with a resumption of smoothing by next week. Domino THIS!

They'd just accept them as $100. Since it cost them
less than $100 to produce and they sold them for a
lot more than $100, they wouldn't be openly weeping,
although they wouldn't realize as much profit as they
had hoped. It would be like breaking open a proof
set and spending the coins - Not that common,
but not unusual, and not something the mint has
advisory panels investigating ways to prevent.

When the silver content of coins became worth
more than face value, the mint had to worry
about hording - not enough coins in circulation,
angered businessmen, rioting in the streets,
resignation of AG, etc. Then the issue was
one of increased cost to the mint necessitated
by increased production.

D.A. I really hate it when someone tries to shoot down our conspiracy. Let's see what I can do. Someone once mentioned an old saw that goes something like "There's never a bad time to sell calls." I don't have any knowledge of this Goldman action. Whether it is anti-conspiracy point depends on when the calls were sold, and at what price. The devil is in the details. If you have the details, you can win this point. If Goldman really lost money selling these calls, it is a major blow to the theory.

Personally, I'm still trying to figure out how the conspiracy benefits from allowing one of the Group of 30 members, Yamaichi, to go under. Give me time. It will come to me.

GSC was an invention by a Kitco regular.
He will be back when a computer becomes
available. This was the "November surprise"
that GSC spoke of. Also, GSC has had to
go on a massive rehydration campaign.
His mouth and throat were severely dried
out by calling the bottom in gold and gold
stocks so many times.

True to form the oft CNBC financial celebrity, Gene Inger, makes for interesting reading of what happened last week in all the markets... and what we might expect in the coming round -

Yamaichi's cessation of operations is the biggest failure in Japan since World War II. Japan's market is closed Monday, so we'll watch others for hints of any Tuesday impact. No doubt, based on the Nikkei futures Friday afternoon, Asian markets will again be turned into sushi, while those buying US stocks into strength might have to eat Crow instead of Turkey:
http://www.gold-eagle.com/gold_digest/inger112297.html

RCM has a 1oz gold coin that has a buy back for $310.00 till Jan 2000 someone has faith

Gold may continue to fall or may be it's bottoming here. Which ever it is, no central bank will get in front of this freight train if it gets out of control. How does one define 'out a control'? Simple, when one group dumps their, expensive gold' for their home currency and we buy 'cheap' gold. Then, when the Yen ( or currency of your choice ) devalues to the point that companies producing in the U.S. ( however few that may be ) can't compete, then we will devalue. Begger thy neighbor. We will be trading in and out of gold until everyone sees what is going on. Then no one group will dare to get in front of that freight train, NO ONE. How will the 'standard' of safety fare ( T-Bonds ) , when there is large scale liquidation? Anybody check Barron's lately? Seems as though somebody has been selling U.S. paper of late.

the fuse has been lit....
how long will it take before spark meets powder??

I have stood on the shoulders of the giants
of san bernadino, big bear, and red rock.......

sleepwalkers fixed with un-broken stare...
the present slips by with nary a notice of its' passing...

the lit fuses red glare....

how will the hard questions be answered?

we have all wondered what would be the catalyst;
we now know. the 4th largest securities firm folding
from financial in-solubility....

the first domino has fallen....

gold calls are STILL dirt CHEAP!!!

what SHOULD you DO????? buy stocks? buy safety? stick head in sand????

cherokee!; ) buyer-of-gold-----and------seller-of-corn----

What screens are you looking at. I just checked yahoo international and it looks ugly.

When Oldman went missing for a few days a few months ago,
many people said "I hope he is okay. You know, his handle
was Oldman." Now with GSC, the same concerns about
his health.

Do Kitconans have such a death wish or such a gloomy
disposition that the absolute worst is suspected of
anyone who is absent for more than 10 minutes? Is
this someone connected with the infant's belief
that when a maternal figure or toy leaves their sight,
it has thus ceased to exist?

RJ - Where are you? Whatever happened to those coins Canada was supposed to be selling with a guaranteed face value of $300 U.S. I think there are a few folks around here that would like to buy a trillion of these or maybe more.

Someone finally takes note. Look LBG, I just finished reading a book on the Roman Games, actually I threw it aside before I finished because I was so appalled at the wholesale slaughter of human life that amused a single culture for hundreds of years. There are people who do deny the millions who died in the camps during W.W.II, but I find there is a tendancy among us all to deny bloodbaths and massacres quite readily. How many lost any sleep over the million or perhaps now two million who died in and on the borders of Ruwanda just recently? In some cases thousands could have been saved by a few timely pistol shots fired in the air.

