Gold Discussion for Investors and Market Analysts

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(Thu Nov 27 1997 00:06 - ID#401460)
I better get to work.
I told my kid he can have skates now or a skate factory later. He went out, got a job and bought the skates anyway.

God Bless All

(Thu Nov 27 1997 00:11 - ID#200173)
Don't worry so much about Japan ...
for the time being.

South Korea Seoul Composite ^KS11 12:06AM 433.80 -4.90 -1.12%
Hong Kong Hang Seng ^HSI 11:30PM 10395.04 -195.07 -1.84%

The region is feeding on itself. South Korea is pulling Japan down ...
and aroung and around it goes and then it spreads to Europe... and then ... it visits North America. ( IMHO )

(Thu Nov 27 1997 00:15 - ID#200173)
This is very painful Japan ... it is getting very nasty
Wednesday November 26, 11:13 pm Eastern Time

Japan premium widens to about 94 basis points

TOKYO, Nov 27 ( Reuters ) - The Japan premium, the extra cost to Japanese banks of raising funds in the eurodollar interbank market, widened to 94
basis points for interest rates on three-month eurodollars on Thursday, traders said.

The widening in the premium reflected growing pessimism about Japan's financial sector after Moody's Investors Service said on Wednesday that it had
placed the credit ratings of five Japanese banks under review for a possible downgrade.

The five banks are the Long-Term Credit Bank of Japan Ltd ( LTCB ) ( 8303.T ) , Nippon Credit Bank Ltd ( 8304.T ) , Mitsui Trust & Banking Co Ltd
( 8401.T ) , Yasuda Trust & Banking Co Ltd ( 8404.T ) and Chuo Trust & Banking Co Ltd ( 8408.T ) .

Moody's announcement exacerbated the market's lack of faith in Japan's financial system, as it came on the heels of a series of failures of Japanese banks
and brokerage houses, traders said.

In the eurodollar interbank market, Japanese banks were paying a premium of about 94 basis points ( bps ) over the prevailing three-month eurodollar rate
of 5.8125 percent for major European and American banks.

The Japan premium was around 84 basis points on Wednesday, up from about 75 basis points on Tuesday.

The Bank of Japan's recent massive infusion of funds into Japan's money market to provide liquidity to financial institutions was not enough to temper the
market's pessimism, a trader for a money brokerage said.

``No matter what type of stance the BOJ takes, it is not going to change Japan's economic fundamentals, and it is not going to change the way foreign
banks view their Japanese counterparts,'' the trader said.

The Japan premium is likely to keep widening for some time, the trader said.

``It is likely to remain wide or widen further. No one thinks the situation will get drastically better ( for Japanese banks ) very soon,'' he said.

(Thu Nov 27 1997 00:21 - ID#373403)
Inside the head of Japanese bankers
How do they expect us to get healthier to repay our borrowings when they loan at unprofitable rates?

I guess they don't care about our health.

Let's make high risk loans at rates which support our borrowing rate. Then we can muddle through to a profitable end.

(Thu Nov 27 1997 00:25 - ID#257148)
a sunny evening, tucks in paradise
Gday, ref your Wed Nov 26 1997 07:15.

Welcome to our little group.
I could not help but notice your "I have been a gold bear for years....for my own account, for client accoutns and for the daily newsletter I produce for clients around the world......and........when they're cryin', you should be buyin'" quip, I remembered:

Date: Sat Oct 11 1997 08:30
ROB ( The Gartman Letter ) ID#40883:
Bart And Group- I recieved my daily copy of the Gartman Letter yesterday morning and found some interesting comments. In his precious metals section he made the following comments.
" During the day we monitor a web-page/chat line for gold trader's (, for those of you who are interested ) , and in the past two weeks, the " volume" and excitement amongst the gold traders has been more than palpable... it had become almost hysterical. We recalled our old trading philosophy: when they're yelling were selling. The metals traders were yellen yesterday morning following the Buba's decision. their collective yelling was wrong."

tgl, are you Mr Gartman?

If you are not, please ignore the rest of this letter, it is meant for Mr Gartman only. I shall, in that case assume you merely share his views, and there is nothing wrong with that.... contrary views are the grist for our better understandings...., I welcome contrary views especially when they are framed in the analysis you have brought to your posts...


If you are Mr Gartman ( or a subscriber to his newsletter ) you might be interested in this:

Date: Sun Oct 12 1997 19:29
Dr. G. Paulson / California ( Gartman Letter - Bad Investment Advice!!! ) ID#271346:
Bob: I am a FORMER subcriber to the Gartman Letter. I lost more than 60% on his recommendations over a period of three years. I suggest you don't follow his advice! Indeed I feel very confident in using Gartman as a CONTRARY INDICATOR!

Mr Gartman, I invite you once more to answer a disgruntled client here on kitco, the public forum you referred to in *The Gartman Letter* ---tgl??

(Thu Nov 27 1997 00:27 - ID#288155)
A.Goose@ If you want a little scare, take a look at this site...
I came upon this whilst following another thread

this site provides more Bundesbank info than one usually
finds readily available ( for free )

(Thu Nov 27 1997 00:28 - ID#373403)
Very dumb question probably
What is the actual mechanism involved for the gold price going up or down? Is it by formula? Based on numbers of buy/sell requests? How about the DJIA?

(Thu Nov 27 1997 00:30 - ID#227238)
Kev: Try The ISP changed the its name slightly by adding "net" to the original. I think they stopped accepting the old address in Sept. ....... If that don't work, I'll try bringing my account up to date.

(Thu Nov 27 1997 00:42 - ID#200173)
Problem loans reported by Japan's 19 big banks totalled 16.1 trillion yen as of the end of Sept
``Overall disposal of problems loans at Japan's financial nstitutions has been progressing steadily,'' Matsushita said.


(Thu Nov 27 1997 00:44 - ID#227238)
How do they do that????
themissinglink__A: There are many gold markets around the world and all set prices in there own fashion. The most common markets to this forum are the London spot which is fixed - literally - by a handful of dealers who meet twice a day and determine the spot price.

The US futures price is determined by open outcry bidding on the floor of the Comex in NY. The action is handled by floor brokers, who buy and sell, and determine the price in a form of auction process - "the open outcry". ...... That's the short form answer. Hope it helps.

(Thu Nov 27 1997 00:45 - ID#288155)
W H A T ?
`MOUNTING LOSSES,'" reported a well-placed London banking insider to
EIR today.

"I am told to expect some very senior heads to roll in Zurich on Friday as well. Nobody inside the bank is admitting how big the losses are.

As well, the entire Quant-Asia team and Emerging Market Debt team of
Deutsche Morgan Grenfell in London has gone as well.

Mark Mobius of Templeton Mutual Fund is openly blaming derivatives
leverage of hedge funds for the Asia crises, and the Institute for
International Finance, the group of international banks, today issued a call for new Basle Bank Capital rules to force uniform risk set-asides for bank off-balance sheet derivatives exposure.

The recent Asia crisis has given them a real sense of alarm for the
first time to the HUGE OFF-BALANCE SHEET ( caps SDRer )
derivatives exposure."

(Thu Nov 27 1997 00:53 - ID#227238)
The unpleasantness begins to widen??
SDRer__A: A most interesting report on the ubiquitous derivatives market. What has been so widely reported and feared for so long, may now be coming to pass. That is an unraveling of the worldwide derivatives market. ..... A default here. A default there. And soon your talking about a real disaster.

(Thu Nov 27 1997 00:56 - ID#393224)
Gobble gobble gobble...baaggggaaaaaaaaaaaaaaaaaaaaaaaakkk!!!!!!!!!!

( PS -- that was the sound of a goldbug - not a turkey - though some may think the two are synonymous. Aussie turkeys got slaughtered on the gold share market today - and we don't even celebrate Thanksgiving ) .

(Thu Nov 27 1997 01:01 - ID#247273)

Some thinking and some incubation of thoughts,
maybe to some end, but trying like many to rationalize the behavior of the US stock market, posted at this late hour so as not to unduly load the pipeline. Comments welcome, as I am not a disruptor setting the bait, and I value the experience of those tempered in the fire ( i.e., losing money in the PM market )

Gold and its potential role in balanced transactions:

We are in a crisis for the yellow metal, and it could have extensive consequences. Why is gold valuable, or for that matter, why is anything valuable to people? The simple answer is perception ( demand ) , but let us not leave out the fundamental,underlying characteristic of rarity. Gold and silver and platinum are rare in the earths crust, and have these estimated occurences:

silver 10 ( exp -8 ) % of the earths crust = .0000000001
gold 10 ( exp-9 ) % of the earths crust = .00000000001
platinum 5 X 10 ( exp -7 ) % of the earths crust = .00000005

Consider that these metals have a value based primarily on their rarity. Secondly on their industrial utility. The rarity is the root cause of the value, as man has proven to himself over and over again throughout history. And that long established value was precisely the reason for the rich history of gold as money. There has always been demand for ( gold ) money, because it can fetch many things for man. The permanence and storability of gold, plus its allure in and of itself, have always been viewed as advantages of gold inherent in its monetary qualities.
But the complexity of society has given us many other surrogates for money and value. Rarity is in an of itself not sufficient to satisfy all the monetary ( transaction ) needs of man anymore. Man has redefined money, or substitutes thereof, as many different things. Wealth is not defined in gold or real estate any longer. It is ownership of anything imaginable. It can even be ownership of nothing more than information, totally abstracted from reality. And of course it can be ownership in corporations, or debt instruments ( promises ) , or anything that represents a TRANSACTION. The transaction, therefore, has become paramount over the actual people involved or even the representative goods and or services involved. GDP, the DOW, Share prices, and all other metrics used in our accounting are heavily focused on transactions. For example, the Corporate metrics are price to earnings ratio, which depend heavily on the transactions that support this metric, i.e., price ( dependent on the transactions on the stock exchange ) and earnings ( dependent on the sales transactions minus the expenses, also transactions ) . Price to book value is more relevant to the actual asset value of the company, a much more meaningful measure, since only half this ratio ( price on the stock exchange ) is dependent on transactions. In the beginning, these metrics were true measures of performance of the company, not the market or stock traded.
So here we have the crux of the matter. Gold is not dynamic ( normally ) but is more of a static asset, not dependent on transactions, but on its underlying intrinsic value derived from rarity. Gold can sit in the vault forever, and does not provide a tool for the magicians of finance to play the transactions game. There of course is the paper derivatives game, but the overwhelming game of pure transactive content in the world of modern finance cannot rely on gold for constant activity and dynamics required. The logical conclusion of this development is that transactions and volume ( in currency or number of transactions ) are all that matter to modern financial and economic systems. Well, this cant be far off, because the multiplier effect is well known to cause increasing perceived prosperity. Which of course means how many times the unit of currency is transacted per unit of time. Theory going of course, that the more times that currency unit turns over the more each person has a chance at getting some share of the transactions, and therefore, some of the wealth. The problem with such a system is that money supply can be increase to assist transactions increase, and the rising tide lifts all boats theory will create the illusion of true wealth for those in the lower tiers, because simple math teaches us that percentage increases are very much larger at lower volumes. The lions share of this large money supply and transactive wealth, however, is siphoned and retained by those in control of the transactions, be it government, corporations, or large volume players. The end game of course is that people are much more productive and willing to go along with a big numbers game, even though their actual yield is diluted and consumed by the overhead of the transactive volume, and by the overhead of time spent fueling the game upwards, both in psychological and in wasted energy resources. But the promise of the ever upward volume is the brass ring all reach for.
Someday we will cash out our chips and take real money home, but only when we have enough from this game. Ask any of us, and they will tell you that they want the numbers to go ever higher, so they can attain all the promise and security they need to get out. Why not? What else is there that could be so easy? 90 per cent is just showing up and being in the game.
How large can the transactive behavior become? Infinite quantities of money can be created, now, electronically, or printing, or credit, or debt. Therefore, the game can go on forever, as long as the people have the illusion of achieving the financial security for life, with low risk.
Gold can never fulfill this wishing game, because that is not what it is about. Gold can only provide stable, long term security, independent of transaction volume, with little reliance on the whims of the financial magicians. But this is not easy. It is liken to the old ways, where we put away food, and ammunition, and firewood, and other stores for the long term. This was our savings and security. It was not meant to make us rich, but only to keep us through the peaks and valleys of life.
We have all been "marginalized" ( Noam Chomsky ) by the drug-like stupor of the whirring and spinning of the financial markets. This is like going to Vegas, and seeing the bright lights, the spinning wheels, and the activity. Something primordial takes over, where we want to jump in and get ours. The more volume and activity we see, the more we want to get in. Throw in some liquor ( profits ) and some sex ( glamour stocks ) , and we have all the ingredients of a never-ending party. It is all too easy to create illusion rather than real wealth.
However, Transaction volume does not produce wealth. It legitimizes someone taking the real wealth out of a company ( issue more shares, options, buy backs, mergers, downsizing, commissions on transactions, analysis, advice, pundits, commentators, newsletters, taxman, etc. etc. etc. ) , leaving the shell and enough hype and promise to sell the dream.
Transaction volume also legitimizes debt ( expansion of whatever is used as money ) . The wealth effect, leveraging, futures, options, margins, etc., etc., etc. We have created a giant circus. It is entertainment as much as financial. The higher the trapeze ( averages ) goes, the more thrilled the crowd becomes.
Compare to simple physics. Mass is the intrinsic quality of real money, that can neither be created or destroyed, but the price it pays for this stability is that it needs a force to move it ( force = mass X acceleration ) . Acceleration is the impetus to exchange the money for something of equal value. This results in an equal and opposite reaction. That reaction is the impetus into the financial system to create more true value or exchanges, that can in turn generate another of the above described exchanges. As the movement builds, the money velocity increases to service the exchanges ( v= a X time ) , but the money itself does not increase. In fact, the money can move to velocity approaching relativistic speed. Most important here is the concept that velocity of money ( at normal rates ) can increase to whatever speed required to service exchanges of true wealth; the quantity of money does not increase. But these are true exchanges of wealth, and therefore obey the fundamental laws of financial physics.
Contrast this to the transaction volume concept introduced above, that allows infinite growth of artificial wealth exchanges that do not obey fundamental laws, i.e., Behold the Perpetual Motion Financial Machine!!!!!!!. No Mass! IF money is created and becomes cheapened in the transaction ( easy money ) then the transaction is not equal and opposite ( the equation is not a balanced equation anymore, but an inequality! ) All perpetual motion machines are evidences that work and energy and balancing of the equations can be cheated, but all the while showing much whirring and spinning! How does one sniff out and reveal the subterfuge and the violation of fundamental laws? Especially if the workings of the system are hidden?
The only way is to measure the true input and the true output, and compare those, and look for strings and wires attached. True metrics must be used in the measurement, such as the intrinsic value of company shares ( book value ) exchanged for true value of the money paid for them ( hours of labor or other unit that is quantifiable and comparable to value over time ) .
So our pretend money cannot define the exchange anymore, or the equality of the exchange, but only that it happened, i.e., the volume. Conversely, the volume now only indicates the exchange, not the equality or quality of the exchange. Instead we must somehow measure the input and output of the exchanges in total, and gauge the differential to know to what degree the fundamental laws are being bent, as a macro-indicator, or look at enough samples throughout the market to build confidence in some overall result. Since this type of statistical sampling is subject to chicanery, i.e. the DOW or other indicators being used, then we must use a macro indicator and method to get the overall market character. More perfectly, we could do both and validate one result against the other.
For the measurement of the integrity of the exchange of the paper markets, the variables are available to us now. The very much focused ratio of the the P/E is the ideal candidate for use in the metric of the exchange. Very high P/E s are well recognized as speculative, since this provides a pay-back time period for the initial investment. A 20 to 1 P/E means that it will take twenty years of corporate earnings for you to get your money back. The overall market P/E can be averaged, to reveal an approximate index of speculative content in the market. Some P/E s may reflect real growth and future value, but many others may not, therefore we can use the average over the market for a macro indicator. If we accept this average, as long as it is not doctored, then we can use this as a true attenuator of the value of the market. Hence, a 50 to 1 P/E, would be used to dilute the value of the exchanges involving that stock to 1/50 of the actual monetary value. At a P/E of 1, the full value of the transaction is counted. This reflects the true value of the company and the transaction. Growth factors beyond a year are much discounted herein, because corporate planning and reporting is only geared to short term ( less than a year ) profits. One must match the measuring tool to the system being measured.

` So, the true value of the stock transaction is
E/P X Sell Price = V.E. ( value exchange ) .

Now, what about volume adjustments? High volume signifies speculation, which rewards the transaction volume game, so this also needs adjustment. Volume is only significant in relation to the number of shares issued. So the adjustment here is volume/number of shares, but in an inverse sense. This provides Total number of shares / volume = churn factor
Our Turnover Exchange Value ( TEV ) now becomes::
V.E. X churn factor = TEV

Now we can build a truer index of the market, with some of the speculation neutralized. The numbers may not balloon out of sight as they do now, but they reflect reality, not speculation, and provide the truer present picture. All investors are free to speculate, but it does not get built in to the DOW. Volume is downplayed in preference to earnings. E/Ps of more than 1 are possible, but much more difficult.

This should give those pencil pushers a new game to manipulate and fiddle with, but it will take some time to suck the life out of it as they do the present system. However, the pencil is a little duller, and perhaps the rules evened towards the player ( investor ) .

These are some thoughts about the reasons for the decline of gold, since it does not fit the transacion/volume model, and could only do so in with the system being modified to accommodate the velocity of transactions. But arguably, there seems to be little trouble in velocity when paper derivatives ( futures, options ) of gold are being used as substitutes for the gold itself. This is only because of the lack of discipline in the system and sloppiness in the actual linkage, vis a vis the scant information about the actual stocks backing the paper, and the secrecy of those making the rules of the game.

Only believe in the Full Faith and Credit of Gold

Thanks to all for
Giving me this forum

(Thu Nov 27 1997 01:01 - ID#200173)
SDRer__A Have a great Thanksgiving ... along with all kitco viewers/posters
Unbelievable ... I love being scared or else I would not be a goldbug.

Who compiled the page you pointed me to?

(Thu Nov 27 1997 01:15 - ID#57232)
Time to log off! Yes - I think the world-wide derivatives trades are unwinding!
SDRer,Earl: Like your posts on derivatives in the last few minutes.

Earl: The late Senator Everett Dirkson could not have said it any better than you did!

All: When the "powers that be" - whoever they are - start attacking the derivatives traders, then you know there is trouble ahead. Wonder where all of these fellows were when there was a call to regulate world-wide derivatives trading months ago.

No one wants to put up the intersection street light until after the accident. I guess that is human nature.

Isn't it frustrating that Lyndon Larouche has been warning about this for over 6 months, but nobody listened? If he didn't have such crazy ideas, perhaps more might have!

(Thu Nov 27 1997 01:16 - ID#200173)
HK stocks end morning sharply down on derivatives

(Thu Nov 27 1997 01:17 - ID#257148)
Nick@C DMG, watch out... mate what did old salty say?

(Thu Nov 27 1997 01:20 - ID#257148)
Darn it JTF, I was jus' about to post this, an you go to bed..

Your comments earlier likening today's computer market to the automobile market of the 30s is something I have been dwelling on too for a while. Part of the drop in computer price is due to efficiencies in production.

I seem to recall that the first ball-point pen wouldve costed $59 in 1980 dollars when it was first produced. The price drop was due to efficencies of mass production and intense competition. We are seeing exactly the same phenomenon today with computers.

However, getting back to the auto markets, there were many car makers all over the world heading into the depression, by the end of the 30s there were far fewer. Most of those companies that survived the depression and then benefitted from the boon of WWII form the core of those auto companies still in existance today.

The same, I suspect will happen with todays computer manufacturers. As the oversupply problems add to the high inventory and low stock turn, retailers and manufacturers will have to discount. The more they discount, the more difficult it will be to keep profitable. The name of the game is Beggar Thy Neighbour. This will lead to factory closures..., companies that are household names today, like Dusenberg, Nash, Cord were in the 20s will be forgotten tomorrow.

There may be no more room for the Macintosh than the Laguna. ( Sadness both )

Yet, I recall reading.... before the depression food was stored in an ice box, by the end of the 30s almost all houses with electricity in USA and Europe had fridges......

You wouldnt want to be manufacturing ice boxes when the market calls for refrigerators...but if you were manufacturing refrigerators, why youd be fine.

Even in a deflationary depression, some businesses thrive.

#$^%%$#@^%%$%#@#&&^%$#** ( ( ) & ) &#&*& ) ( _+ ) ( *

Happy Thanksgiving Y'all who celebrate it...

Don't forget, that means




(Thu Nov 27 1997 01:28 - ID#200173)
372.5 billion as of Oct 31 now 3.6 trillion ... and we haven't even started yet ...
Thursday November 27, 12:26 am Eastern Time

BOJ says its special loans rise to 3.6 trln yen

TOKYO, Nov 27 ( Reuters ) - The outstanding balance of the Bank of Japan's special loans extended to failed financial institutions including Yamaichi
Securities Co ( 8602.T ) totalled 3.6 trillion yen as of Thursday morning, BOJ Governor Yasuo Matsushita told a parliamentary committee on Thursday.

The outstanding special loans amounted to 372.5 billion yen as of the end of October, but failures of Yamaichi, Hokkaido Takushoku Bank Ltd, and
Sanyo Securities Co in November have raised the outstanding balance to 3.6 trillion yen, Matsushita said.

(Thu Nov 27 1997 01:33 - ID#210114)
Merrill Lynch's Accuracy
My initial contribution has attracted little attention.

Would like to repeat my question: "What is Merrill Lynch's accuracy when it comes to gold price forcasts?"

They are very bearish for the next two years. Just want to know how much we should be worried.

(Thu Nov 27 1997 01:36 - ID#57232)
Happy Thanksgiving
Aurator: I did notice your post before shutting down. My "real boss" has me by the ear, so I must go!

Best wishes to everyone at Kitco downunder and upover -- regardless of whether Thanksgiving is part of your world or not!

Vronsky: Saw your post on Lincoln's 1863 Thanksgiving Proclamation. His words are as appropriate now as they were then. Would that he were here now.

All: I think we all need to remember that investing in gold is only part of what we must do to prepare for the coming rainy day -- we must also reaffirm our ties with one another -- and with that mysterious Being in the Universe that made us all!

(Thu Nov 27 1997 01:40 - ID#200173)
Many are not posting tonight ... so don't get frustrated ... someone will respond

I believe that it has been posted here on previous occasions that Merrill Lynch was shorting gold and that their calls were self serving ( trying to drive the market in their desired direction ) . Others can answer better than I, but at least its a response.

(Thu Nov 27 1997 01:49 - ID#210114)
Thanx A.Goose
Thax for that. No offence but is this the opinion of a goldbug or a more objecytive investor??

(Thu Nov 27 1997 01:53 - ID#401460)
Do your homework!
Unfortunately, my experience has been that some brokers will put out a sell recommendation when they are actually accumulating. Some firms have a reputation for this - be careful and do your own research, especially during these times. Soon they all may have a problem or two.

Good Night
If you don't want the answer don't ask the question.

(Thu Nov 27 1997 01:57 - ID#210114)
Answers Gratefully Recieved
Thanx for that Highrise. I don't ask questions I don't want answered.

(Thu Nov 27 1997 01:58 - ID#200173)
I'm sure it was from a goldbug.
Most of the responses here are from goldbugs, not all but most.

I do remember posters noting that some houses have a habit of calling bottoms at the tops and visa versa, ... but unfortunately I do not remember to which houses they were referring.

Our wiser posters will have to respond to the accuracy of the Merrill's record. good luck.

I'm out of here.

(Thu Nov 27 1997 01:58 - ID#393224)
SPOCK-- Merrill Lynch is extremely accurate with their gold forcasts-- so take heed!! In 1980 as gold approached $850 /oz they turned bullish. If you do the exact OPPOSITE of M.L.'s recommendations, you should do OK. Remember that M.L. has a large interest in keeping the share bubble going. Would you ask a wolf for advice on becoming a vegetarian???

(Thu Nov 27 1997 02:21 - ID#257148)
livin' with the shades pulled down...

A blast from the past'''

Merle, oh Merle, what you doin?

Date: Wed Jun 04 1997 21:41 Insider ( MERRILL LYNCH's ( ML )
George S. Cole: Ref - "This is just PR proppoganda, not serious
analysis. it is also self-serving since Merril Lynch ( ML ) is
believed to be one of the biggest of the gold shorts. The real
reason they talk this way is that they know a rise in gold would
cost them much monry on their shorts. It would also be very
bearish for financial assets -- their primary business."
George, you have NO IDEA how close to the mark you are. ML is
far and away the world's largest marketers of GOLD CALL
OPTIONS. Their clients are the principal Central World Banks.
Merrrill derives an obcene amount of profits selling gold calls to
the hapless and naive public, who innocently believe that the
markets are not manipulated. The public will always be fleeced
by Wall Street. And there are two ways to ensure the SHEARING (
like in sheep ) : 1 ) ML sells CB gold bullion as agent, when the
price creeps up, and 2 ) ML's so-called analysts pooh-pooh gold
investments in the interim. During all this time the SEC and the
NASD look elsewhwere. There is much truth that some are above
the law.
In effect Merrill is an interested party protecting its large
clients: CENTRAL BANKS. And who gets the short end of the
stick?? Ironically, Merrill's HERD!


(Thu Nov 27 1997 02:26 - ID#401460)
Well Put, Thanks.
I have been told similar stories about ML's
recommendations in the equities market. I just get upset with the Goldbug generalizations that some make and which I felt I understood you to have made earlier tonight when you first posed the question- that is why I did not respond at that time. I just don't understand why some people come to a Gold Site. They ask for information and advice then once they get it they proceed to bash the source.
"is this the opinion of a goldbug or a more objecytive investor??"
Its late no offense meant, one has to be careful with this e-mail. {:- ) ={}} :::::
I am out of here too.

(Thu Nov 27 1997 02:43 - ID#210114)
I repeat: No Offence
Fair comment Highrise. Its just the cynic in me. You have to admit that just about everybody is out there pushing their own barrow.

I guess that I would classify myself as a Goldbug. I too beleive in the virtues of the yellow metal. I just like to make sure that I'm not deluding myself.

Just as an example; The Privateer is a goldbug. I think his pages are excellent but he did get it wrong with the October rally and the spot price thereafter. I'm suggesting that perhaps his belief in the virtue of the metal pre dispossed him to the more optimistic gold scenarios.

I will continue to ask questions, and I will continue to look forward to your replies and anyone else's who can be bothered. Just trying to absorb as much information as possible from people more in the know than me while keeping my feet on the ground.

(Thu Nov 27 1997 03:00 - ID#253393)
I'm a goldgug but I feel gold is under too much pressure right now. Its heading toward 1985 low of 285 and then? Where will it bottom?

(Thu Nov 27 1997 03:12 - ID#33164)
Happy Thanksgiving to All who celebrate today

Goodness! What's happened to Gold???!!

Hello! Aurator? JTF? Nick@C? Where's the other Nick/SF today?

JTF- Enjoy the day with your family, and best wishes to you all!

SDRer- Hello & regards. Thanks for that great IMS URL. Enjoy your day!

Seem to have missed so much again these past few days. One needs nerves of steel to play in these markets- or is it that I have come in at the wrong? /right? time!!

Thanks to Bart, for fixing up the time-warp.

Azau: Great post 01:01 for new pupils such as I. Thank you.

Best wishes to All for your Thanksgiving Day!

(Thu Nov 27 1997 03:22 - ID#257148)
warehouses piling up with computers-plastic flowers-vide, brick-brack & geegaws and kitsche
Well, I'm just glad it can't happen again.....

no mo' 'pressions..

This speculation and the resulting stock market crashes acted as a trigger to the already unstable U.S. economy. Due to the maldistribution of wealth, the economy of the 1920's was one very much dependent upon confidence.

The market crashes undermined this confidence. The rich stopped spending on luxury items, and slowed investments. The middle-class and poor stopped buying things with installment credit for fear of loosing their jobs, and not being able to pay the interest. As a result industrial production fell by more than 9% between the market crashes in October and December 192948. As a result jobs were lost, and soon people starting defaulting on their interest payment. Radios and cars bought with installment credit had to be returned. All of the sudden warehouses were piling up with inventory. The thriving industries that had been connected with the automobile and radio industries started falling apart.

Without a car people did not need fuel or tires; without a radio people had less need for electricity. On the international scene, the rich had practically stopped lending money to foreign countries. With such tremendous profits to be made in the stock market nobody wanted to make low interest loans. To protect the nation's businesses the U.S. imposed higher trade barriers ( Hawley-Smoot Tariff of 1930 ) . Foreigners stopped buying American products. More jobs were lost, more stores were closed, more banks went under, and more factories closed. Unemployment grew to five million in 1930, and up to thirteen million in 193249. The country spiraled quickly into catastrophe. The Great Depression had begun.

talkin to myself

lisening to that great american, Steve Goodman, Just Lucky, I guess.. You is missed. So is Jim Hendrix, whose birthday it is.

To the gold inside

(Thu Nov 27 1997 03:27 - ID#39845)
Great call Nick. Would you ask an economist what to do with your money. Straight out NO! What about the IMF? They are plugging beef like mad cow disease dosnt exist! Metaphors are my specialty. God help us! And gold
help you. More to follow but I got environmental duties. Tally ho.

(Thu Nov 27 1997 03:32 - ID#228128)
I'm not a goldbug but got interested in gold 2 years ago because I thought it an undervalued asset. I do recall the posts about Lynch that others have mentioned and quoted here. I wouldn't trust a brokerage house for investment recommendation, especially when it comes to gold. Gold in its various investment forms ( futures, stocks, bullion, etc. ) has in my limited experience more shadey operators than in other areas of investing. Gold also has a murky underworld of all sorts of political entities, Central Banks, brokerages, families/groups, that operate in secret and with their own agenda. The investing picture is less than clear and the footing is slippery. My thinking is that we will see a bottom sometime early to middle 1998, in the 240 - 270 area, unless this derivatives thing gets out of control. I can't tell you what I would place the odds of the later at. I doubt that anyone can.

(Thu Nov 27 1997 03:33 - ID#257148)
duck soup
colleeen, Good evening. Nick@Aussie has formed a chrysalis and metamorphosed into sharefin, that's similar but not identical to the soup.

Speaking of soup. it is what happens to gold bugs when squashed by the brutal manipulated ever-loving "truth" of the market....

But, what goes around, comes around, the lessons of history, nature abhors extremes, back and forth, look for the balance, the dynamic, motile balance... what goes down...what goes up..... there is a force averaging towards the mean....chaotic harmony...variance...there is much that is false out there...

The turkey is proving to be a good mother to 6 orphan ducklings.

(Thu Nov 27 1997 03:37 - ID#33164)
Aurator - your filing system??
Dear Aurator: Your 00:25 to tgl-

How do you organise these posts? Or do you just have a most amazing memory??!

Time now for me to get some order into my Kitco life....and any suggestions are most welcome!

URLS ex Kitco have reached huge proportions, but I've realised that a great deal of Kitcoites' postings have far more value than a a lot of those sites.

Take care- always good to see you.

(Thu Nov 27 1997 03:45 - ID#257148)
who me? Eidetic?
Colleeen, actually have most appalling memory..a 70's thing. But have always compensated by being appallingly organised..I can search through last 6 months or so in Marco Polo, some Macintosh software..kinda like a supercharged particularly useful when things get a little tedious in the present.. rewind and play a tape from yesterday.

Much wisdom@kitco

I am afraid that the Bowlderised Kitco has lost a zing..

away to look for a zing

(Thu Nov 27 1997 03:50 - ID#393224)
Hedgehog@metaphors r us-- g'day. The action in big Aussie gold shares today looked like panic selloff stuff to me. Even the big respectable multi-mineral companies like Western Mining Corporation ( WMC ) --gold/copper/alum/uranium/and big-time nickel--got slaughtered. So silly me--what did I do?? Bought up big-time of course. I'm the biggest contrarian in the world and tend to go overboard at selloffs. Many come out well--but on many I'm in too early and have to trade my way out of a bigger loss. IMHO--ayear from now many will be kicking themselves for not jumping into the molten-lava pool. I'm feeling a bit singed right now, but will be sipping margaritas on a beach this time next year.

G'day colleen. Almost time to get the third/fourth ( 280-300 ) range, fourth/fourth ( 250-280 ) range, fifth/ fourth etc. Wonder how many fourths there are in a whole?? I hope your 4th/4th costs you $350!!

Auratious--good posts tonight, mate. Surprised you're showin' yer face considering the performance of your cricketers. Best news for Kiwis today was that it rained!! BTW-- why did you send your under 13 girls team over here to play Australia??? The only gold you Kiwis are gonna see is if you trip over an Aussie at the Olympics. ( Wry, but not too wry, grin thingy ) .

(Thu Nov 27 1997 03:52 - ID#310407)
@ Puetz, Nikkei way up again,.... Gold Down Again, .....Kitcoites wrong again
Well I see the progostications of the Gloom & Doomers fail once again. Japan way up in spite of Brokerage failures, bank failures, Korea, massive devaluations througout Asia.

Then we have the mighty DOW, up several hundred points since Off White Monday, completely failing to crash a la Puetz's predictions of margin call snowballing.

Ahh, then theer's Gold. Not only failing to respond the way it "should" but being sold en masse by the very folks Kitcoites told us would rush to buy the stuff. Citizenry who's currency's are in trouble and who's confidence in their Governments bankinbg systems etc. has failed. The Asians.

Wrong again Kitcoites...wake up! Most of you live in the greatest country with the greatest economy of all time. On this Thanksgiving day, COUNT YER BLESSINGS and quit wishing for the end of the world! You'll just sit by disappointed as the rest of us go on and enjoy life ( and prosperity ) .

Puetz, where's my weekly crash beginning in the next couple of days prediction? I can't sleep without it!

(Thu Nov 27 1997 03:58 - ID#257148)
other codes......
Nick@C and I thought you were being kind, displaying a detente in our Trans-Tasman rivalry by not mentioning the NZ ( Oh my Ludd, another classic collapse ) cricket team. Well, I was obviously mistaken. Still, I was wondering, if those aussies are going to be so, you know, decent about the appalling NZ cricket team, I mean, how can I crow ( and that is different in US & Antipodean argot ) about the All Blacks? Well, thank you for insulting our girls blouse cricket team, looks like the gloves are off for footie mate. Go Jonah Lomu Go BLACK

oh yes

and gold...

(Thu Nov 27 1997 04:01 - ID#257148)
ethnocentric huh

Oh pulease

the best country

well, if the best country is measured by the number of enemies you have

well then, or the number of murders per capita

wise up

you have been told a bigger lie than you know\\\\

(Thu Nov 27 1997 04:08 - ID#257148)
Evil rats on no star live

Well, your post is some challenge! I must be saltier than I realised.

Thank you. I am going to have another run at it come sunrise in the antipodes.

Palindrome me again

(Thu Nov 27 1997 04:08 - ID#393224)
Auratious' Cricket Team
Don't worry, mate. Just takin' out our displeasure on the A.C.T. for what yer All Blacks have been doin' to us all these years. Loved yer car posts tonight, mate. My favourite was my Volvo P-1800 ( 1964 ) sports car. Went like the blazes!! Same one they used in the 60's series The Saint? ( Ivan Templar? ) ?? Gotta take the two rottweilers for a walk as it is almost dark. Am goin' lookin' for Central Bankers!! BBL.

(Thu Nov 27 1997 04:13 - ID#257148)
saints and sinners
Nick That's Simon Templar

and the conspiracy theorists amongst us will recognise the masonic connection in the fictitious name even if they don't recognise the allusion.

(Thu Nov 27 1997 04:38 - ID#257148)

Well, as long as I'm here, I have my undivided attention:

The Real Value of Gold

Gold is, without question, the best protection of purchasing
power. Throughout history gold has remained a valuable
commodity. According to the Old Testament, during the reign of
King Nebuchadnezzar, an ounce of gold brought 350 loaves of
bread; an ounce of gold today still buys about 350 loaves.
Considering how inflation has eaten away the value of modern
currencies makes the long-term value of gold quite clear.

To put things in the proper perspective, every paper currency
buys much less than it did in the early 1900s. Most people are
astonished these days when they are told that at one time a haircut
and shave in the U.S. could be gotten for a quarter. While the
purchasing power of paper currencies has eroded over the years,
the purchasing power of gold has almost doubled in the last
hundred years.

The real value of gold lies not in speculation but in the security it
offers. The value of gold, despite periodic ups and downs, lasts.
Over the long term, the purchasing power of gold endures.

Gold has been the choice of value and purchasing power since
ancient times. Its value lies in its scarcity. Although gold has been
mined and prized for thousands of years, only 110,000 metric
tons have ever been produced. Although alchemists through the
centuries have tried, no one -- not even modern scientists -- has
been able to synthesize or "create" gold. The dream of turning
lead into gold remains just that -- a dream. The supply of gold in
nature is severely limited. Less than 2,000 metric tons are mined
each year.

Gold resists the ravages of inflation. Governments around the
world can easily print more paper currency, thereby eroding its
purchasing power, but they can't make more gold. For this reason
many financial experts view gold as being the most secure asset in
an investor's portfolio.

Because of its intrinsic value, the purchasing power of gold has
survived through the ages -- through wars, famines, and natural
and man-made disasters. In fact, during times of crisis, the desire
for gold rises because people know that it is the only thing of
lasting economic value.

The Great Depression illustrates this well. In the first three years
following the Wall Street Crash, from September 1929 until April
1932, the Dow Jones Industrial Index fell from 382 to 56. This
was a decrease in value of an astonishing 85%. Close to 4,000
U.S. banks were ruined and were forced to shut their doors.
During these dark days, the price of gold rose. Investors who had
gold were better able to withstand the Depression than those who
didn't, and they were more likely to recover financially once the
Depression ended.

The price of gold also went up during the days that followed
Black Monday, October 19, 1987. Throughout history gold has
held its value when other investments, including paper currencies,
have fallen in value.

Just as gold is essential to a balanced investment portfolio, it is
also vital to the economy of a country. Gold represents stability in
an unstable, financial world. It provides the bedrock on which a
country's economy is built.

Today, Switzerland is the only country whose currency is still
backed by gold. Because of this, the Swiss franc enjoys
remarkable stability, and the country is a prime place in which to


John Disney

Ol' salty calling ol' crusty
pony up, amigo, in a trekker land
Au/Ag ratio.....
is you is
or is you ain't
my baby?

(Thu Nov 27 1997 04:55 - ID#393224)
Auratious--there I was in the middle of the golf course--almost dark--standing 10 meters from 4 'roos nibbling away--rotties standing at attention, waiting for me to move--and it hit me 'SIMON' -- betcha first thing I read when I get back is a slap on the wrist from Aur@ator!! Gettin' to know you well, mate. You realize of course, the next time I visit the other greatest country on the planet, you're gonna have to shout me a steinie or two. That last post mate, gives me great heart, as I am buyin' ancient relics as if they were goin' out of style. My missus saves her best dresses from 20 years ago, and lo and behold, they are all the rage!!! We're gonna be ragin' soon, mate. Got a bunch of lovely proof sets this week INCLUDING a KIWI 1/2 oz 1990 proof in a case ( minted in Canberra ) . The most beautiful coin I have ever seen in my life--bar none!!!

(Thu Nov 27 1997 04:59 - ID#33164)
Aurator FWIW -here too!
but not undividedly-sorry!

This rezoning thing has me on tenterhooks- the postponed hearing is today, and with various things happening, I'm back & forth..

Your many 'pearls' are appreciated -whether 'on' or 'off topic! It all helps the thinking and decision-making towards the end-goal.

Which in my situation will mean getting into gold in quite a large way, if I can get the timing right!

Please keep the posts coming-enjoy them all. Regards

(Thu Nov 27 1997 05:05 - ID#257148)
 
didja save your platform shoes? 24"
It'll be my pleasure, stenies on me ( although, having tasted La blattes ( ?? ) a Canuk brew loved in Guernsey & Toronto, I am tempted to forego putting a few  in the direction of a NZ beer barron ( may they all get cyrrhosis of the liver ) in favour/favor/favur of Labattes,,

Nick, gimme a quick yre local time check plse, BJ's a-beckoning.... ) )

(Thu Nov 27 1997 05:05 - ID#33164)
Your wife has the right idea-I do the same thing. Sometimes they even land up as scarves! We're sort of long-term investors!! {;-}}- and I'm sure she would also be a lover of gold for the same reasons. pl.give her my regards.