Articles on economics such as the one I referred to which are heavily read by those of us who support a gold standard should not include what I'm now assuming to be unfactual information about historical ethnic names that even indirectly might suggest a preoccupation with prejudice. Once repeated it misdirects sullies our cause. To be fair the article on the Federal Reserve I refer to is rather lengthy and only in the list of Banks therein do I question its accuracy.

robnoel - you must have been reading my mind, or vice versa. Is this coin really available? Where and how much?

vronsky, Marcus Angelicus, Re: your 18:51PM
Yes. We are on the same wavelength. I, like you, believe that eventually gold will be outlawed ( gold "hoarders will be persecuted ) .
One world currency backed by gold? Right on the money. For those who believe in Biblical, Koranic, Talmudic prophecy, it should make sense.
Could Euro be the early stage of the process? After the $US collapses, world confidence is restored by introduction of new "improved" currency-The Euro.
Are we living in the 2nd stage of global development of currency?
1.From immemorial times till early 20th century.
One world currency - gold. It is not controlled by anyone.
2.A brief total transfer of wealth period. From early 20th century till end of 20th century. Paper currencies, controlled by central banks.
3.21st century. Back to gold, but this time totally controlled by one central bank.

vronsky, Marcus Angelicus, Re: your 18:51PM
Yes. We are on the same wavelength. I, like you, believe that eventually gold will be outlawed ( gold "hoarders will be persecuted ) .
One world currency backed by gold? Right on the money. For those who believe in Biblical, Koranic, Talmudic prophecy, it should make sense.
Could Euro be the early stage of the process? After the $US collapses, world confidence is restored by introduction of new "improved" currency-The Euro.
Are we living in the 2nd stage of global development of currency?
1.From immemorial times till early 20th century.
One world currency - gold. It is not controlled by anyone.
2.A brief total transfer of wealth period. From early 20th century till end of 20th century. Paper currencies, controlled by central banks.
3.21st century. Back to gold, but this time totally controlled by one central bank.

DJ:

I've got the times, dates, amounts and strikes. The reason why I am so familiar with the details is because we bought them. I can assure you that there was a very nice piece of change that was lost since we got it.

A funny thing about the people over at Goldman is that while they are certainly better connected than you or I they are far from omnipotent. Their information is based mostly upon their commercial contacts and the veiw of the market they are afforded by being a major conduit for OTC trading. This is true of any of the the major players in any of the metals markets. Another thing that is also true is that while alliances may be formed, they are easily broken when convenient. Screwing and being screwed is a way of life for many of the inside particpants in many markets. The bottom line is that all these people look after themselves first. Its very hard to have a nice coordinated conspiracy when each of the players has an ego large enough to fill the Rose Bowl.

If there is any 'conspiring' going on in the markets it is by governments trying their damnest to make sure the whole system doesn't just melt away. I wish them luck, because the other side is a very scary contemplation. One of the things that is important to realize in the Asian debacle is that the little guys will be made whole in some way shape or form. This means printing enough money to cover all the small depositors or share holders. Albania on a large scale would not be a welcome sight.

Uris--The 1965 to 1969 halves have 40% Silver content, or .316 oz. per coin. $1000 face value has about 316 oz. of Silver. At $3.10 Silver and lower, the face value of the coin is worth more than its Silver content. That's 3-1-0! ( grin thing )

Uris--The 1965 to 1969 halves have 40% Silver
content, or .316 oz. per coin. $1000 face value has
about 316 oz. of Silver. At $3.10 Silver and lower,
the face value of the coin is worth more than its
Silver content. That's 3-1-0! ( grin thing )

For Uris

I dont think I like your attitude. The fact that you

are right makes it that much worse.

For DJ - You asked what I thought about a lot of

things involving some kind of conspiracy invoving the

Group of 30 and lots of other spooky people trying to

control the gold market or something like that.

I am actually a member of the "group of five".

This group comprises myself, my wife, one Golden Retriever,

a Ridgeback, and a Mixed Breed. The dogs ( using majority

voting and DOGS RIGHTS ) have taken over the group. We are

now actively persuing a corner on South African dog food.

Boyoboyoboy - I think all our problems have been

caused by Bernatz' gold from dirt machine - He must

have gotten the thing working.

Asia still melting. My heart goes out to those people.

Geese know about these things. Now fuguring how things are going to fall out, that is the hard part.

South Korea Seoul Composite ^KS11 11:38PM 438.17 -12.47 -2.77%
Indonesia Jakarta Composite ^JKSE 11:38PM 401.050 -9.156 -2.23%
Japan Nikkei 225 ^N225 11:38PM 15913.29 -808.29 -4.83%
Hong Kong Hang Seng ^HSI 11:30PM 10370.53 -215.83 -2.04%

Monday November 24, 10:44 pm Eastern Time

Japan premium widens to 75 bps on Yamaichi woes

TOKYO, Nov 25 ( Reuters ) - The Japan premium, or the extra cost to Japanese banks of raising funds in the eurodollar interbank market, widened in
Tokyo on Tuesday following Yamaichi Securities Co Ltd's ( 8602.T ) decision to shut down, money traders said.