Thanks for post. Why on earth would I want to buy my last 1/4 at $350? I'm hoping that the timing will be right at $240 !! January?


(Thu Nov 27 1997 05:09 - ID#393224)
In the nick of time
At the tone it will be 9:10 pm and 3 seconds. Beeeeeeeeeeeeeeeeeeeeep.

(Thu Nov 27 1997 05:15 - ID#393224)
European markets
Europe starting out all in the black--except UK-.05% and Finland -.36%.
They will waffle while the Yanks give thanks ( and pig out ) .

(Thu Nov 27 1997 05:16 - ID#257148)
time for the real people to wake up, the homunculi go to bed...
Nick, we 2 hours ahead and 5 years behind

nite all

BTW Nick did I tell ya, once I sell de farm, am thinking of going to Irving and taking up roller-blading?

where dat map?

(Thu Nov 27 1997 05:23 - ID#432148)
Good ole U.S. of A
AURATOR: You will have to forgive old LGB for his patriotism. It is natural to defend ones own tribe, goes back a long way. Survival I guess its called. We Yanks tend to get carried away some times it is true. But we have given a bit to the world too you know. We, like the Aussies and New Zealanders and Canadians have gone off to fight for other peoples freedom a couple times ( the WW's ) and then given them the $$ to recoup, so we can't be all bad. Sometimes I grant, as a Libertarian, we go off half cocked to fight where we should have let the natives sink or swim. I would have put Vietnam and Korea and a few other places in that catagory. Iraq you ask? Well, that oil is pretty important to the world at a cheap price isn't it? I think Hitlers and Sadaams should be fought for the sake of freedom, for others if not our own. Would be interested in your take on this?

(Thu Nov 27 1997 05:23 - ID#33164)
News Server
Aurator, Nick@C, All

During the last rushed week, I glimpsed various posters complimenting News Server on his/her URL for a Search Engine [ I think!]

Does anyone happen to have it handy?

Thanks in advance.

(Thu Nov 27 1997 05:24 - ID#393224)
G'nite Auratious
Now I lay me down to sleep
I pray my gold you'll safely keep
If gold should tank before I wake
I pray the Central Bankers you'll come and take.

(Thu Nov 27 1997 05:31 - ID#257148)
Anyone want to buy some really cool crystals..?
This is the end, my friend, the end

Gold, now that it has no monetary value, is found to be the ultimate snake oil.
) ) ) ) ) ) ) ) ) )

Contemporary Uses

Gold has been used in cases of depression, female reproductive function, right and left brain
disorders, physical coordination, skin diseases, burns, headaches, poor circulation, tissue
regeneration of the heart, pancreas, spleen, and muscular structure and disorders of the nervous
system. Gold can stimulate the pineal and pituitary glands, improve absorption of nutrients and
enhance the body's biomolecular functions. It also possesses remarkable flexibility-restoring
properties associated with physical motion.

sleeping in the barn tonite

(Thu Nov 27 1997 05:40 - ID#257148)
Goldbug23, LGB, Hep, those whose opinions I share, Those whose opinions I disagree with, why, if you are fighting for the right to disagree amongst ourselves, while giving succour to those who cannot fight for themselves, why, I'd be proud to stand at your side.

That is what our fathers, our grandfathers, our nations, have done throughout our histories,

We shall always do so.

And our mothers, our wives, our daughters, they are those who are hurt the most.

remember. My great-grandmother. 4 of her 5 sons were killed within the first 3 months of WW1.

go in peace, mes amis


(Thu Nov 27 1997 05:49 - ID#432148)
AZAU: Ur 01:01 is most interesting. You have obviously given your subject a lot of study and thot. In the end as you say its all standing on the "faith" of those using the "system". With an estimated 60 trillion in derivitives chasing around the world and human nature being what it is, when the whole thing starts to unravel ( has it started? ) we will be getting back to basics one way or the other. My bet is to restore "faith" the common man ( now there is one hell of a phrase ) will insist on reverting to the yeller metal. Like a poll shows the Swiss are having none of the decoupling their economists and leaders are proposing. Time will tell. How much time? You can't patch a piece of cloth forever, can you?

(Thu Nov 27 1997 05:52 - ID#257148)
why is there not another word for synonim?
colleeen this is it

many many thanks for this, wonderful search indian.

Colleeen, what do you do with a bunch of ducklings brought up by a turkey? will they learn to swim? anyone URL me?

Konrad Lorenz, come in

(Thu Nov 27 1997 06:21 - ID#39845)
yes aurator all will learn to swim except the one which wields the sword.

(Thu Nov 27 1997 06:29 - ID#33164)
Eat them at Christmas, Aurator?
[Rather a wild statement from a vegetarian!![;-}}]

But yes,Aurator, the art of swimming is inherent in a duck, is it not?
Like us, the instinct for survival is paramount. Markets up, Markets down, we'll all get through it somehow. Some will just be better swimmers?

Thanks for the URL!

I have been battling to get into the nternational Monetary System's [given to us by SDRer] Home page, to see if there's any fresh news on it for today, with no success. Shall now attempt to find it with the new URL.

Why is gold dropping so fast, do you know?

(Thu Nov 27 1997 06:36 - ID#39845)
keepin it lowkey
yeh, but don't a swimmer have some kind

(Thu Nov 27 1997 06:46 - ID#33164)
Aurator's Mac / My PC

Re Indexing/Filing Kitco posts for instant access

I don't have a Macintosh. So where would I find the same facility on Win95, do you think?

Wish we had a holiday here today!

Hello Hedgehog! Don't you think that a swimmer shows more a sense for survival? After all, if one doesn't swim, one must surely sink?

(Thu Nov 27 1997 06:47 - ID#257148)
this julian calendar is not a univeral calendar
clleeen, do I know? No.
have I heard? Yes

Christians and winter breed great vulnerabilities now.

Those who have the ears of many, have the voice of a few

We must trust our hearts today

so bright, the stars tonight.

(Thu Nov 27 1997 06:54 - ID#33164)
Christians and winter breed great vulnerabilities now.

is such a sad statement from you...what is in your thoughts right now?

(Thu Nov 27 1997 07:01 - ID#39845)
ah! what a mindless activity. arbitrary, but, yes despotic.
gold skies at night a goldbugs delight
gold skies at morn a speculator is born

(Thu Nov 27 1997 07:05 - ID#39845)
I find that very hard to believe Max.

(Thu Nov 27 1997 07:14 - ID#36965)
Joke for a Thanksgiving
Some of you are working today, others are pretending gold has present value and are eating turkey, oblivious to it all. I fall in the second group and feel to post some good cheer so that we don't somber each other to death.

The nuns at a small convent were happy to learn that an anonymous
donor had left his modest estate to them. Each nun had been left $50
in cash to give away as she saw fit.

Each nun announced how she would spend her bequest. Sister Catherine
Ann decided to give her share to the first poor person she saw.

As she said this, she looked out the window and saw a man leaning
against the telephone pole across the street, and he indeed looked

She immediately left the convent and walked toward the man. He had
obviously known better days. The good nun felt he had been sent by
Heaven to receive her offering.

She pressed the $50 into the man's hands and said, "Godspeed, my good

As she left, the man called out to her, "What is your name?"

Shyly, she replied, "Sister Catherine Ann."

The following evening, the man returned to the convent and rang the
bell. "I'd like to see Sister Catherine Ann," he said.

The nun at the door answered, "I'm sorry, but I cannot disturb her
right now. She's in the chapel. May I give her a message?"

"Yes," said the man gleefully. "Give her this $100 and tell her
Godspeed came in second at the horse race."

(Thu Nov 27 1997 07:45 - ID#364147)
Happy turkey day from the frozen tundra!!! Will get somethin off ta ya later in the day.......One good thing about today= Comex gold ain't plunging~~~~~~~~~~~~~~~~

(Thu Nov 27 1997 07:48 - ID#364147)
@ Don't kill dem turkeys and Colleen
Welcome fellow vegetarian!!! Shame on all you turkey murderers~~~~~~

Crystal Ball
(Thu Nov 27 1997 07:51 - ID#287367)
I'll be thinking of you as I eat my turkey with Canberra sauce.

(Thu Nov 27 1997 08:04 - ID#33164)
Golden Moments
Enjoy the rest of this beautiful afternoon/morning?/night?

Isn't Kitco different today? There was obviously so much going on yesterday and I missed 90% of it!

Will there be many calms before the storm, I wonder?

Ted & Tort-take care..thanks for lightening up the day.

Cheers for now.

(Thu Nov 27 1997 08:20 - ID#263259)
Where to begin in futures options?
This sounds like a good time to ask. After 15 years of buying physical and 10 years of gold stocks I'm ready to buy a few futures options. Where does one begin? Where does one go to avoid the crooks? Who are some brokers to avoid and others who are more-or-less honest?

(Thu Nov 27 1997 08:23 - ID#426220)
860 GLOBAL SOURCES of Daily Business & Financial News From 6 Continents
No website MORE completely covers important world events and happenings like GOLD-EAGLE's "Global News." Therefore, we changed the section name from "Daily News" to "Global News" - grouped by continents.

USA ( 111 ) , Canada ( 80 ) , International ( 20 ) , Europe ( 101 ) , Africa ( 58 ) , South Africa ( 16 ) , Asia ( 200 ) , Australia ( 50 ) , Oceania ( 16 ) , South America ( 208 ) . Just CLICK below the clocks on continent name you desire. All major languages included:

(Thu Nov 27 1997 08:34 - ID#348169)
@Thanksgiving Trading and @Ted
First off Happy Thanksgiving to All.
Next: Here is some trading that will take place.

"Thursday, November 27 All CBOT/MidAm day trading will be closed;
Evening pit and Project A trading sessions will be closed.

Friday, November 28 All CBOT Financial, Agricultural, Insurance and
Metal contracts will close at 12:10 p.m. CBOT Dow contracts will close at
12:15 p.m.
Trading will close at 12:15 p.m. in the following MidAm contracts: Live
Cattle; Hogs; Australian Dollar; British Pound; Canadian Dollar; Deutsche
Mark; Japanese Yen; Swiss Franc; Eurodollar; U.S. Treasury Bill.
Trading will close at 12:30 p.m. in the following MidAm contracts: All
grain and soybean contracts; U.S. Treasury Bond; U.S. Treasury Bond
Option; 5- and 10-Year U.S. Treasury Notes.

Trading in New York Silver, New York Gold, Options on New York Gold
Futures, and Platinum contracts will be closed.

Chicago Mercantile Exchange Thanksgiving
Wednesday, Nov 26 RTH Close: Interest Rates: 12 noon Currencies:
12 noon
Agriculturals: 12 noon
Equities: 3:15 p.m.
GLOBEX Begins 2:30 p.m
GLOBEX halts 10:30 a.m.
Thursday, Nov 27 THANKSGIVING RTH: Closed
GLOBEX: Open ( Limited )
GLOBEX reopens 5:30 p.m. Thursday
Friday, Nov 28 GLOBEX Close for: Interest Rates: 7:05 a.m.
Currencies: 7:05 a.m.
Equities: 8:15 a.m.
E - Mini: 12:15 p.m.
RTH Regular Open
RTH Close: Interest Rates: 12 noon
Currencies: 12 noon
Agriculturals: 12 noon
Equities: 12:15 p.m.

Lastly - Since I had my turkey weeks ago, I am now on Ted's side. How about we give all those Turkey butchers some indigestion, Ted, and remind them about how the world treated them the last time ( in July ) that America tried to shut down for the weekend? ;- ) And that originated with an allie and true friend - Australia. This time how about another sneak attack from the land of the Rising Sun? Just a reminder - Always have glasses of water on the table - in case of choking emergencys.

Steve - Perth
(Thu Nov 27 1997 08:53 - ID#284177)
La Rouche Meanderings
Korea and Japan: Derivatives Blowout -- This System Is

EIR: Earlier on in the show we discussed the Vancouver Summit
meeting on Asian-Pacific affairs. I wanted to bring up at this point
the Yamaichi Securities issue, and also the call by the South
Korea Finance Minister seeking a $20 billion loan package from
the IMF for a bailout there.

LAROUCHE: Well, Yamaichi is the fourth largest brokerage in
Japan. Now, the problem here is one that was introduced to Japan
largely by Goldman Sachs, which is very hot, as we know, on
futures, the so-called derivatives, or side-bets, gambling side-bets,
which is what they really are. Now, in this case, what has come
to the surface -- as in the South Korea case -- is the significant
role of so-called off-balance-sheet futures, in aggravating, if not
entirely causing, the problems of both South Korea and Yamaichi,
and of the banks in Japan, which means that the Southeast Asia
crisis cannot possibly be contained. In no way.

First of all, the Asia crisis involves the principal markets for
Europe. Which means, that the entire European system is going to
go -- particularly continental Europe is going to go into a crisis,
through the shock waves of financial collapse coming out of Asia.

Now, of course, it's a major threat to the United States; Japan will
not dump -- at least at this point at least -- U.S. securities. But,
they will dump U.S. corporate bonds, corporate paper, in a quest
for dollars to try to balance their books in an emergency on the
short-term to deal with this. This means two things:

First of all, the financial shock waves are going to speed around
the world, and they're gonna hit the United States hard; and, the
printing presses of the Federal Reserve System cannot print
enough money, they cannot keep up with the impact about what
is going to hit the United States, because what is being detonated,
as the Yamaichi case warns us, and, as some of the futures
contracts off-balance-sheet in South Korea, is that what is being
triggered is the impact of a hundred-trillion-dollar equivalent
international derivatives bubble. Of which about $30 trillion of
this, is sitting on top of the United States' financial system. And,
there's no way that the Federal Reserve System could print
enough money, fast enough, to deal with this. They couldn't even
pull off the equivalent of a temporary stand-off the way the
Germans did in 1922-23. This system is finished. And, that's
what the lesson is of this lesson around Yamaichi.

(Thu Nov 27 1997 09:02 - ID#316193)
What "Another" has been speak-plain-talk

(Thu Nov 27 1997 09:13 - ID#234182)
Colleen re search engine
With thanks to Newsserver--the other recommended engine ( not indian ) is we had our turkey weeks past all the best to our bro's and sis's south of the 49 and north of 60 ... clear and cool in the Canadian Rockies... regards

(Thu Nov 27 1997 09:20 - ID#93232)

(Thu Nov 27 1997 09:28 - ID#36965)
Ted its good to hear from you. When gold stays the same rather than going down it seems like the old Gordon Lightfoot lyrics, It gets Feeling Better When I'm Feeling No Pain. Are you in Maine yet? I'm getting ready to blast the old fowl and devour its basted carcus. Until later Jose.

(Thu Nov 27 1997 09:32 - ID#147116)
rumor has it GOLD CALL OPTIONS WILL BE SOLD IN ROLLS ( toilet paper )
for use in all bathrooms starting monday....


Steve - Perth
(Thu Nov 27 1997 09:41 - ID#284177)
Great to see Tortfeasor Back! Keep those jokes coming!!
Steves specially edited: UPDATED NEWS VIA AUSTRALIA

Suicides increases in Hong Kong due to stock losses

Sth Korea - Workers' haven turns into jobless hell

China's bank bubble due to burst: experts

Yamaichi concealed losses for six years, says ex-chairman

Wave of fear as gold stocks battered again - Only two mines left?

Price falls in Gold make Paddington mine outlook grim

Prospects dim for Gold rig contractors

Japanese dump Aussie Bonds for European & US Bonds due to currency risk

Imports could drain $A under US60 - Devaluing down with Asia

U.S. Warns Iraq Has Global Attack Capability

US Warns New Weapons are Everywhere
Iraq taunts US to "Go ahead & bomb us"

Hong Kongers ignore 'don't panic' advice

Samsung slashes investment by a third

Latest Gold News from Australia - WA Gold tax may go

Deflation fears power gold's dive

Native Title affects Western Australia ( Senate Hansard )

Murdochs Newscorp now the Big Australian

David Hale asks whether IMF has the funds to bail out Korea

More Japanese Banks will fall, says ex MOF head
Investors will only sell US Treasuries is really "squeezed"

Rothschild Gold Fund says Resource shares to go sideways or down for 6 months

Chinese Sinkhole?

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

(Thu Nov 27 1997 09:47 - ID#364147)
@ TORT from the fozen tundra(and I ain't talkin Green Bay Wisc)
Small world ain't it!!---just e-mailed ya ( hope it gets there quicker than my mail I tried to send by the Canadian postal system.....C.U.P.W ( Canadian postal workers ( ??? ) union suk and the whole lot of em should be TERMINATED just like the air-traffic controllers!!!! and the union leadership ( ??? ) should be arrested for advocating violence and dis-obeyance of LAWS....

(Thu Nov 27 1997 09:53 - ID#158191)
What to do now
All you have to do is dollar cost average. I just invested 20% of my "gold" money in Fidelity's American Gold. If gold falls to $20 I buy an equal dollar amount which will obviously be a larger number of shares than I purchased the first time. I won't be fully invested until gold has fallen $100.

If you think gold can fall $200, then invest 10% each time.

What should you do if gold rises? We should all be that lucky!

(Thu Nov 27 1997 09:56 - ID#288157)
Torschlesspanik...Door-shut panic

from the past, we learn that

As the speculative boom continues, velocity of circulation and prices all continue to mount. At some stage, a few insiders decide to take their profits and sell out. At the top of the market there is hesitation, as new recruits to speculation are balanced by insiders who withdraw. Prices begin to level off. There may then ensue an uneasy period of financial distress. The term comes from corporate finance, where a firm is said to be in financial distress when it must contemplate the possibility, perhaps only a remote one, that it will not be able to meet its liabilities. For an economy as a whole, the equivalent is the awareness on the part of a considerable segment of the speculating community that a rush for liquidity--to get out of other assets and into money--may develop, with disastrous consequences for the prices of goods and securities, and leaving some speculative borrowers unable to pay off their loans. As distress persists, speculators realize, gradually or suddenly, that the market cannot go higher. It is time to withdraw. The race out of real or long-term financial assets and into money may turn into a stampede.

The specific signal that precipitates the crisis may be the failure of a bank or firm stretched too tight, the revelation of a swindle or defalcation by someone who sought to escape distress by dishonest means, or a fall in the price of the primary object of speculation as it, at first alone, is seen to be overpriced.

In any case, the rush is on. Prices decline. Bankruptcies increase. Liquidation sometimes is orderly, but more frequently degenerates into panic as the realization spreads that there is only so much money, not enough to enable everyone to sell out at the top. The word for this stage is revulsion.
Anatomy of a Typical Crisis

To: AZAU@01:01--My heartfelt thanks for a brilliant piece. You illuminate
dark corners that have caused disquiet for some time.

To: Colleen Hello! I have your e-mail address and will post as soon as I can duck the massed turkeys ( that is sooooo bad... ) . No later than this week-end, promise!
Thanks for your best wishes, enjoy your weekend. Best regards.

To my fellow Yanks~A Happy Thansgiving!
"For he lives twice who can at once employ
The present well, and ev'n the past enjoy."
Alexander Pope "Imitation of Martial"

Richard Burke
(Thu Nov 27 1997 09:59 - ID#411318)
The Coming Oil Shock
Leland: What a find. Coleman's report really puts the gold/oil/dollar issue in perspective. However, we also must remember that there seems to be less than a 100% certainty that the Euro $ will be created. One has to think that the US will be putting tremendous pressure on the members of the ECU to not go to the Euro $. George Cole and other economists lurking - what comments do you have on Coleman's analysis? Another - I hope you see this and comment.

(Thu Nov 27 1997 10:02 - ID#35767)
Internet Economist
Where is George S. Cole when we need him?

(Thu Nov 27 1997 10:09 - ID#426220)
REF: "The Australian dollar yesterday plunged to a four-year low, driven down by aggressive selling as Japanese investors dumped assets in response to the Asian financial crisis."

Is it not significant that the pronounced plunge in value of the Australian Dollar comes on the heels of its Central Bank's "brilliant" decision to dump its gold stores?! We can only have compassion for the hard-working Aussies whose life'savings are being debauched, due to a dumb decision by BUREAUCRATS, who sit smuggly in stuffed armchairs in the peace of mind knowing they have the guarantee that THEIR JOBS will not be affected by THEIR MONETARY BLUNDER. They should be "burned" in effigy... or stuffed like the TURKEYS THEY ARE!

(Thu Nov 27 1997 10:10 - ID#348169)
Lincoln's Thanksgiving Day Speech
Although not directed to anything so mundane as stock market's, an excerpt of Lincoln's speech ( posted yesterday by vronsky ) could almost have been written to describe the 'dipsters' of the late 1990's. "...Intoxicated with unbroken success, ...". We all know what happens after the intoxicated effects wear off, now don't we: Hangover!

(Thu Nov 27 1997 10:15 - ID#348169)
Whiling Away the Big Turkey Day
Last night's late night post by AZAU should give those in need of something to do today much to digest. Here it is:
Date: Thu Nov 27 1997 01:01
AZAU ( palindrome ) ID#247273:

(Thu Nov 27 1997 10:19 - ID#348286)
Tax Loss selling season is just around the corner. I beleive this year will be extremely hard on Gold shares in Canada. All the right reasons are in place to make this happen.
As I have expeceted Gold to go down to minimum 280., this may present the buy of the decade in mid to late December. The problem is that if Gold proceeds to the 230. - 250. range in Jan/Feb, the Gold shares will get clobbered even more.
Im now out of shares 100%, the big question is will December be the low?
Certainly, the share bids your going to see will seem rediculously low, but I suspect many will get filled anyways.........

Richard Burke
(Thu Nov 27 1997 10:20 - ID#411318)
The Coming Oil Shock
George Cole: Please pull yourself away from stuffing the turkey and look at Leland's 9:02 post. Comments please. Happy thanksgiving to all our friens in the US.

(Thu Nov 27 1997 10:22 - ID#262242)
To all in the U.S.A.
May this be a day of reflection & thanksgiving for the wonderful country God has given us. I hope you all are with your familys & enjoying a wonderful dinner.

Happy Thanksgiving to all.

(Thu Nov 27 1997 10:24 - ID#287207)
Lotsa Gold
Buying gold is no problem at the moment

Who would have thought 3 months ago that when the expected and often hoped for finacial disaster finally happened gold bugs would be amongst those most hurt by it. Now the problem is to see the signs of the expected rise. So far no one has demonstrated a method to see the future on this topic.

(Thu Nov 27 1997 10:28 - ID#356304)
shot in the foot?
Regarding the idea that a CB/gold country may be shooting itself in the foot by making/taking bearish gold comments/actions thereby hurting its own existing long gold positions seems foolish, what about the thought that the CB/gold country would benefit more by an offsetting gain in its existing long government securities positions? The trade-off may be worth it for its own accounts as well as the overall impact on the markets in general. Any thoughts on what that trade-off may be? How much lost and how much gained?

(Thu Nov 27 1997 10:37 - ID#31876)
Richard Burke, thanks for a valid point...

We all know that Soros has commented that the EMU is fundamentally
flawed. Among all the complexity to arrive at a common Euro currency,
there are two hurdles ( and I think Soros has these in mind ) , no flexibility for an individual nation to adjust CB interest rates and no
individual latitude to float or devalue currency when the need arises
to stimulate a country's exports. The EMU sounds more like a nightmare
than a dream.

Mike Stewart
(Thu Nov 27 1997 10:45 - ID#270253)
Toronto Golds
Toronto golds are down another percent this morning as New York rests. The damage is minor, but consistent with most issues hitting new lows.

My McClellan Summation index for Toronto mining issues is now at -1674 ( Bear Market bottom readings ) and will likely hit the rare level of -2000 by early next week. ( The oscillator was built to allow comparisons to activity in the general stock market since data is available back to 1962 ) The -2000 level in the New York markets hit in May 1970 ( -2470 ) , Sept 1974 ( -2063 ) , Mar 1980 ( -2131 ) . All were superb buying opportunities and emotionally difficult trades. Sounds familiar doesn't it.

(Thu Nov 27 1997 10:46 - ID#200200)
Excuse me, This is the reality ... coming soon to a country near you.
Thursday November 27, 4:21 am Eastern Time

Japan gold demand seen up despite financial woes

By Aya Takada

TOKYO, Nov 27 ( Reuters ) - Japan's latest financial crisis has sparked fears that some institutions might be forced to sell gold, pushing prices even lower,
but analysts and traders here say the turmoil is actually boosting local demand.

International concerns over possible central bank sales have already helped knock gold prices down to 12-= year lows, but Japan-based analysts said a
string of failures of Japanese financial institutions would not depress them further.

They added that the financial sector's woes were boosting demand as individual investors shifted some of their assets to gold bullion away from bank
deposits and securities.

A bullion house official said gold bullion sales had surged in the past 10 days in an apparent reaction to the failures of Hokkaido Takushoku Bank
( 8312.T ) and Yamaichi Securities Co Ltd ( 8602.T ) .

``Considering a bearish trend in gold prices and the yen's weakness against the dollar, it is not a good time for gold investment, but the financial turmoil has
apparently driven people to buy gold,'' the official said.

Another bullion house official said gold premiums in Japan were now quoted at about 20 U.S. cents per ounce over the London benchmark, up from flat
last week, reflecting growing gold demand from individual investors.

The yen-based retail gold price was 1,265 yen per gram, above this year's low of 1,202 yen, but retail gold sales more than doubled this week, the official

``The financial crisis is creating special gold demand among Japanese private investors, but I don't expect this demand will be enough to help the ailing
world gold market,'' he said.

Individual investors have started mobilising financial assets to disperse investment risk amid the financial turmoil, said Koichiro Kamei, a research manager
at the World Gold Council ( WGC ) , which represents most of the world's major gold producers.

``Even a small part of their assets, if shifted to gold, will create a major boost in gold demand,'' he said.

At the moment, Japanese private investors are estimated to hold about 1,800 to 2,000 tonnes of gold worth about 2.3 to 2.6 trillion yen, accounting for
0.2 percent of the 1,200 trillion yen in total financial assets held by Japanese individuals.

Analysts expected little impact on the market from the liquidation of gold accumuation plans run by financial casualties Yamaichi and Hokkaido Takushoku

Many other institutions offer such schemes, in which investors save a small sum every month for purchasing gold bullion or gold jewellery.

Spokesmen for Yamaichi and Hokkaido Takushoku declined to disclose how many investors held such accounts at their firms, or how many had already
closed their accounts.

WGC's Kamei estimated the total amount of gold involved in the schemes at the two institutions at less than one tonne.

``Sales of this amount of gold will not disrupt the gold market,'' Kamei said. ``I don't see any negative influence of the failures of Yamaichi and Hokkaido
Takushoku on the market.''

Bullion traders said so far they had not heard about gold sales related to cancellations of gold saving plans at the two institutions. They also said the
possible impact of such sales on gold prices would be almost nil.

Currently about 750,000 investors participate in gold saving schemes in Japan, purchasing about 40 tonnes of gold a year, gold refiner Mitsubishi Material

Japanese gold buying for private investment purposes amounted to some 80 tonnes last year, it said.

( ( Tokyo commodities desk +81 3 3432-7431, fax +81 3 3432

(Thu Nov 27 1997 10:49 - ID#34883)
A Fist Full of Yen
Newsflash: 1996, Japan's Central Bank lowers interest rates to 2%.

Update: 1997, 4th largest bank in Japan folds.

(Thu Nov 27 1997 11:15 - ID#31868)
Ah, excuse me. But that is a huge amount of gold. I refer of course to the two lines below from your last post. Where did/does/will all this gold come from?

Currently about 750,000 investors participate in gold saving schemes in Japan, purchasing about 40 tonnes of gold a year, gold refiner Mitsubishi Material

Japanese gold buying for private investment purposes amounted to some 80 tonnes last year, it said.

(Thu Nov 27 1997 11:16 - ID#288157)
11/27/97 16:01 GMT


Trade war between America and Europe? But that is all
supposed to be a thing of the past. Trade wars belong in
the 1930s, don't they? They're all mixed up with
protectionist blocs, imperialism, and the road to a shooting
war itself. Surely those times are not coming back?

An interesting read ( if you can get out of the kitchen, or away
from the table )

(Thu Nov 27 1997 11:21 - ID#200200)

Date: Thu Nov 27 1997 11:15
tolerant1 ( A.Goose ) ID#31868:

Your points are well taken. I can't answer them, that is why I posted the whole article. ???

(Thu Nov 27 1997 11:24 - ID#374302)
To Vronsky - Your 10:09
I just calculated that the Aussie Reserves sale of approximately 167 tons of gold has so far been profitable to the tune of US$300 million. I wish I could make that kind of "monetary blunder" !

(Thu Nov 27 1997 11:31 - ID#251107)

Hi to all. I have been lurking for some time and posted now and again. Today I can't control the burning desire to know in what country all you gold bugs actually reside.
Me I live in Western Australia. Kimberley country North West Australia. its 12:30am WST28/11/97
Hey! I know this is not on the topic of gold but there not much trading today and I feel that I have met many of you in many different circumstances.

Good luck next week Gold to drop 283 before rebounding to 377 in the new year.

(Thu Nov 27 1997 11:34 - ID#200200)
San Francisco area USA.
Haven't visited weatern Australia yet and want to badly. After this currency crisis sorts itself out I be spending some time over there.

(Thu Nov 27 1997 11:40 - ID#31868)
layover in NY
Soon to be living with feet up in Keywest while the world sorts itself out for the rest of eternity.

Its not a layed back as I would like but it will do.

(Thu Nov 27 1997 11:47 - ID#390214)
(Japanese selling Cdn bonds, Can $ drifting down,13% of Japanese offshore savings in Cdn bonds)
Traders said that the Canadian dollar had been belted in
the last couple of days, falling to a five-year-low against
the US dollar.

The fall sparked fears that Japanese investors, who hold
around 13 per cent of their offshore savings in Canadian
bonds, were bailing out.

(Thu Nov 27 1997 11:48 - ID#372285)
to asianmgt
In Atlanta ( for the moment ) . How's the Cable Beach Resort doing? And are they still digging up those lovely pink diamonds at the Argyle mine?

Mike Sheller
(Thu Nov 27 1997 11:49 - ID#347447)
Happy Thanksgiving
TOLERANT 1: Sounds good to me. Welcome to New York.
ALL: Surfed on in to wish EVERYONE a blessed Thanksgiving. My best to you all and your families and precious ones. Life is too short not to reflect on the good things we have received. Enjoy!

(Thu Nov 27 1997 11:51 - ID#250165)
Hi ..calling all u experts out there....Should I enter the market now or
wait.....Is the weakening of gold related to the global currency fiasco..

(Thu Nov 27 1997 11:52 - ID#372285)
To Bart and all
I have absolutely no idea why my ID No. keeps changing. It's still me, though.

(Thu Nov 27 1997 11:54 - ID#251107)

Cable Beach still there and wonderful. ( just over the sand dunes from where I sit. ) The Club is going OK as well. Mango session now as you may know. Just enjoyed one that was 3x the size of one of baseballs. Pure peach

(Thu Nov 27 1997 11:56 - ID#31868)
My most heartfelt and greatest fears have nothing to do with Europe. It is clear where the enemy is, Canada. I never realized how vicious these barbarians could be until I saw the documentary Canadian Bacon which depicts them as they really are. Those savages.

But take heart. The film shows vividly why we Americans should have no fear as our political and military leaders, along with a few loyal citizens show their resolve, inventiveness and highly capable thinking prowess.

I mean after all is said and done, you can't trust a country that won't allow obscenities to be spray painted unless it is done in two languages. Animals I tell you, animals.

This is the uncivil war of which I worry the most.

(Thu Nov 27 1997 11:57 - ID#372285)
You're making me very jealous! BBL.

Gusto Oro
(Thu Nov 27 1997 12:00 - ID#377235)
Snow Thankiving trading here.
Asianmgt: I reside where the 90th meridian of longitude bisects the 45th parallel of latitude--halfway between the equator and the North Pole. At least silver is hanging in there.

Mike Sheller
(Thu Nov 27 1997 12:03 - ID#347447)
No Time like the Present
AYSHA: Start buying Canadian Maple Leafs now. Buy them a little at a time. Some every week, or month, as your budget allows. If you are starting now, you will do well if you are patient and have a time horizon of a few years ( 2 or 3 will do fine for starters ) . The point is not to look for the very bottom in gold prices, but to accumulate a little at a time while prices are under pressure and the gold market is groaning in travail. The baby that will be born from this will grow up to be a bull of a child. Average out your purchases - so even if gold goes lower, you will be buying in the bargain basement. Buy some shares too. You must do your own research, but you will be buying them while even many veteran goldbugs are hurting and worried. It is the best time! Things are so depressed, you HAVE to jump for joy if you're NEW to this scene. Nibble now! Happy Thanksgiving.

(Thu Nov 27 1997 12:11 - ID#30116)
London Closing fix..
London Gold Closing - Nov 27

295.75/296.25 dlrs

What happens when gold goes to ~$42/oz. ? Does the Treasury ( U.S. ) step in to support the price? :- ) )

Patience. Currencies will tumble one by one. The stock market players will taken by 'surprise' as they were about a year and half ago. They dodged the bullet that time. This time they may not be so lucky. As Clint Eastwood would say, "So, do you feel lucky? Punk."

There will be no instant gratification in gold, yet. It will probably head lower until some major currency snaps. At that point, there will be no exiting the markets. The doors will be locked and someone will be yelling, "Fire!"

To reiterate, the U.S. public doesn't care about gold. They are preoccupied with stock market profits and greed. When fear takes hold, it will know no price. The Euro will be looked upon as a way of avoiding the currency risk considerations when investing in Europe. Will it work?

Probably not, but who knows for sure?

As to the IMF, what are they going to do? Bailout the whole world? :- ) ) The era of competing currency devaluations are here. Watch for the 'Big Three Auto Makers' to be heading to Washington to complain about 'unfair' advantages ( read currency exchange rates... ) . Tick-tock, tick-tock, tick-tock.......

Anyone notice how Clinton doesn't look so good these days??

Happy Thanksgiving to everyone in the U.S. Off to eat the bird!!!! ( Sorry Ted, I have to enjoy the fruits of my 'crime' :- ) )

(Thu Nov 27 1997 12:21 - ID#390214)
Japan dumping Australian bonds(next?????)
The Australian dollar has plunged to a four-year
low as Japanese investors dump assets in
response to the crisis hitting Asia.
Traders now fear that Japanese investors will intensify the
selling of their international holdings to help prop up their
ailing banking system, further undermining the $A.

Signs that Japanese investors were selling offshore assets,
including US Treasury bonds and Australian bonds, first
appeared this week after the collapse of broking giant
Yamaichi Securities. The currency's fall yesterday was
also driven by further weakness in the gold price, a grim
commodities outlook and the ongoing turmoil gripping
Asian markets.

(Thu Nov 27 1997 12:22 - ID#288157)
A.Goose, PLEASE take a look at this!

Copy it to your hard disk, print it out, paste it over your
desk, think about it, get back to me ( please )

(Thu Nov 27 1997 12:29 - ID#250165)
Mike Sheller
Your advice is GOLD Mike.
I have been a gold retailer for last two years and making profits on the sales. Never really seriously looked at it from the investment prespective. I live in Malaysia and u might have heard that we are currently going thro a currency crisis. The price of gold in local currency has been going like a Yo-Yo. Cant wait for this roller coaster ride to be over .At least then sone serious business can take place.
If u are a friend of Soros please ask him to stop.
Best wishes n thks for your comments.

(Thu Nov 27 1997 12:30 - ID#288157)
Panda, what the IMF (or some sane portion thereof)
might WANT to do, is allow the folly, frenzy, fear** to reach the
point where the bitter pill ( for the politicians and easy money
folk ) will be swallowed with enormous relief and GRATITUDE...

a global currency, with NO hegemonic overtones, backed by gold
national currencies left in place ( but readjusted to fit the REALLY
NEW paradigm

**with thanks to sharefin

(Thu Nov 27 1997 12:31 - ID#373403)
What say ye hoarders of gold
What about real estate in the coming crisis? No mortgage investment real estate with paying tenants, depreciation, real asset protection. Why not this instead or in addition to gold?

(Thu Nov 27 1997 12:34 - ID#200167)
SDRer I'm one it ...
Will get back to you later .... Have a good Thanksgiving one and all.

(Thu Nov 27 1997 12:40 - ID#31868)
Not in deflation, real estate will get hammered.

(Thu Nov 27 1997 12:41 - ID#263259)
themissinglink re real estate vs gold
I had some real estate I bought during the S&L crisis then sold for a tidy profit. It was worse than a yacht for eating up all my spare time on maintainance. IMHO though if a person has endless time and/or money real estate will be a good buy during the next cyclic low in 5 or 7 years, about the time that gold will be a good sell. Even if one has paid for property there is major downside risk now. Where will your tenents go if the house next door is converted to a porno theatre & massage parlour?

(Thu Nov 27 1997 12:42 - ID#31868)
I am all ears and a shot of Tequila. What do you think the adjusted price of the US dollar would be? I know that is a tough question, but take a shot at it if you would.

(Thu Nov 27 1997 12:43 - ID#348397)
I think one reason real estate may not be as good as gold in the coming crisis is potential real estate tax grabs. Real estate is an easy target for the tax man.

(Thu Nov 27 1997 12:51 - ID#269191)
The fallout has begun!
One of the leading chip makers ( micro not potato ) headed to malfunction
junction ( Washington D.C. ) to complain about Korean chip dumping: the
first sign that domestic producers will be severely hurt by a flood of
cheap Asian imports. Over the next 6 months watch the U.S. trade deficit, it's set to explode with the converse--a GDP implosion-- in its wake. Look for more trade friction and complaints about the overvalued
U.S. dollar with intense pressure on the Fed to cut short rates. The dollar is a time bomb waiting to go off. When it does, gold will have its day. Tick, tock indeed.

Also the Euro is likely to be a "soft currency" as the apparent intention is to back it with a reserve of dollar assets. In the coming
dollar collapse, nobody will flee to a Euro backed by the currency they're trying to flee from! Since the money can't go to Asian currencies or Latin America, gold wins by default.

Mike Sheller
(Thu Nov 27 1997 12:52 - ID#347447)
In the Business
AYSHA: Being in the business you can probably tell when gold is simply a very inviting investment as well as a buy and sell product. I remember many years ago, in 1972, I got into a conversation with an elderly European jeweler in front of a ticker tape that was running in the window of a manhattan brokerage house. Gold was illegal to own by Americans then, except for jewelers and a few other industrial types. The old man asked me what I thought was a good investment, as he was aware the stock market was high. I told him "For God's sake man, buy gold. You CAN, and if nothing else, you will have lots of inventory. But I see it rising without stop. " He asked me why. I said one word, "Inflation." "No," he shook his head, averting his eyes from the memories of Europe from whence he had fled, "It can't happen here." Eight years later, the gold he could have bought for $42 an ounce was going for $850. This is a businessperson's gold market. Not a trader's market, but a businessperson's market. Any gold strategy now to make sense must be long term. Since the downside long-term is near exhausted, I venture to say the longterm upside strategy must now be entertained. Buying bullion, claim properties, and shares, in that order, are the 3 gold priorities now. Each should do what they are more naturally suited to do. Perhaps, Aysha, for you it is bullion as a jewelry professional. For me it is all 3, within my modest means, and most important of all to me is the gold in the ground. Buying claims through a corporate structure is my most pressing involvement these days. It is like building inventory for the future, as if you had built up a supply of product at low prices, to sell when prices rose later on. Assets in the ground are dirt now, but will be carried as the GOLD they are in a few years hence. And this will be reflected in the stock price and bottom line of any corporate structure now accumulating assets of this kind. This is DIFFERENT from so called "junior mining companies" that have many cycles of stock dilution hanging over their many millions of shares. But they will do well too, when the new bull emerges. Best of luck to you.

(Thu Nov 27 1997 12:53 - ID#354221)
Gold and Real Estate
Gold and real estate both seem to be linked to location, location, location. If you happen to live in a country who's currency was just devalued by 50%, then doesn't gold now costs twice as much to you.

(Thu Nov 27 1997 12:57 - ID#269191)
Australian Central Banks so-called coup!
Dear Tim: The Australian central bank may be ahead on its trade but
its sale has helped bankrupt several mines with more to follow. The
Austrailan government is paying the price in additional welfare payments and lost tax receipts. When you factor in the lost GDP, welfare costs and lost tax receipts is Australia really ahead?

(Thu Nov 27 1997 13:03 - ID#344308)
peace and prosperity

we do indeed live in interesting times....

thanks to the giants for the bean-stalks.......