In the eurodollar interbank market, Japanese banks were paying a premium of about 75 basis points ( bps ) over the prevailing three-month eurodollar
deposit rate for major European and American banks of 5.8125 percent. The premium stood at about 53 basis points on Friday.

Yamaichi's decision to shut down its operations has reignited concern about Japan's financial system and is forcing Japanese banks to raise their bids in
order to secure eurodollar funds, a money broker said.

``Borrowers have been significantly raising the level of their bids in order to raise funds,'' the money broker said.

``There is also a disparity in fund-raising costs among Japanese banks. The premium a bank needs to pay differs depending on its reputation in the
market,'' the broker said.

Traders added that trade in the eurodollar market has been light so far on Tuesday.

The premium may widen as far as 100 basis points toward the year-end, another money broker said.

``The premium widened to around one percent at the time of the Daiwa Bank scandal, and we may see a similar situation toward the year-end,'' the
second broker said.

There are few foreign banks who are willing to lend to Japanese banks anymore, he said.

The Japan premium surged to 100 basis points in October 1995, as the credibility of Japan's financial system suffered a blow after a scandal involving
massive losses from unauthorised trading at Daiwa Bank.

ARE THEY GOING TO BORROW AT THESE RATES RATHER THAN SELL U.S TREASURIES, I DON'T THINK SO.

DJ,

Can I join too? I always wanted to be part of the power elite. I am also paranoid enough.

Mo in To

Japan -904 -5.4%
-----------------------------------------------
Avid chatter
-For what it's worth, I have this old DOS version of a "black box" program called AIQ. It gives these canned readings of where it thinks the market will go. There are several confirmation procedures required, but every now and again I dig it out to have a look. This evening it is indicating the maximum bearish reading possible for the program. Not an overly reliable program, and I don't use it much any more. It was my first venture into computerized investing several years ago. Anyway for what it's worth it says "100 down", very bearish.

-from the charts i ve seen tonite including SPX, INDU & COMP...all of the stochastics are ROLLING OVER at the TOP... NOT TOO GOOD OF A TURKEY DAY for ma and pa : )

-There's some classic trendline breaking stuff going on now on all the major indexes. The market will be extremely hard pressed move up now. spx 900 is in the realm of where I think we could go.

-don't let tonite's spoos fool u...it's gonna be a BIG DOWN day again tomorrow...probably worse than today...nasdaq in real bad shape... and i heard DELL was DOWN after announcing it s earnings...

-BLOOD ( RED ) all over ASIA...DOWN DOWN DOWN we go and where it stops nobody KNOWS...

-before it s ALL over Japan will probably BREAK 14,000

I'm gonna say this real slow, but I'm only gonna say it once: This is a bull market. Its in a correction, but it IS a bull. When the bottom we are probing for now is in, we will go MUCH higher. Most of the $$$ made in the next 6 months will be made on the long side. So enjoy the next few days, cause Santa aint gonna be good to you this year. BTW, I'm holding a short overnite.: )

----------------------------------------------------------------------------
Japanese share market urls
http://www.quotejapan.co.jp/
http://www.gulf.or.jp/~taku/
http://www.globe.or.jp/sitm/
http://www.yk.rim.or.jp/~pxar/
http://www.k-uchida.com/
http://web.kyoto-inet.or.jp/people/vesting/
http://www.yk.rim.or.jp/~keiji/index.htm
http://www.t3.rim.or.jp/~oku/
http://www2a.meshnet.or.jp/~tmi
http://www.asahi-net.or.jp/~nf5m-hym/
http://www2.nkansai.or.jp/users/ken/
http://www.voicenet.co.jp/~ysa/
http://www.wink.co.jp/~tfukunaga
http://www.fuji-mt.or.jp/~ishiitam/
http://village.infoweb.or.jp/~yassan/index.htm
http://www.kyas.com/club9/index.html
http://home.interlink.or.jp/~swic/
http://www.na.rim.or.jp/~abraham/
http://www.japan-net.or.jp/~chita/
http://www.venus.dtinet.or.jp/~kaznishi/

LGB2,

Re: your 21:50 post. Let's face it, it's like Lenny Bruce said once, my cousin Morty committed suicide and left a note,
"I admit it, we killed him"
Signed,
Morty

The world wide conspiracies will always be with us.

Mo in To