--------Happy Thanksgiving to all------------

cherokee!; ) carver-of-the-bird--------and-seller-of-golden-grain--corn--

(Thu Nov 27 1997 13:04 - ID#31868)
I should clarify. After the toll of deflation real estate will be so cheap it will make for a fabulous investment. Buy low, sell high.

(Thu Nov 27 1997 13:07 - ID#288157)
themissinglink, why not real estate...
real estate is VERY visible, hence VERY open to increases in

no one on this board is hold enough to remember, but history
tells of families that were "land poor", lots of land ( no pun
intended ) but all monies directed toward paying the taxes to
hold on to the land...

(Thu Nov 27 1997 13:08 - ID#22956)
Ted - I went to the market and bought some curd. I am shaping it into a Turkey but it's looking like a duck...and it tastes like chicken...What should I do?? :-^ ) )

Happy day DUDE!! And also to all the other non-dead-flesh-eating celebrators. h M!! the celebration and football ( for the diehards )


cheers down OZ/NZ's?? i enjoyed your banter night of last...

(Thu Nov 27 1997 13:15 - ID#288157)
Tolerant1, Happy Thanksgiving
I'm doing that very thing, walking the circle as it were...
and will get back to you ASAP
but now I must go make merry

fill your glass my friend
and do likewise

Lan Man
(Thu Nov 27 1997 13:32 - ID#31766)
From Bobs Billboard
November 26, 1997

Read your book in 1995 and acted on it. Although I missed the last dramatic up market move, I felt it was a prudent thing to protect my family from major financial risk and still feel this way today. I started my trial subscription of your newsletter in November. You are truly professional and sincere. There is something I would like to ask. News has been reporting that many central banks over the world consider selling gold for better return. I am a layman to monetary policy and finance, but that notion makes me wonder. I thought the critical functions of a nation's central bank were to regulate the monetary system and maintain economic order instead of seeking better return. Otherwise, central banks can just buy each other's bonds and earn good returns. Is this a symptom of complacency or we are now truly moving into a new era of credit based universe? Best Regards --W. Hwang

Reply from Bob Prechter "it's the former."

Tantalus Rex
(Thu Nov 27 1997 13:49 - ID#295111)
Gold Demand
If all the gold mines in the world were shut down today, it would take 17 years to deplete ALL the gold held by central bankers in the world at current demand rates such as for jewellery. I say that in this scenario, gold would then be worth 1000 times it's value in 17 years. I mean think about it, gold would be so rare after 17 years especially with the world's population increasing.

We should all encourage central banks to sell their gold!!!!!!

Let the Swiss sell their gold for example so we can gobble it up.

(Thu Nov 27 1997 13:49 - ID#373403)
World Gold Council
If you truly represent the gold producers interests then you should shift your marketing message from increasing jewelry awareness to increasing awareness for investors to protect their assets from the current market and currency volatility through gold ownership.

A message of fear would give you a major bang for the advertising buck. Something needs to counter the central bank anti-marketing of gold as a viable investment.

Investment magazine ad space costs the same as consumer magazines.

If you are a gold producer reading this then lobby the World Gold Council to make this fundamental shift. You will be pleased with the results. Maybe you can even reopen your mines.


(Thu Nov 27 1997 13:57 - ID#257148)
Croesus, I wuz evil.
A short tail out of the classics for gold-bugs. Thanksgiving, Croesus-style. Anyone got a conversion table "talents" to Troy oz?

~440 BC

After this Croesus, having resolved to propitiate the Delphic
god with a magnificent sacrifice, offered up three thousand of every
kind of sacrificial beast, and besides made a huge pile, and placed
upon it couches coated with silver and with gold, and golden
goblets, and robes and vests of purple; all which he burnt
in the hope
of thereby making himself more secure of the favour of the god.
Further he issued his orders to all the people of the land to offer
a sacrifice according to their means. When the sacrifice was ended,
the king melted down a vast quantity of gold, and ran it into
ingots, making them six palms long, three palms broad, and
one palm in thickness. The number of ingots was a hundred and seventeen, four being of refined gold, in weight two talents and a half; the
others of pale gold, and in weight two talents. He also caused a statue of a
lion to be made in refined gold, the weight of which was ten
talents. At the time when the temple of Delphi was burnt to the
ground, this lion fell from the ingots on which it was placed; it
now stands in the Corinthian treasury, and weighs only six
talents and a half, having lost three talents and a half by the fire.

Tantalus Rex
(Thu Nov 27 1997 14:02 - ID#295111)
Real Estate
tolerant1: I agree, real estate has got to be a great buy in these defaltionary times, if you buy into defaltion propaganda. US stock market is booming now only because baby boomers are pumping their money foolishly into mutal funds hoping to retire wealthy 10-15 years down the road. I mean all these "fundamentals are great" crap you hear from analysts on TV is just what it is...a lot of crap. When baby boomers start to withdraw their money from these funds to buy their retirement home for example, they'll be in for a big surprise. There will be a stock market crash like one that hasn't been seen for a long time. And then they'l be saying, I should have bought gold, I should have bought land, etc.

(Thu Nov 27 1997 14:05 - ID#26793)
Bear Market Musings

(Thu Nov 27 1997 14:12 - ID#31868)
I think that the current real estate prices are way out of line. When this thing really hits real estate holdings will be wiped out. The politician and banker are the culprits, hopefully, people will understand this and take care of these morons and put them in their place.

They are nothing unless the people allow them to be.

By the way, anybody know what was up with all the leeches wearing leather jackets in Canada at the big clown meeting recently.

(Thu Nov 27 1997 14:18 - ID#373403)
Real Estate
Some of the answers so far have assumed the deflationary scenario. If this is the case then would gold not be revalued downwards along with everything else? You have to assume deflation is also going to be accompanied by competitive currency devaluation and since cash is king in a deflation, why would anyone buy gold?

Real estate deflation would be in concert with all other downward pricing so it's effective purchasing power should remain unchanged. This is the store of value that gold offers.

The real difference besides the tax aspect that many have brought up is that real estate offers income in the periods of stability.

More comments.

(Thu Nov 27 1997 14:18 - ID#390214)
Good to hear from you, happy thanksgiving!

(Thu Nov 27 1997 14:21 - ID#31868)
Your point is well taken. However I see people around the planet running to gold at this time as currency world wide is suspect at best. Gold will retain a value but some or all of these currencies will not.

(Thu Nov 27 1997 14:42 - ID#341214)
The Coming Oil Shock
All: Here is a quote from Kenneth Coleman's "The Coming Oil Shock" ( see Leland at Nov 27 09:13 and Richard Burke at Nov 27 09:59 ) :

"Every political action being taken in this country is being done to minimize the coming effect of the Big Bang - the switch from dollars to Euros."

Gary North's Y2K Forum recently had an item stating that Bill Clinton "has been told by specialist consultants to call for postponement of the starting date ( to 2005 ) of the single currency ( the Euro ) ." Perhaps the quote from Coleman's report explains the real motive behind this move. If we agree with Coleman's conclusions and the US is successful in pressuring the EU into postponement then I guess it follows that the oil shock he describes would also be postponed unless something else drives down the vaule of the dollar. Watch for a full court press in this situation. Referring to Y2K compliance, the Fed recently threatened that they "might bar transactions between US institutions and banks outside the US if they had not overhauled their computers."

Quite frankly, from my perspective as a financial applications programmer for the last 20+ years and heavy reader of Y2K related material over the last year, I don't think the US banks are going to be in much better shape on Y2K than those in Europe. Maybe, before the US looses all credibility on where they really are in their Y2K repairs, they are going to try and use the Y2K issue as leverage in an attempt to delay the Euro. Coleman's report certainly provides a reason for doing so.

North's comments and links to the original articles can be found at and


(Thu Nov 27 1997 14:42 - ID#373403)
Theory vs. reality
Of course you are right in reality. Several things work against real estate.
First, I assumed no financing, who has that kind of cash?

Next, as far as Asian money, real estate is inflated already so not a viable option.

Finally, I assumed that the property would reain productive and able to service the tax man and maintenance.

Liquidity also makes gold a better candidate.

Still, you cannot beat making some money while waiting for hyperinflation that we will see prior to the meltdown. Many goldbugs seem pretty worn out waiting.


(Thu Nov 27 1997 14:58 - ID#364147)
I love ocean storms
Got a nor'easter blowin in with winds expected to gust to over 55 MPH and a little rain-sleet-snow.....EB: Keep molding and wipe yer damn face! Panda: Happy Thanksgiving carnivore! We are having the traditional dinner of Humus + Pita bread~~~~~~~~~~~~How many turkeys were KILLED to satisfy you all???

(Thu Nov 27 1997 15:15 - ID#237164)
Thanks for the URL vectors
Steve: I have come to look for your postings of news articles and
especially the url vectors ... It makes it very convenient to read
articles of interest to me. Thanks again. *

(Thu Nov 27 1997 15:20 - ID#31868)
Happy Thanksgiving to you all, enjoy the day. Off for a little tnt, turkey and tequila.

who cares
(Thu Nov 27 1997 15:22 - ID#244209)
Black Humor for the Day
from misc.invest.stocks:

: Japan today made an extraordinary appeal for calm among the public and
: financial markets over the country's economic crisis.

Seiichi Tanigashira, a Deputy section chief at Taiheiyo Securities Co.,
remained calm by jumping to his death from the top of a seven-story
building in Osaka.

Mike Sheller
(Thu Nov 27 1997 15:30 - ID#347447)
Happy HummusDay
TED: At least with the Hummus you wont have to unduly open that leather belt around your midsection. I'm sure your leather shoes or boots are off by now, and you're in your slippers. How many cotton plants died to make that garish plaid flannel shirt you're wearing? And how many chick peas were brought before their maker to satisfy your holiday glut this year? Don't forget the Baba Ganoush! I love to see eggplants suffer.

Love to the family! Thanksgiving Blessings. ( ;-@

(Thu Nov 27 1997 15:31 - ID#316409)
Give Thanks Kitcoites!
Happy thansgiving, and DON'T buy Gold tomorrow! ( It's headed lower ) . Mmm I smell the aromo of Turkey, Berry Pie's, & homemade bread...gotta go help the wife... just for one day, skip the Gloom and Doom and be happy with the blessings you have fellow investors.......

Dave in CO
(Thu Nov 27 1997 15:32 - ID#215211)
fundaMETAList - a lot of programmers here
Thanks for your Y2K contributions. Like you, my many years of business application programming have heightened my concerns.

This is off the subject but, quite a few of the contributors here seem to be or have been programmers ( compared to the population. ) Why do think we are drawn to PM investments?

(Thu Nov 27 1997 15:40 - ID#200173)
LARGE GOLD purchases in JAPAN
Could someone in Tokyo/Japan or area check the story Aya Takada I posted earlier. Some of the numbers for volume of gold purchases are quite high as tolerant1 pointed out. If we can validate Ays's data then I think we have a validation of ANOTHER's and BIG TRADER's views.

Date: Thu Nov 27 1997 10:46
A.Goose ( Excuse me, This is the reality ... coming soon to a country near you. ) ID#200200:
Thursday November 27, 4:21 am Eastern Time

Japan gold demand seen up despite financial woes

By Aya Takada

TOKYO, Nov 27 ( Reuters ) - Japan's latest financial crisis has sparked fears that some institutions
might be forced to sell gold, pushing prices even lower,
but analysts and traders here say the turmoil is actually boosting local demand.

(Thu Nov 27 1997 15:40 - ID#26793)
Thank You. And a belated one to you as well. Good to be back!

(Thu Nov 27 1997 15:45 - ID#26793)
Brazil orders banks to cut derivative exposure. Who will buy them?

Richard Burke
(Thu Nov 27 1997 15:51 - ID#411318)
Apex Silver
For those of you not following Apex's downgraded ( price and no. of shares ) on Monday, I checked the Apex site and the Newd releases. The Soros brothers hold 30% of the stock - effective control. Apex has been buying up silver properties all over the world.

Richard Burke
(Thu Nov 27 1997 15:52 - ID#411318)
Read "downgraded IPO" last post. Sorry

(Thu Nov 27 1997 15:55 - ID#26793)
South Korea currency degraded; all the ugly reasons why.

(Thu Nov 27 1997 16:05 - ID#333131)
Welcome back - missed you.

(Thu Nov 27 1997 16:10 - ID#26793)
Vronsky & Westerman say stocks are overvalued, and other opinions.

(Thu Nov 27 1997 16:12 - ID#26793)
I have been there lurking and coasting while you all kept me well informed. Thanks.

(Thu Nov 27 1997 16:18 - ID#402182)
Leather jackets

(Thu Nov 27 1997 16:19 - ID#237164)
Steve, you wrote:

"as some of the futures
contracts off-balance-sheet in South Korea,"

what did you mean by that? Is there a news article
that mentions this?


(Thu Nov 27 1997 16:24 - ID#310407)
@ Richard Burke , Re APEX, analyst negative comments re Gold, positive re Silver
Since you brought up APEX, News on the IPO and also PGU snippet. Interesting comments, negative to Gold shares, positive to Silver.

Wednesday November 26, 11:56 am Eastern Time

Apex Silver IPO cut by rough markets

NEW YORK, Nov 25 ( Reuters ) - Cayman Islands company Apex Silver Mines Ltd ( AMEX:SIL - news ) had to
cut the size of its initial public offering almost in half due to market conditions in Latin America and the gold and
precious metals markets.

Apex shares eked out a gain at their debut, with the stock up 1/16 at 11-1/16 in midday trading on the American
Stock Exchange. But the gain came only after shares priced at $11 each in a five-million share offering, cut back
from a plan to offer nine million shares at $13 to $15 each.

``We had to downsize the deal and we sized it appropriately to the demand,'' said Frank Maturo, managing
director, equity capital markets for Salomon Inc ( NYSE:SB - news ) .

``Salomon and the company wanted to make sure we had a strong transaction,'' he told Reuters in an interview
Tuesday. ``We sized the deal so that shareholders could have a successful offering.''

Maturo said that Apex Silver, which has 27 mines globally, and is currently developing a project in San Cristobal,
was affected by gold and precious metals prices as well as recent mining deals.

Gold stocks and prices have eroded in the past few weeks. The Philadelphia Stock Exchange's Gold and Silver
Index has slid about 30 percent since October 10. It was off 1.23 percent Tuesday, touching a new year-low of

Maturo cited Canadian mining company Metallica Resources' ( Toronto:MR.TO - news ) scrapped debt agreement
with two European invesment banks to develop mines in San Luis Potosi, Mexico due to low precious metals
prices and depressed gold stock prices.

He also mentioned Pegasus Gold's ( AMEX:PGU - news ) decision to cease operations at its Mt. Todd mine after
its third quarter losses reflected a $353.3 million write-down for the property. ``Gold has hit the skids,'' he said.
``But investors like silver. People are making the bet that long-term silver will be better than gold.''

Maturo said the drop in Latin American precious metals companies was another factor affecting the size of the
deal. ``Since the deal was filed, Latin American precious metals companies are down approximately 30 percent,''
he said. ``So to do a successful offering like that in this market place, we were especially pleased,'' he added.

(Thu Nov 27 1997 16:24 - ID#402182)

I have seen them all with leathers and denim shirts.

The word is they will drive away on Harleys when they figure out what
to do with the economic crisis. :- )

(Thu Nov 27 1997 16:28 - ID#30116)
Protein and real estate................
Ted -- What the hell else can you do with a DUMB domestic ( farm ) turkey? They're so stupid ( because we bred any intelligence out of them ) , that they can't survive unless we ( humans ) make it possible for them. :- ) )

BTW, amino acid matrix of fowl is about 50%, fish rates a 70%, egg albumin around 90% match. You need those ten essential amino acids and vitamin B12 ( cobalomine ) that does NOT occur in plants or plant proteins in any meaningful quantities. Hence, vegetarians need supplements, otherwise you will be deficient in key nutrients for your immune system... Enough of the medicine side show for now... :- )

Real estate is driven by available jobs, period! If there's no work, housing starts/sales go down the tubes. The time to own real estate is when the economy is beginning to recover from a recession, interest rates begin to fall, and jobs are being created. This currency fiasco will torpedo real estate. Interest rates will be the culprit along with job losses due to trade wars.........

(Thu Nov 27 1997 16:38 - ID#310407)
@ Aurator "Homeopathic Gold, ultimate snake oil!"
Aurator, I LOVED that 05:?? post for "Homeopathic" Gold and Silver remedies, link. Had me laughing hard this Thanksgiving day! The whole Homeopathic medicine thing is such a total laugh anyway ( medicine that ISN'T there works better than medicine that is! And how does the water "remember" the positive effects of medications without "remembering" the negative side effect anyway? Always wondered about that "Miracle" water ) .

Ahh but the makers of a new "Gold" homeopathic remedy. I LOVE it! Gold that isn't Gold. So cuhhhl. Thanks again for today's best comedic relief.

Thankful for family this day, ( and for the brains not to buy Homeopathic "Gold" ) , LGB

(Thu Nov 27 1997 16:39 - ID#30116)
Wild Turkeys!
Ted -- Now wild turkeys ( not the kind you drink :- ) ) are an intelligent bird! Tough to hunt too! They get my respect....

Oddly enough, lately I've noticed a lot of Red Tail Hawks in the area. About two years ago, I had the somewhat rare privilage of seeing one hawk attack two robins. In less than a minute, there was only one robin left flying. I assume the other one got eaten by the hawk. There was an 'explosion' of feathers in a tree that the robin had ducked in to for safety... Apparently it wasn't as safe as the robin thought. I wonder, is there a moral to this story?

Trees are green after all.... ( sort of like the dollar? ) :- ) )

(Thu Nov 27 1997 16:48 - ID#26793)
Japanese bank problem debt could exceed US$1 trillion

(Thu Nov 27 1997 16:49 - ID#333131)
Oil firms on Iraq in late trading

(Thu Nov 27 1997 16:49 - ID#390214)
Iraq Unwilling to Renew Oil-For-Food Deal(they know what the west wants)
BAGHDAD ( Reuters ) - Iraq is unwilling to renew its oil-for-food deal with the United Nations until problems with

implementation of the program are solved, a U.N. official said Thursday.

Iraq also ruled out allowing U.N. weapons inspectors into its presidential palaces to search for forbidden weapons.

"We understand that the government of Iraq is not prepared to discuss a third phase of the oil-for-food program until the issues

raised by them ... are effectively met," Eric Falt, spokesman for Iraq's U.N. relief coordinator, told Reuters.

Iraq was concerned with what it said was the slow approval of contracts under the deal and issues related to letters of credit

and delivery of humanitarian items, he said, adding: "But I would like to stress that this is not something we can discuss at our


(Thu Nov 27 1997 16:51 - ID#224149)
Ted- The big Turkey -Gold Stocks And Gold .Eating Silver fish today and Mama's cooking shorting bread Friday.God it's great to be a vegetarian .Happy Trails to all and those crazy Americans.

(Thu Nov 27 1997 16:59 - ID#333131)
IMF funding and questions of ability to handle crisis

(Thu Nov 27 1997 17:05 - ID#26793)
Russia demands debt repayment from Vietnam at old currency rates.

(Thu Nov 27 1997 17:07 - ID#263259)
Panda said
IMHO Panda, that may be when the next big buying time will come, just like when the S&L crisis toppled so many leveraged local real estate empires. But I think that will come in several years as that sort of thing takes a while, like toppling dominos. What I did back when I bought was watch the bankruptcy sales and get on autcioneer mailing lists. I still go to auctions but haven't bid on anything for over five years. But I really think that nowadays the SAME thing is happening in GOLD. You're getting the results of lots of rich speculators going bust, mines closing and rather than the beginning of a fall I see the bottom of a valley that will soon start going up. I hope that I'm right and in five years my gold shares will be enough to sell to buy a nice cattle farm and retire. Or if I'm wrong it was fun : )

(Thu Nov 27 1997 17:10 - ID#333131)
One Trillion?
Donald, Was your post correct?

(Thu Nov 27 1997 17:13 - ID#26793)

(Thu Nov 27 1997 17:17 - ID#390214)
When the world started to melt(a bit lengthy...but worth the read)
Following currency devaluations and stock-market crashes, Asia now faces its

biggest challenge: a full-blown credit crunch. No big bond issues will be done

for the rest of the year, spreads on outstanding bonds have gone haywire and

trading has ground to a halt. Local sources of credit have also dried up.

Corporate borrowers can expect little help from their bankers; devaluation has

blasted a hole in many local banks' balance sheets and they have no money to

lend even if they wanted to. Peter Lee reports on the likely shape of things to


Investment bankers are a tough breed, more used to hard negotiations and aggressive

trading than to dealing with delicate human emotions. So the Asian capital-markets

chief of a western firm pitching to the Thai ministry of finance one Thursday in early

November found it difficult to know how to handle the scene that confronted him.

"These people were panicking," he says. "I had one senior official literally in tears.

Hardly anyone is visiting them any more and they don't know what to do. They were

saying 'please help us'."

After a few gruff words of encouragement, the banker came up with one interesting

proposal: not for a new bond issue but for a more radical approach to Thailand's

financial difficulties. He suggested that the ministry invite an advisory board of

international firms - one European, one American and one Japanese - to negotiate

with the international creditors of Thai borrowers. This group might offer to take Thai

loans off the books of foreign banks at a sharp discount to par, hold them in some

kind of fund and then either sell them on to new-money buyers, such as vulture-fund

investors or more strongly capitalized foreign banks with less previous exposure in

Asia, or somehow reschedule the interest and principal payments so as to keep the

restructured loans current and the underlying borrowers solvent.

Only time will tell whether the Thais ever try to adopt this proposal. It may be too

radical for them for two reasons. First, unlike the $18 billion IMF support package, it

involves a market-led initiative. Secondly, it recognizes the true depth of the problem

confronting Asia.

Rather than merely the pricking of a speculative bubble in currency, stock and

property markets, this is truly a debt crisis in the making. It may lead to widespread

corporate and bank defaults - no-one can yet quite bring themselves to talk about

sovereign defaults - and will require something akin to a corporate bankruptcy

work-out at the sovereign and regional level.

"Imagine it as a country or a region going into Chapter 11 [bankruptcy]," says the

banker. "Countries will have to, as the IMF has suggested, close down certain entities

like some of the worst-run banks. There may be a fire-sale of some assets. But even

more importantly they must protect the core, viable companies and keep them going.

If they feel they cannot, then in the end I couldn't blame them for telling the foreigners

to get lost. They have to protect their own people now."

Keeping the viable companies afloat will be tough because in the coming weeks and

months Asia faces a massive credit crunch. The international bond and equity markets

have to all intents and purposes closed and will not reopen before the first quarter of

next year. The only possible exceptions will be for small structured deals involving

credit enhancement or securitization of hard-currency revenues.

"Prior to Hong Kong's dive, [when the Hang Seng Index fell 10.14% on October 22

it pushed out already wide credit spreads for Asian borrowers by another 100 basis

points or more] there were a lot more options for many issuers in the region which

need capital," says Paul Shang managing director at Lehman Brothers. "Following

that, the situation as regards issuers' ability to do deals is completely different. The

primary markets have been all but shut down. We are telling clients that for the rest of

this year at least it is very unlikely that they will be able to go ahead and issue debt or

equity on favourable terms." In every country there is a growing backlog of issuers

that need to raise capital, some urgently, but simply cannot.

As well as uncertainty about the depth of the crisis in Asia, a year-end effect is holding

investors back and exacerbating the problem. Portfolio managers don't want to take

any risks between now and the year-end when they will have to mark their positions

to market. Even if they think that, say, Korean bonds, with spreads of 250bp, are

worth buying on a 12-month to 18-month view, they must also recognize the risk that

- with occasionally wild intraday spread volatility of 50bp to 100bp - they may have

to account large paper losses in the next few weeks. Even if Korean spreads tighten

next year and the portfolio manager eventually locks in a profit, the damage will

already have been done. A portfolio manager making a paper loss in new Asian

positions is unlikely to receive generous treatment from either his bosses or his

investing clients. Investors are more concerned about existing positions, which for the

most part they cannot hedge or exit, than about taking new ones. And they are not

even thinking about supporting new borrowing.

Spreads in Asia, in these extreme markets, have moved out of the range of any

previously comprehensible relative-value analysis, not only against the rest of the

world but also against each other. In early November, following the announcement of

an IMF bail-out package for Indonesia, its debt traded 130bp tighter than Thailand's,

even though Indonesia at BBB minus is rated a notch lower than Thailand at BBB.

Spreads on Thai bonds, which had been widening all year from lows of 100bp at the

end of 1996 to around 200bp following devaluation of the baht, hit more than 500bp

over treasuries during October. That's a spread more in line with a single B rated

corporate junk-bond issuer than an investment-grade sovereign borrower like


Bankers may argue that with yields on long-dated US bonds at a historical low of

around 6.2%, new deals could still be launched at attractive absolute borrowing

levels, if only issuers would be realistic on spreads. The real problem, they say, is that

borrowers are still hankering for the spreads they enjoyed before the crisis and are

afraid of establishing new benchmarks for themselves at the new high spreads. "There

is definitely capital out there ready to go to work," says Paul Smith, head of Asian

debt capital markets for ING Baring. "But even since July, [when the Thai baht was

devalued] borrowers have been trying to price new deals by adding a little bit of

premium to the spreads at launch on their previous deals. They still haven't bitten the

bullet and realized that investors will need to at least believe in the possibility of spread

tightening on a new issue from present secondary levels."

Most of the talk about spreads is little more than sophistry. No-one really knows

where Asian spreads are at the moment. Traders produce quotes for Thailand of

500bp one day, 400bp the next, then 500bp again. But there is no significant trading

behind those figures, which may spring from a last trade of a mere $1 million-worth of


There is limited liquidity in one or two sovereign or quasi-sovereign 10-year bonds for

each country, usually the global bonds or yankees. In everything else, trading is

virtually suspended. Traders rely on guesswork when producing spreads, adding on a

risk premium above the benchmark sovereign asset for corporate bonds that may, in

reality, not see a single trade for days at a time. Bid-offer spreads are 25bp and more

for benchmark bonds that used to trade on only 3bp. Dealing amounts are tiny, some

brokers' screens have gone blank and traders seem to spend more time in the rest

rooms than they do at their desks. There is no chance of meaningful price discovery

for a new issue in such conditions.

The Philippines was the last sovereign borrower to explore the idea of a new bond

financing, in early October, and it decided not to proceed. "They just wanted to say

that they had some proposals on the table," claims one investment banker. "It was

important for them to say that to appease a domestic audience. There was no real

prospect for actually doing anything."

In early November, the last large corporate bond deal being marketed from the

region, the 10-year $150 million 144A deal for Thai pulp and paper company

Advance Agro, was completed at a huge spread of 911bp over treasuries. The

company pays 75% of its costs in baht and receives 65% of its revenues in dollars. It

is therefore the sort of Asian issuer for which the markets ought to be receptive. Its

third-quarter earnings will show its margins improving as a result of currency


The deal's low CCC+ rating from Standard & Poor's reflects concerns about liquidity

in the Thai bank market and about the structural subordination of the unsecured bonds

to the company's substantial secured bank debt ( the company's implied senior-debt

rating is single B ) . Advance Agro has paid a huge spread for an issue which, at

$111.35 million, is smaller than intended. By issuing bonds with a 13% coupon at

89.8% of par, the issuer raised proceeds of just under $100 million after paying

lead-manager Morgan Stanley Dean Witter its 4% fee. Half the proceeds will

refinance existing debt, half will fund capital expenditure on its second plant. The

company decided to forgo raising extra working capital at such high cost. Had it

completed the deal before the recent market meltdown it would have paid at least

300bp less. The leading investors in the issue were US high-yield specialists, rather

than emerging market investors. Some Asian issuers that previously relied on

low-priced syndicated loans and regarded the US high-yield debt market with

distaste, may follow Advance Agro into the junk bond market as bank funding dries


Don't give in to desperation

The danger for potential issuers is that the mere act of attempting to access such

unpromising bond markets may be interpreted as a sign of desperation. Trying to raise

long-term bond financing to appease short-term bank creditors - or to pay back a

bridge loan to an underwriter - is no great marketing pitch for a new offer. Any

corporate attempting to market a deal in the next few weeks would probably have to

spend most of its time answering investors' questions about the sovereign credit.

"What we're telling clients is: 'if you don't need to do it, don't do it,'" says Stephen

Roberts, managing director of Salomon Brothers. Ultimately it will be up to the

sovereign borrowers to reopen the markets and begin winning back new capital.

If the markets for Asian bonds are tough to read, it is tougher still to gain any true

sense of what is happening to the loan portfolios of the local and international banks.

The countries that have signed IMF packages - Thailand and Indonesia - have already

offered some hint of what is in store. In Thailand, 58 finance companies have been

suspended. Of 230 private sector banks in Indonesia, 16 have been closed.

But bank analysts in Indonesia say that for all its apparent political bravery, this is a

token effort. The problems at those banks were well known and no-one was dealing

with them much anyway. The Indonesian government might well close down at least

the same number again.

With syndicated lending accounting for roughly 60% of new fund-raising by Asian

entities, banks are at the heart of the problems in Asia. Unsustainable growth rates in

the region have sucked all banks into excessive loan growth for most of this decade.

That's particularly evident in Thailand where credit to the private sector as a

proportion of GDP rose from 88% in 1991 to 135% at the end of 1996 and in

Malaysia where it has risen from just over 100% to 158% over the same period. But

worse than the growth in domestic lending is the increase in external debt. Between

1991 and 1996, Thailand's rose from $18.4 billion to $62.2 billion and that of the

Philippines grew from $28.2 billion to $42.1 billion. Indonesia's increased from $64.1

billion to $91 billion. Worst of all has been the nature of much of this lending, which

has financed not just excessive manufacturing capacity but also property and

financial-market speculation. For these banks, currency devaluations are a potential


Asia is suffering for its massive borrowing of short-term dollars which have been

reinvested in local-currency assets of now doubtful quality. While currency pegs to the

dollar remained in place and local interest rates were kept high to combat inflation,

Asian governments underwrote and encouraged an irresponsible binge. Borrowers

had no incentive to hedge their foreign-currency liabilities. Some companies borrowed

short-term dollars and invested in local-currency instruments - not just conservative,

liquid instruments like bank deposits but also higher-yielding commercial paper issued

by other local companies. A number of companies used short-term dollar borrowing

to finance long-term capital expenditure projects, directly contrary to normal good

practice of matching maturity and currency of funding to assets and projects. The local

banks were key intermediaries in all this, raising dollar debt and on-lending to local

companies that could not raise the foreign-currency funding themselves.

The strongest go to the wall

"The irony of the situation in the Southeast Asian countries is that the companies who

are now faced with the largest problems i.e. the ones who have the biggest FX losses,

are the best credits, sine they were the ones that were able to borrow offshore,"

points out Avinder Bindra, managing director of Citicorp International. "The smaller

companies stayed home and borrowed local currencies and are now probably in

better shape." Large companies like Thailand's Siam Cement and Siam City Cement

have billions of dollars-worth of unhedged foreign-currency exposure. Bankers are

not sure how losses on these positions will be accounted for. Some countries may

allow companies to amortize their losses over a number of years, because if they

recognized all their losses up front many companies would be bankrupt. One banker

says: "In Korea, the Korean banks and the government will take much of the pain. In

Thailand, the foreign banks will share the pain. It will be every man for himself." Some

Thai owners and managers are rumoured to be looting the transferable assets of their

companies in the expectation that the banks will soon take control.

There is anecdotal evidence that some stronger international banks are seeking to

upgrade their relationships with the better Asian companies during this crisis. Some

foreign banks have benefited from a transfer of retail deposits out of local banks. As a

result, their local-currency funding costs remain competitive. Singaporean banks are

said to be making working-capital loans to stronger Indonesian companies at rates

below prevailing levels on commercial paper. Meanwhile the local banks struggle.

Some companies are trying to arrange short-term bilateral bank lines to keep

themselves alive for the next few months. But it would be a brave bank - or perhaps

one with no previous exposure to the region - that would start lending heavily now.

In Indonesia, companies were particularly fond of zaitech-type market arbitrage,

borrowing dollars at 7% and investing in rupiah instruments for the 12 percentage

point interest differential. "Some of these dollar borrowers now find that their local

currency investments are not being paid off and the cost of carrying them is

enormous," says Bindra. "However on an operating basis some of them are very good

companies. The banks are now faced with a dilemna. They cannot let them all go."

What the banks will do is the big and as yet unanswered question.

Lack of transparency, which has always been an issue for investors and lenders to the

region, is now a major concern. There are fears that the full extent of bank and

corporate unhedged foreign-currency exposure and of bad loans has yet to emerge.

Figures are being bandied about for short-term dollar debt falling due within one year

- $40 billion is often quoted for Indonesian borrowers - but their accuracy is

uncertain. The region's central banks have little idea of the level of private-sector debt,

the size of local commercial-paper markets, or of how holdings are split between local

and offshore investors.

And more time bombs may be ticking away. Local accounting practices do not

necessarily require banks or companies to revalue exposures on foreign-currency debt

falling due in three or five years. No-one can be sure how close companies and banks

are to the brink until banks refuse to roll over credit to the companies and the

companies go into default, as has recently begun happening in Korea, for example

with some of the retailers in the New Core chaebol ( commercial conglomerate ) .

Funds dry up

"The biggest problem in the region now is liquidity," says Paul Shang, managing

director at Lehman Brothers. "Under more normal circumstances, a bank would take

a good look at a fundamentally sound operating business in Indonesia or Thailand with

financial difficulties and decide to roll over its loans. But many banks don't have the

luxury of making that decision, because they don't have the money themselves. Not

only can the banks not raise tier-one and tier-two capital to pay for provisioning, in

some cases they cannot even raise short-term interbank funding." He adds: "If a bank

is looking at one company that's in trouble, it's easier to be creative in keeping it going.

When it's a macro problem, it's much harder and much more frightening to keep

putting money in."

Sources of funding are disappearing. Korean banks, which had been big buyers of

high-yielding bonds from issuers in lesser-rated Asian countries, would now face a

negative carry if they tried to buy, say, China's 10-year global bonds at credit spreads

of 150bp.

It's not just local banks that face problems. Japanese banks are the largest foreign

lenders to the region, with aggregate exposure according to the BIS of $94 billion at

the end of 1996. Of this, $37.5 billion was to Thailand and $22 billion to Indonesia.

Analysts reckon maybe half these exposures are backed by Japanese corporations

and finance their local subsidiaries and affiliates. But with the Japanese banking system

already hit by bad debts at home and its capital being eroded by falling domestic

equity prices, it remains unclear whether Japanese banks will be rolling over credit

lines to Asean borrowers or calling them in.

Asian financial markets have not yet bottomed out. Whenever markets briefly stabilize

and stocks, currencies or bonds seem to recover, more bad news comes along and

the sell-off continues. When Thai spreads widened from 90bp to 200bp in the

summer, a few investors bought on the expectation they would rally, if not all the way

back to 90bp, at least to 180bp. Instead they gapped out. Almost every investor that

has bought Asian bonds this year believing they had been oversold way beyond

fundamental value has lost money - except perhaps for the nimblest traders and hedge


By mid-November, attention was beginning to focus on Korea, the world's

eleventh-largest economy, much larger than its troubled neighbours to the south. It is

the strongest-rated country in the region at A+/A1, even after downgrades at the end

of October from AA/A1+, and is a member of the OECD to boot.

In late October, Korean state-owned borrowers outlined their hopes for

capital-market fund raising in 1998 to a select group of foreign underwriters. They

were looking for huge amounts. The Korean Development Bank ( KDB ) alone is

hoping for $8 billion, Export-Import Bank of Korea ( Kexim ) wants just a little less

and Korea Electric Power Co is seeking $2 billion. That's a total of $15-20 billion, or

more that state-owned Korean borrowers hope to raise. Whether that is possible

must remain in doubt. At the end of October, Kexim's $350 million Euro/144A deal

mandated to Salomon Brothers and SBC Warburg Dillon Read was put on hold.

"Spread on KDB 01s has jumped from the high 90s to around 320," says Chris van

Niekerk, executive director responsible for debt capital markets at SBC Warburg

Dillon Read. "That's clearly a huge spike-up. The volatility has been so great it's been

difficult for people to digest the effects. Investors are left with some substantial

mark-to-market losses and, as would be expected, many are taking a wait-and-see

attitude before considering re-engaging."

On a relative-value basis, with KDB 10-year bonds trading in recent weeks anywhere

from 200bp to 300bp over treasuries, it looks like the cheapest single A credit in the

world. But no-one is looking at Korea on a relative-value basis any longer. To buy

Korean debt, an investor must take a view on where Korea will be rated in six

months' time - by then, its credit ratings may well have fallen further.

IMF to the rescue

At the end of October, just when the big Korean borrowers were discussing their

funding plans with major investment banks, one or two voices were heard suggesting

that the IMF would have to provide financial support for Korea before the year-end -

a view many dismissed as alarmist. But by early November, previously scornful

bankers were accepting the notion and busily calculating just how much might be

needed. Most agreed a rescue package would have to be at least $70 billion,

dwarfing those for Thailand, Indonesia and Mexico in 1995. The Korean government

attacked some newspapers and analysts for speculating about an IMF bail-out. But

rumours persist that there were informal talks between the IMF and the Korean

government at the end of the first week in November.

Korea has suffered from a growing current-account deficit financed through external

borrowing. Foreign-currency reserves have been depleted by an unspecified amount

in a forlorn attempt to support the won. From September to mid-November the won

fell from W890 to the dollar to W999, despite government intervention. Meanwhile

evidence is emerging of financial mismanagement at banks and corporations, which

may add to the burden on the public sector. In October the KDB estimated that

non-performing loans at the eight large commercial banks were 14.7% of total loans.

But it's a sure bet that, like almost every official estimate of the scale of bad debt in

Asia, this will eventually prove to have been an understatement.

KDB itself has become a tool for bailing out the country's failing companies. The bank

took a large equity stake in collapsing car maker Kia as part of a political effort to

prevent Korean borrowers defaulting on loans to foreign banks. As a result, spreads

on KDB bonds have risen as high as 300bp, up from 70bp earlier this year. That

300bp may look like a wide spread for a single A credit, but if KDB continues to act

as a bail-out fund for junk Korean companies its bonds may end up yielding even

higher spreads.

Some bankers are privately warning that Korea will be rated only just above

investment grade before too long and that Thailand and Indonesia may be rated below

investment grade before the crisis is over. Countries may yet resort to extreme

measures. Because domestic borrowers are still threatened by currency exposure on

their foreign debt, they may use up what liquidity remains in the financial system to buy

dollars and sell local currency, thus exacerbating the problem. One foreign banker

claims: "In Indonesia, for certain it was the local corporates suddenly selling rupiah to

hedge their dollar borrowings that were behind most of the forex movements. They

were far more of a factor than George Soros." He adds: "Some have now hedged but

many haven't done anything yet." Capital controls may yet be imposed.

Trading mutual panic

Among the international commercial and investment banks in the region, the sense of

panic is barely controlled. Most are trying desperately to unwind their own exposures.

A system of crude financial barter has sprung up with the local banks. According to

one foreign banker: "We might go to an Indonesian bank a

(Thu Nov 27 1997 17:17 - ID#261267)
any day!

Gold actually is VERY valuable! You can bake it, fry it, sautee it and it goes well with both white and red wine. I truly beleive the world is getting ready to rush out and buy all they can! In fact, this board has been so accurate in it's "it's starting right now!" posts for the last 2 years, that I'm just sure... any day now. In the mean time keep up the good work and maybe if you all just post a few more recipes...

(Thu Nov 27 1997 17:21 - ID#333131)
I should have ask: is the URL on your 16:48 correct? I can't find any reference in it to the Japanese bad debt.

(Thu Nov 27 1997 17:23 - ID#26793)
BOJ asks FRB of New York for help in raising US dollars.

(Thu Nov 27 1997 17:27 - ID#26793)
Carl: Here is the whole story.
MARKET UPDATE ( 11/26/97 ) PM-----Metals sold off again today in New York on the heels of
sluggish trading in overseas markets. Although the Japanese government has declared
that it would not allow the collapse of Yamaichi Securities to spread, there was a report
on CNBC today that total debt in the Japanese banks could exceed $1 trillion. We have
been quoting this figure for months now in our market update. Also there are rumors
that the Japanese banking crisis will claim either Fuji Bank or Daiwa Bank as its next
victim. These are big banks, and any failure will be seen as the beginning of the domino
effect. The question remains: How long can the U.S. and IMF bail out one country or
bank after the other without serious inflationary consequences? We believe that the
laws of economics have not been repealed, and that the precious metals will play
catch-up very quickly. As confidence in the financial system erodes, people always
flee to the one store of value that has been around for 5000 years. That store of value is

Yesterday, we talked about what was behind the drop in gold prices. Reuters attributed
the drop to "loan mobilization" at the European central banks, but we are not buying it.
The question is "What mining company would lock in a gold selling price at a loss?"
Further, what central bank would lend gold at these outrageously low prices? No,
there's something else going on here. I don't think it's a co-incidence that gold drops
every time a crisis occurs in the international monetary system. More and more, it is
beginning to look like blatant manipulation of the gold price to discourage investors
world-wide from accumulating -- very much like the overt IMF-US manipulation of gold
that occurred prior to the big run-up in the 1970s. Short selling by the gold bears in
New York and London is in full force. And it takes more and more shorting to keep the
price going down because the low price is stimulating physical demand like we have
never seen before.

On top of everything else, we are now witnessing the collapse of the financial house of
cards worldwide. Asia just happened to have the highest growth/indebtedness rates,
and when it slowed down then the show was over. What has happened to Asian
markets is coming to North American and European markets--most likely in the next 6 to
12 months. We could get some bad news over this long Thanksgiving weekend that
will shock the markets on Monday morning. Meanwhile, the U.S. Dollar gained
strength today as scared money left Asia for the U.S. currency and the U.S. Treasury
markets. Bonds gained slightly in pre-holiday trading that was curtailed. The Dow
Jones Industrial Average sold off 14 points in light trading. Have a Happy
Thanksgiving Day.

Comment ( 1 ) Recently Richard Pomboy delivered a speech on gold at the Grant
Investment conference that begins to shed light on what the gold bears are up to.
"There is increasing evidence," he said, "that the amount of gold on loan is much
greater than generally 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 fulfill the old axiom which says 'client's money
and broker's experience soon becomes broker's money and client's experience." There it
is: This has more to do with the bullion banks attempting to maintain a very lucrative
gold lending business than it does supply/demand fundamentals. In other words they
have a financial interest in keeping gold down. You might conclude from that in some
instances they may also be protecting already established positions by getting in
deeper. The "ignored facts" have to do with gold demand reaching record levels
worldwide and that the price downtrend is being instigated by gold bears trying to
drive the price ever lower. Common sense dictates that they have come very close to
exhausting the downside as Pomboy asserts throughout his speech. On November
24th, the bears put teeth in their bite by putting 78,000 ounces of gold in the COMEX
warehouse the very place where their weaknesses have previously been exposed. We
shall see if that metal leaves for Japan and other parts East in the wake of the disaster
unfolding over there. The gold bears ( short sellers ) continue to mask the gold shortage
as gold surplus. They continue to throw their resources at damage control. We watch
all of this with a great deal of interest and continue to stand firm that for the asset
preservation gold accumulator, this is the best opportunity since gold resided at $35
level. We have heard many times in the mainstream press that you shouldn't own gold
because it doesn't pay interest. Tell the victims of Thailand, Malaysia, Indonesia,
Korea, Brazil and now Japan, that they shouldn't own gold because it doesn't pay
interest. They would laugh at you. This morning thousands of Japanese investors
lined up at the door of Yamaichi -- some hysterical -- demanding their money. Money
they may or may not ever see again. Tell them that gold is a barbarous relic that doesn't
make sense in the modern era. Meanwhile, gold goes down $2.00. It simply does not
make sense.

(Thu Nov 27 1997 17:28 - ID#390214)
When the world started to melt (Part 2)
Trading mutual panic

Among the international commercial and investment banks in the region, the sense of

panic is barely controlled. Most are trying desperately to unwind their own exposures.

A system of crude financial barter has sprung up with the local banks. According to

one foreign banker: "We might go to an Indonesian bank and say: 'We can raise $50

million of financing for you on a club-loan basis, but in return, you must spend $20

million of that buying some specific assets from us.'" It is a safe bet that these would

not be top-notch assets, which raises questions over the quality of the loan to the

Indonesian bank.

Many firms know they cannot reduce their bond inventory and much gossip focuses

on the size of the paper losses at those firms still running large balance sheets.

Peregrine, the largest player in local-currency debt markets, took out full-page adverts

to deny rumours it was suffering financial difficulties. Bank lenders to the firm are, in

the words of one, "monitoring exposure very carefully". Some firms may yet suffer for

having sold protection in the credit-derivatives markets at spreads 200bp narrower

than those now prevailing for Asian names. Other banks may pay for extending bridge

loans to borrowers, a tactic some commercial and investment banks began using

earlier this year as competition for capital-markets mandates intensified.

Jobs are certain to be cut. On November 4, NatWest Markets announced the closure

of its Asian bond division and the loss of 55 jobs. At other firms job losses are

already happening. In the Central district hotel bars and in Lang Kwai Fong, Hong

Kong's bankers talk of little else. A saleswoman from a big American investment bank

mentions that an analyst and two secretaries were let go last week; a broker from a

British firm mentions sales heads being pulled back from an Asian country and asked

to cover two countries from Hong Kong while other people are made redundant.

Even now, there is still some hope that conditions will improve next year. But this will

require brave political leadership in Asian countries. Governments must confront

problems, especially at financial institutions, and take credible measures to stamp out

corruption and nepotism, and to restore confidence. If all these things happen, money

will flow back into Asia.

Meanwhile a few borrowers may get deals away if they include credit clauses allowing

for price step-ups in the event of rating downgrades or covenant breaches. Borrowers

will give up flexibility to make financing acceptable. But even such credit structures

must be used carefully. Put options may attract investors, but they can be a disaster

for borrowers who find themselves having to repay deals just when their cashflow is

weakest. Several Thai property companies, such as Bangkok Land, Hemaraj Land

and Tanayong, have Euro-convertible bonds outstanding with put options exercisable

in 1998 and 1999. Certain Thai property companies are already struggling to meet

interest payments and those with puttable deals must now strive to restructure

long-term debt to meet likely redemptions.

Flickerings in the gloom

There are some small bright spots in the gloom and signs that the capital markets might

not close completely. On October 9, UBS priced a five-year $200 million

zero-coupon credit-enhanced convertible bond for Taiwanese personal computer

component maker First International Computer. The deal, following four similarly

structured deals led by Goldman Sachs earlier in the year, enjoyed the rock-solid

guarantee of a UBS letter of credit on the bond component. It was launched on a

Monday, two weeks before the great Hang Seng meltdown but with north Asian

currencies and markets just beginning to feel some pressure. It closed two days later.

With no pre-marketing the deal was nine times oversubscribed, showing the strength

of demand for the up-side in Asian equities where the credit-risk component is

eliminated. Other issuers have benefited from the same structure. United Micro

Electronics sold a letter of credit-backed convertible earlier in the year on a 20%

premium at a time when rivals were issuing straight convertibles on 5% premiums.

At the height of Asian market volatility, Salomon Brothers completed a $178 million

financing for Indonesian motorcycle-loan financer Putra Surya Multidana at 17bp over

Libor. Investors took confidence from securitization of bike loans and a credit wrap

from insurer FSA. That deal took months to prepare as the documentation had to be

worked up from scratch. It shows the potential for securitization. The technique might

be extended, most obviously to bank portfolios. Mandates are up for grabs from the

Korean merchant banks for securitizations of lease contracts on capital equipment.

Next year banks will try to sell collateralized loan obligations. "What borrowers have

been tinkering with this year, they will now have to do out of absolute necessity," says

Paul Smith, head of debt capital markets, Asia Pacific, at ING Barings.

Corporate borrowers will go down the same route. "In the past corporates were

happy to keep expanding their balance sheets as they could borrow cheaply," says

Citicorp's Bindra. "They must now realize they cannot continue doing that.

Original-equipment-manufacturers in Taiwan, Korea, Malaysia etc. selling to

multinationals on 90-day or 120-day credit should look at securitizing those


Commodity companies producing dollar earnings - from palm oil, nickel and oil for

example - should also benefit. The largest equity deal from the Asean countries last

year was the $471 million deal for oil company Gulf Indonesia which was listed in

New York. "The equity capital markets may not be entirely shut, but rather be in a

phase of extreme selectivity, open only to the right company at the right time and the

right price," says Steven Wisch, managing director at Goldman Sachs. "For a

company like Gulf Indonesia, which has dollar-denominated revenues, strong

management, growth potential and is one of two pure oil and gas companies in Asia,

American and Asian buyers stepped forward."

Despite declining confidence in much of south-east Asia all this year, both in

secondary and primary markets, a record amount of equity was sold by Asian issuers

in 1997. In the year to October, $25 billion was issued compared with $23.5 billion in

the whole of 1996 and $11.3 billion in 1995. Fully 75% of the total for 1997 was

from issuers in greater China - the People's Republic of China, Hong Kong and


That may presage a broader reordering of countries in the region as investors reassess

growth rates, asset values and, above all, credit risks. When credit spreads have

narrowed in the region during occasional rallies, beneficiaries have been China and

Hong Kong first, followed by Malaysia, Indonesia, the Philippines, Korea and

Thailand in that order. That's very different from their ranking by credit rating at the


Six months ago, Korea was by far the top credit and China was the cause of most

concern in the run-up to its takeover of Hong Kong. Now China, which went through

currency devaluation in 1994, looks a more attractive story. The spread on China's

five year global deal launched on October 22, just as the Hong Kong stock market

crashed, widened from 68bp at launch to 85bp, event ally reaching 180bp before

fluctuating back to between 100bp and 120bp. The China benc mark due in 2006

traded from 95bp to 250bp and back to around 150bp over the same period, a

comparatively good performance for an Asian credit. China is one of the few Asian

borrowers which, according to market rumour, had the market savvy and the

resources to buy back its own debt as spreads widened.

New year, new structures

At the country and company level, 1998 will be a story of wholesale restructuring.

"Companies will be forced into strategic re-evaluations of their businesses, their

balance-sheet size and their structure, as it becomes clear that fundamental growth

rates are unsustainable," says Roberts at Salomon. One obvious result will be more

M&A activity as companies shed assets partly to raise capital, partly to adapt

themselves to tougher operating and financing markets. Already foreign companies

like Coca-Cola have seized the chance to buy up bottling plants in Korea.

Anyone in Asia with cash will be able to buy at bargain levels. Some investment banks

are already thinking about shifting their emphasis away from heavily staffed

capital-markets business towards principal investing operations. Others foresee the

emergence of new patriarchal company owners among those Asian billionaires still

able and willing to buy companies outright. Such private sources of capital may not

replace the public bond and equity markets for Asian issuers, but they may at least

tide some companies over.

If the better companies can survive the next few months some good may come out of

all this, as long as the crooked and incompetent are flushed out. "You can say: 'Isn't it

a pity what is happening to Asia.' But this is a classic day of reckoning," says

Lehman's Shang. "A few of these companies have been engaging as a matter of

everyday business in wrong-headed practices they should never have been allowed to

get away with."

Eventually, Asian sovereign borrowers will return to bond markets, establish new

benchmarks, lay the foundation of the country story and reopen the markets for other

issuers. When they do so, they might be mindful of another long-term lesson of this

crisis: the danger of overdependence on any one source of funding - in this case the

international capital markets. There is plenty of capital within the region but it needs to

be mobilized. Malaysian institutions tend to invest in Malaysia, Indonesian mutual

funds in Indonesia. There have been Taiwanese dollar deals for the EBRD. Maybe it

would be better for the Taiwan authorities to let other borrowers from the region sell

Taiwanese dollar paper.

In coming years, these countries should foster better local capital markets with all the

fixed-income infrastructure of liquid money markets, benchmark sovereign yield

curves, strong regulators and credible rating agencies. "There's nothing bad about

foreign portfolio investment per se, but it needs to be considered in conjunction with

access to domestic capital," says Carlos Cordeiro, managing director at Goldman

Sachs. "Indonesian companies should at least have a choice between term-rupiah

financing and dollars. The responsibility for developing well-functining domestic capital

markets is one that governments must take."

Hong Kong provides a positive example. It regularly runs a budget surplus, but began

issuing treasury bills and notes at the start of the 1990s, added liquidity-adjusted

facilities, made contributions to the provident fund compulsory and recently set up the

Hong Kong Mortgage Corp. Bindra says: "One hopes all the domestic markets can

develop on these lines, especially if central banks share the same spirit of cooperation

with which they have tried to fight speculators."

Actions, not words

But before such grandiose schemes can get under way, Asia will have more

short-term shocks to deal with. The crisis is not over and the pessimists - talking of

widespread defaults, lasting recession, political upheaval, social disorder among the

newly unemployed, possible ethnic violence against the Chinese in southern Asia -

believe it may just be beginning. No-one knows where the bottom is. They only know

that when the Hang Seng index crashed and pulled Wall Street and the rest of the

world with it, the old financial order in Asia crumbled and its certainties were swept

away. The new order is yet to be built. In such times it's perhaps wiser to watch what

people do than to listen to much of what they say.

For western and Asian brokers, traders and analysts joining lunchtime queues at the

larger bank branches around Central on October 23 and 24, it was a strange

atmosphere. Some exchanged friendly greetings with old colleagues they had worked

with in previous jobs but not seen for months, as if this were a big reunion party for

the Hong Kong financial community. The air of unreality was understandable. Many

would soon be returning to their Citibank Tower and Exchange Square offices to

parrot to clients the official line that the Hong Kong dollar peg - Asia's last fixed

exchange rate - would definitely hold and that the currency would never be allowed to

devalue, no matter what devastation took place elsewhere in Asia. Many, perhaps

more sheepish, remained grimly intent on the task they had all come to perform but

few openly talked about: emptying Hong Kong dollar bank accounts and converting

their cash assets into US dollars or European currencies.

(Thu Nov 27 1997 17:32 - ID#348397)
Basics Question
How many ounces of gold in a ton? Is it 12 X 2000 ie 24000 ??

(Thu Nov 27 1997 17:41 - ID#364147)
@ Can't eat no more humus
Poorboys: Welcome to the club!! Panda: Are you sayin I'm deficient ( grin thing ) ....

(Thu Nov 27 1997 17:44 - ID#333131)
one Trillion $US ??????!!!!!!
If the Japanese problem is really of this magnitude and is now known, this crisis is going to move a lot faster than I had any idea it would. How are the banks there going to be able to borrow, even over night, without big premiums. I don't see how they can continue to do business.

(Thu Nov 27 1997 17:46 - ID#31868)
Euro currency plan unloved but unstoppable, poll says

Copyright  1997
Copyright  1997 Agence France-Presse

BRUSSELS ( November 27, 1997 2:41 p.m. EST ) - Support for a single currency among European Union citizens has dropped below 50 percent for the first time since their governments committed themselves to monetary union in the Maastricht Treaty.

But support for the euro, now running at an average of 47 percent across the 15 EU states, is still stronger than the opposition, at 40 percent, according to polling conducted by the European Commission in the first half of this year.

And despite their opposition, three in four EU citizens expect monetary union to go ahead on schedule on Jan. 1, 1999, a nine percent increase on a year earlier.

Since Maastricht was ratified in 1993, backing for what will be the biggest single step towards European integration in history has varied only slightly in a 51-53 percent range.

But opposition appears to have hardened with the approach of the launch-date and increasing awareness of the changes it will bring.

Some 52 percent of those polled cited the end of their national currency among their fears and concerns.

Ironically, the only two countries which registered an increase in support for the euro over the last year were Denmark ( 32 percent for, 54 against ) and Sweden ( 33-53 ) , which have both indicated they will not join the single currency bloc in 1999.

Backers of monetary union are also in the minority in Austria, Germany, Finland and Britain.

Some 32 percent of Germans expressed support for giving up the mark while 54 percent were opposed. Only Finns ( 29 percent for, 62 against ) and Britons ( 26-61 ) were more sceptical.

Italians are the EU's most ardent euro-enthusiasts, with nearly three in four of them ( 74 percent ) hoping for the imminent demise of the lira.

Euro-supporters outnumber doubters in -- in descending order of enthusiasm -- Luxembourg, Greece, Ireland, Spain, Belgium, France, the Netherlands and Portugal.

(Thu Nov 27 1997 17:51 - ID#31868)
Traders see long haul back for gold
Copyright  1997
Copyright  1997 Reuters

LONDON ( November 27, 1997 10:29 a.m. EST ) - Dealers say they see only a slim chance of gold prices climbing away from their current 12-1/2 year lows by the end of the year.

At the official fixing on Thursday morning gold was valued at $296.15 per ounce -- the lowest fixing since early March 1985 and just under the $297.00 low it reached the previous day.

In fact the chances of a sustainable rise in prices next year were remote as well, market analysts said.

"Short term the price might find some support at $295.00 which was the low yesterday. But there is no chance of it going over $300.00," a dealer representing a major European bullion bank said.

A strong U.S. dollar making the international price of gold expensive in domestic currencies has countered the attraction of a low dollar price for the yellow metal.

The currency issue has also ensured that Australian and South African miners are still able to keep most high cost mining units open even at low dollar prices.

Even so, some high cost units have been mothballed and new projects deferred without slowing the price fall. Record demand from the jewellery trade through most of this year has failed to support the price either.

The major reason for the accelerating erosion of gold's value has been the stream of suggestions from central bank officials that they are looking to mobilise or even reduce their vast gold reserves, analysts said.

The central banks hold around 28,000 tonnes of metal, equivalent to 11 years of new mine production.

"Before the central banks decide what to do the price will probably go up. It is a market after all, but the question is how long will the rise last," said precious metal market analyst Andy Smith at Union Bank of Switzerland.

The attitude of the European national banks has been spotlighted as they jockey for position to enter the European Monetary Union due in 1999.

There is also uncertainty over how much gold the planned European Central Bank ( ECB ) due next year will hold in its reserves.

Its forerunner the European Monetary Institute holds 20 percent of the gold reserves of the European Union member countries and many market analysts assumed the ECB would hold a similar amount.

Then Bank of England governor Eddie George this week said he would be surprised if the ECB held a large amount of gold. It was at the bottom of the pile and the least liquid of assets, according to George.

That sent an already tottering gold price rolling towards it current low.

"All statements from the central banks ( on gold ) have suggested there will be dishoarding at some time," said Smith, and he added until the risk from these possible sales could be defined, there was no incentive for the investment funds to change their attitude to gold.

The threat of potentially thousands of tonnes of bullion being fork-lifted out of the central bank vaults has turned investors off gold even as a "safe haven" during recent stock market and currency crashes as far apart as Wall Street and Kuala Lumpur.

Smith compared the plight of the gold market to that of the U.S. tobacco companies which had agreed the industry would pay out $368.5 billion over 25 years and make health and marketing concessions to end a slew of law suits against them.

"The risk ( for gold ) needs ring fencing. The tobacco companies set aside their money and their share prices started to rise again," Smith said.

Smith and other gold watchers have assumed a historically low average price for gold next year.

A telephone poll of eight analysts even before the current low was reached indicated a 1998 average generally between $300.00 and $320.00 against a likely 1997 average of around $330.000.

Rhona O'Connell, metal market analyst at stockbroker T. Hoare and Co said she was spotting gold to average $325.00 on the assumption that the price would not collapse completely. But even that was a climbdown from her original $340.00.

"If the price holds into the New Year, it may have a positive psychological impact which could stimulate physical buying in China and India -- two of the biggest markets. But the market is in the hands of the professionals," she said, adding a fall to $285 would not be a surprise.

The last time gold was at these levels in 1985, the price of oil was under $10 a barrel indicating low inflation and the U.S. dollar was strong discouraging buying in non-dollar currencies.

(Thu Nov 27 1997 17:54 - ID#263259)
Mikeharry, ounces pounds and tonnes
According to the tables in Oppi Untracht's metalworking book 1 troy ounce=31.103 grams, 1Kg=32.151 Troy ounces, i Troy ounce=1.10 Avoirdupois ounce and 14.58 Troy ounces=1 Avoirdupois pound. So a short tonne would be 14.58x2000 Troy ounces and a metric tonne ( 1000Kg ) would be 32.151x1000 ounces.

(Thu Nov 27 1997 18:01 - ID#348397)
Thank you 223. Very algebraic of you.
CBs have 28000 tonnes of the stuff ?? ( metric tonnes I guess ) . Who accounts for this number? Deloitte & Touche? Is this really a valid count ?

(Thu Nov 27 1997 18:05 - ID#26793)
Indian bank begins gold deposit scheme

(Thu Nov 27 1997 18:06 - ID#31868)
Numbers are a joke on gold
Every time you read an article the numbers on the CB bank holdings change. They lend, they don't, they sell, they don't, the gold market is a free market, the gold price is set in London.

Today the only thing legitimate in the gold market is the gold.

(Thu Nov 27 1997 18:08 - ID#194311)
Phase 2...underway; looks like gold just went up in Aussie..Nick's?
Australian dollar drops to four-year low on gold fall, Asian woes
SYDNEY, Nov 27 ( AFP ) - The Australian dollar shot through the
68.00 US cent level in afternoon trade Thursday to a four-year low,
dragged lower by the plunging gold price and jitters over the
deepening Asian financial crisis.
The currency settled at 68.06 US cents at the close, almost half
a US cent lower than Wednesday's 68.55 US cents.
Heavy selling against the Japanese yen sparked the downturn,
which saw the local unit bottoming out at 67.93 US cents during the

(Thu Nov 27 1997 18:11 - ID#26793)
The Gold Derivative Revolution

(Thu Nov 27 1997 18:14 - ID#26793)
That must be the reason that the BOJ is asking for the FRB of New York to help them raise funds. The have US$300 billion in US paper and even that is not enough. I can't see any way out.

(Thu Nov 27 1997 18:20 - ID#31868)
I think anyone who has US dollars is crazy not to buy gold and silver at these prices. Anyone who thinks this whole financial mess is going to take its time to get to the US is way off base.

There are so many things going wrong all at once. I think gold and silver will take off like rockets when they launch.

For those people that say that money around the world is seeking the safety of the dollar and US assets I say think again. When this monster gets going no currency will be safe. Buy the metals while you can. There is no safe paper is this world wide rip off.

Those people that have seen their currency ruined have no trust in paper. Don't wake up and realize how they feel. Exactly how they feel.

(Thu Nov 27 1997 18:21 - ID#333131)
An old definition of bankruptcy
Bankruptcy: That's when you can't borrow enough to pay the interest on what you've already borrowed.

(Thu Nov 27 1997 18:22 - ID#393224)
gobble bobble
A very happy Thanksgiving to all of you Brobdingnagians from all of us antipodeans. Down here in the real world gold shares are slightly UP this morning-- must be something wrong with my computer. G'day all.

(Thu Nov 27 1997 18:24 - ID#26793)
Book Review "The World of Gold"

(Thu Nov 27 1997 18:26 - ID#341214)
(@ Dave in CO)
Dave in CO: My personal interest in PM's started 18 years ago when an older fellow programmer came in one day during the big 1979 runup in silver with a big handful of 90% silver coins. If I remember correctly, he told us that a coin dealer would pay him about 20 times the face value of the coins. He traded them in and went out and bought a used motorcycle. I was incredulous. In the years following that I spent time researching silver which led to researching what the heck the government was doing to our currency.

Now, I feel the fundamentals on silver are changing ( hence my handle ) and I want to catch the train as it's leaving the station.

More recently, Y2K has entered the picture. A year ago I thought Y2K would provide a few gravy years and perhaps help me get into silver in a big way at the right time. Now, after reading a lot about Y2K over the last year and personally seeing the foot dragging going on in remediation efforts, I, like you am quite concerned. Here's what I'm actively doing:

1. I've wanted to try living in Idaho for several years. I was going to wait a few more years before moving there but now I'm going early next Spring. I'm not moving there because of Y2K but I am moving there earlier than I planned because of Y2K. You have probably read Yourdon's prediction that come mid-1999 there could be a large number of programmers quitting their jobs and moving out of large population areas as they come to realize what's going to happen because the job is not going to be finished. I'm taking that seriously and moving my family early.

2. As others on this board have suggested, I'm acquiring junk silver ( 90% and 40% silver coins ) and Maple Leafs in various denominations, eh. These purchases have both investment and crisis purposes.

3. Because of the threat to the transportation system that Y2K holds I've just recently decided to start a buying program that will provide us with 3 to 6 months of essential supplies, including food, by mid 1999. Hopefully, any disruption in transportation would be short lived but it would be nice to eat until things are straightened out.

Except for moving to Idaho, which none of you would like anyway cuz it's just too cold ( hee hee, hope that keeps them away ) , I would encourage you to take the advice of others on this board and make similar arrangements. If we do manage to slide into 2000 and beyond, then great, your PM's become more investment oriented and less a crisis backup and you have some extra food and supplies on hand. We can let out a collective sigh of relief and have a good laugh. If the concern I have for what is going to happen leading up to 2000 and beyond is not misplaced then my family is in a better position than most to ride out the storm for a few months and hopefully able to help those around us. Some might call this Doom and Gloom. I call it waking up, smelling the coffee and making sure I have a 6-month supply on hand ( be prepared ) .

From someone in the trenches on a daily basis who thinks business and government is out of time to get their vaccinations against the Y2K virus, ignore Y2K at your family's peril.


(Thu Nov 27 1997 18:29 - ID#26793)
I agree. It is tough to pick an exact bottom. The spike top we had in 1980 only lasted a short while. We could have a similar spike bottom that only lasts for a day or two. It would be just dumb luck to hit something like that right on the bulls-eye ( er...bears-eye )

(Thu Nov 27 1997 18:40 - ID#426220)
The financial Domino Effect has begun!

Politicians worldwide ( the enemies of gold ) , continually carp about GOLD HAS NO VALUE! Well, lets see if there is truth in their words!

Tell the victims of Thailand, Malaysia, Indonesia, Korea, Brazil and now Japan, that they shouldn't own gold because it doesn't pay
interest. They would laugh at you. This morning thousands of Japanese investors lined up at the door of Yamaichi -- some hysterical -- demanding their money. Money they may or may not ever see again. Excepting the Yen ( although its turn will inevitably come ) , the average currency devaluation in South East Asia is about 42% in terms of the US dollar AND A LITTLE LESS IN TERMS OF GOLD! The Japanese Yen has only a short reprieve, before it TOO will be forced into involuntary devaluation...

Consider recent financial revelations in the Land of the SETTING Sun:

There are growing rumors Japanese Banks non-performing loans now top US$1 TRILLION - thats a One, followed by 12 zeros! DO WE REALLY KNOW THE SIGNIFICANCE OF WHAT A TRILLION MEANS???? Lets put the Nippon non-performing loans of US$1 Trillion into perspective or reference point we all understand.

For the sake of our example, assume the Japanese may attempt to some way recover or amortize the loss of $1 Trillion at the rate of One Dollar per minute, ALL DAY LONG. How long would it take the Nippons to pull out of the non-performing loan hole?

WOULD YOU BE SURPRISED THAT IT WOULD TAKE APPROXIMATELY 2,000,000 YEARS! So you may rest assured there is no typo here, I will spell it out: T-W-O M-I-L-L-I-O-N Y-E-A-R-S!

Is there anyone out there who naively believes that this one will be pulled out of the fire WITHOUT MASSIVE DEBT CLEANSING THROUGH DEVALUATION VERSUS GOLD????

The financial Domino Effect has begun!

(Thu Nov 27 1997 18:44 - ID#26793)
Learn about Canadian Gold Derivatives

(Thu Nov 27 1997 18:48 - ID#31868)
As always thanks for all the good reads. Hope you had a great Thanks day.

I say buy and keep buying the metals. Forget curves, graphs and everything else.

Take a look at the world and see the destruction of the financial system.

(Thu Nov 27 1997 18:59 - ID#26793)
As you read this post remember that there was only 20c between spot and futures on Wednesday close.
Gold "Derivatives" Alter the Business

The nature of the business was altered irrevocably in 1995 by "derivatives"
gold- and silver-related nancial instruments whose value is derived from
movements in the underlying precious metals' trading prices or borrowing rates.

It began with the nancial crisis in Mexico in January. Market participants
responded by establishing some very large and highly leveraged positions in
gold "options" contracts giving the holder the right ( but not the obligation ) to
buy or sell a given amount of gold at a given price on a given date in the future.

Initially, these positions appeared to be established by a number of Latin
American central banks, anxious to protect themselves from the nancial
aftershocks that resulted. However, investment-fund-related and
bullion-dealer-related option positioning quickly followed.

Earthquake in Japan

Then, suddenly, all attention turned to Japan. Traumatized by the Kobe
earthquake, the Japanese proved that when paper money, equities, bricks and
mortar fail gold comes into its own. Bullion imports into Japan soared. The
Nikkei stock market index plummeted. A now-infamous futures trader based in
Singapore got caught in this downward vortex, bringing about the demise of
Barings, one of Britain's oldest banks.

Electing to batten down the hatches, a concerned banking community began
withdrawing the gold that had been lent into the short-term leasing market. This
had the immediate impact of hiking the cost of borrowing ( or "leasing" ) gold.

Belgian Central Bank Sells Gold Reserves

Unknown to many at that time, the much-higher cost of borrowing gold was
also early evidence of a substantial central bank sale of metal 5.6 million
ounces ( 175 metric tonnes ) of Belgium's gold reserves.

In hindsight, the market took this sale kindly. This was because worldwide
demand for physical metal quite apart from Japan was providing resilient
price support at the lower end of an already-narrow trading range.

Worldwide demand for physical metal strengthened further in 1995. For the full
year, demand totaled 109 million ounces of gold ( 3,400 metric tonnes ) .

Of this, jewelry accounted for an all-time record of 90 million ounces ( 2,800
metric tonnes ) more than the total new mine supply of 74 million ounces
( 2,300 metric tonnes ) . In 1994, jewelry had accounted for 83 million ounces
( 2,575 metric tonnes ) .

Shipments to China declined a little, but imports into the Indian subcontinent
enjoyed exceptionally high levels, absorbing almost 12.8 million ounces ( 400
metric tonnes ) .

Jewelry manufacturing centers in Italy, encouraged by strong orders for
nished products from the United States, had a good year. And with Indonesia
rapidly becoming a major jewelry fabrication center, imports into Singapore
proved very healthy indeed.

Ultimately, the physical market for gold is the basis for both the "spot" price
and the "forward" price of the metal. ( The spot price is paid to take delivery of
gold today; the forward price is paid for delivery at a future date. )

Booming Demand

Thus the physical market for gold, with astonishing ease, took care of a good
deal of the total supply of gold, over and above newly mined metal. This gave
the gold price a rm support level at $380 per ounce.

It soon became apparent that this price support was also dependent on
constant "care and maintenance" hedging against the ever-present option

But hedge buying at lower price levels turned into hedge selling at the higher
levels of the trading range. Furthermore, any attempted price rally above $395
to $400 per ounce was capped by forward selling of gold by gold producers.

So gold's narrow trading range became rmly entrenched.

Then in the third quarter, one of the largest mining houses in South Africa
Gengold announced the biggest gold producer hedging program in history.

Gengold sold 2.9 million ounces of gold in 1995 ( 90 metric tonnes ) for delivery
in future years. Inevitably, the lease rate for gold was pushed even higher by
demand for gold to cover a hedging position of this magnitude.

Want Some Excitement?

Perhaps some market participants tempted fate when they complained about
the market's lack of excitement and day-to-day movement, because in
mid-November the cost of borrowing gold soared to the highest levels in

The trend gained momentum and in fact became self-fullling as the pool of
available metal swiftly dried up.

In a nearly unprecedented development, the shortage of physical gold forced
the price of the metal into "backwardation" that strange state in which the
spot price of gold is higher than the forward price.

The last time backwardation occurred was in 1976, when gold bullion was
trading at $103 an ounce.

A sense of near-panic ensued in the trading community, as dealers were
abruptly unable to borrow gold in order to cover short-term trading positions
associated with all the options and producer hedging.

There were even press reports of a possible bullion bank failure.

However, the invisible hand of market forces was already at work.

For central banks, the prospect of earning a substantially higher return for
leasing their gold into the market proved much too attractive for them to resist.

Gold flowed back into the short-term market, feeding the general pool of
liquidity. This had a calming effect on the dealing community and gold
producers alike. Gold lease rates eased, and the traditional premium in price
for gold in the future versus gold today the "contango" was soon

The Indifference of the Spot Price

Under these extraordinary and volatile market conditions, however, the spot
gold price responded with indifference.

Gold's inability to rally and stabilize over $390 an ounce disappointed the gold
bulls as much as it surprised the bears.

But buying at the lower end of the trading range continued to become selling at
the upper end. The level of hedging against option positions also took its toll.
Some producers may have bought back their hedge positions during the brief
backwardation, while others sold forward even more aggressively. Finally,
some central banks may have used the stronger market to sell some more of
their reserves.

(Thu Nov 27 1997 19:01 - ID#348129)
The Canadian Gold stock market took another hit today with some of the St Genevieve group companies filling for protection. This is a very bad sign, as these companies were high flyers, and well regarded in the industry. Also, major Gold producers are hitting new lows every day.
Again I must say that December tax loss selling this year could be extremely brutal.
Looks like many companies without cash will be going down for the count.
Sorry if im sounding bearish, but this is the way I see it as of today.
It may also bring incredible bargains in Dec, if the Gold price is allowed to stabilize in the new year.


Emerging Africa Gold ( EAG ) Inc -

$14.87m St Genevieve debt

Emerging Africa Gold
( EAG ) Inc
Shares issued
1997-11-26 close
Thursday Nov 27 1997
Mr Guy Riopel reports
In light of the filing for protection under the
Companies Creditors Arrangement Act by
various members of the St Genevieve Group of
companies earlier today, Emerging Africa
considers it material to announce that St
Genevieve is indebted towards EAG for
$14,874,000 as a result of unauthorized
borrowings. The final disposition of this claim
will be governed by the proceeds under such
act. However, EAG wishes to stress that it
nonetheless remains current in its liabilities and
has a positive cash position.
( c ) Copyright 1997 Canjex Publishing Ltd.

(Thu Nov 27 1997 19:03 - ID#348169)
Dirt Cheap
tolerant1 - We are in total agreement about the fact that:
GOLD ( and Silver ) is now - DIRT CHEAP! As stated many times here in the last few months by various participants, NOW is the time to start dollar cost averaging according to the individuals own budget. Speculate ( on margin - futures for instance ) only with money one can afford to GAMBLE with. ( What is already dirt cheap can, as we know, become even cheaper in the short run. ) INVEST your savings ( or reasonable percentage thereof ) by buying the physical ( bullion coins or bars ) . No matter if this is the absolute low or not, by dollar cost averaging from here on in the individual is going to be a BIG winner in the upcoming millenium. As Zig Zigler once said, ( paraphrasing to the best of my memory here ) , :
"Follow this advice and, I WILL - see YOU - in the Winner's Circle."

(Thu Nov 27 1997 19:05 - ID#348129)
Why the hell, are we throwing good money after bad? Let the chips fall where they be. Again it will be the poor taxpayers paying for the mistakes of the high flyers - thanks to our leaders.........

(Thu Nov 27 1997 19:05 - ID#26793)
We can talk about it over breakfast at the Roof Top Cafe late February or early March if you like.

(Thu Nov 27 1997 19:08 - ID#224149)
fundaMETAList -Batra Revisited.Looking in the garage?

(Thu Nov 27 1997 19:14 - ID#31868)
I should be fishing off the Keys by then getting a tan, sipping Tequila and enjoying life while the people slaughter the politicians and bankers..

(Thu Nov 27 1997 19:16 - ID#376309)
Re: "Date: Thu Nov 27 1997 17:32 Mikeharry ( Basics Question ) ID#348397:
How many ounces of gold in a ton?"


1 metric ton = 32,151 Troy Ounces

(Thu Nov 27 1997 19:22 - ID#341214)
The name Batra sounds familiar but your reference to it and the garage escapes me at the moment. Care to enlighten me?


(Thu Nov 27 1997 19:24 - ID#224149)
Donald A -Great 18:59 Post

(Thu Nov 27 1997 19:26 - ID#26793)
That's why I suggested the Roof Top. It's on Front St., just off Duval.

(Thu Nov 27 1997 19:27 - ID#364147)
@ Mike Sheller + Chic pea hunting
Humus can be very filling if ya eat enuf of it----belch---burp---barf...
Happy thanksgiving to you + the family!!!...

(Thu Nov 27 1997 19:30 - ID#344308)
want to know which of the pac rims players will
fall next?


22% of their loans are non-performing----200 billion loss

their recently listed companies are getting hammered---more losses

the dominos are falling as they were lined-up, methodically.

can the tide be stemmed? will the currency crisis be controlled
by printing more money?? the fed flooded the market with $$$ ( up by 40%+ )
in the years leading-up to the crash of '29.

what will they do now? print more $$$$? yes....they HAVE to.
what will this do? the world-wide currency crisis can be
traced to one source----the de-coupling of paper from GOLD---

what has this done? it has given the task-masters TOTAL CONTROL
of the de-coupled currencies; that is until their weak-nesses
were exposed and seized upon by the likes of soros.....

fiat currencies are in-heriently succeptible to mega-raiders
preying upon the fallacies of changers....very
trouble-some through-out recorded history.

the dam is leaking from hundreds of ever-widening fractures. the
fractures were caused during construction when "prudence was cast to
the wind in favor of increasing profits." sounds familiar? when
the wave from the ruptured reservoir cascades over the sleep-walkers
heads.....they will think it is raining.....until they wake-up as
the flotsam and jetsam they have always been.

cherokee!; ) -----thankful-for-all-----and-more

(Thu Nov 27 1997 19:33 - ID#31868)
Yes, but I meant ooooooooff the coast. When this garbage hits I want to be out at sea.The calm and quiet of the sea. If I could I would sign up as janitor on the space station for the next six months.

If not, and things have not deteriorated I say lunch and drinks are on me.
You got it.

(Thu Nov 27 1997 19:33 - ID#364147)
@ CherOkee
Re-16,000 feet: Don't get too high dude~~~~~~~~~

(Thu Nov 27 1997 19:48 - ID#26793)
July story on gold and oil prices, still valid information.

(Thu Nov 27 1997 19:49 - ID#222167)
Cherokee: How about Canada as the prime candidate for the next country to collapse?

(Thu Nov 27 1997 19:52 - ID#287277)
They CAN'T print more dollars (IMHO)

The SDR: Some Facts, Some Surmises, Some Surprises


IF, IN THE 60S, the dollar was under sufficient suspicion to make necessary the Roosa bonds, by what leap of faith can we believe, in the debt obscured 90s, that everyone wants the dollar? Everyone says, wont hack it. Forget what everyone says and follow the money trail:: in the eighties, Japan was the liquidity engine of the world, sopping up US paper, with which they purchased all manner of things; yet, there was general unease before every quarterly refunding, rumors circulated that they werent going to buy the 10 year, or that they werent coming at all, and then what would happen?

Well, along came the nineties, and the Japanese didnt show up as much and nothing happened. Things just buzzed along as they always had. As a matter of fact, even more governments wanted the bonds. We didnt need the Japanese. Oh really! Remember those bonds issued in Swiss Francs. It is impossible, improbable, that the anxious dollar holders of the sixties became strong believers of our national worth in the nineties.
Such an assertion flies in the face of historical reality: in Kennedys term the US was in decent shape financially, strong militarily and governed by a man who, if not loved by all, was respected; in the 1990s our financial state is impoverished, our military state suspect , and we are governed by a man whom all admit lacks character. To believe that foreign government buyers of our bonds increased purchases without some
sweetener would be to believe that every government that bought had contracted a terminal case of the Stupids. Remember the Roosas.

It is human nature to stick with what works, if it aint broke, dont fix it.. The US had swapped its way through one dollar rebellion ( when, remember, the dollar was still linked to gold--which was the core problem, all those paper dollars rushing home from Europe and draining the gold away ) Debt compounds and some of the paper issued in the seventies had very sweet yields, which made it necessary to issue even more paper.

The dollar became a rabbit currency, having no natural enemies and an owner ( s ) who kept increasing the food supply quarterly, monthly, weekly. The Rabbit Dollar population grew and grew and grew. And the more Rabbit Dollars there were, the more people wanted them. The law of supply and demand worked for everything else, but not for the Rabbit Dollars. Gee: the letter which separates Statecraft from stagecraft; and stagecraft,
we would do well to remember, is predicated upon the willing suspension of disbelief.

Where will the Rabbit Dollar come to ground?
What is the dollar against the SDR?

Well, not as good as it was,
but better than it is going to be...

In the beginning: SDR1=USD1 ( circa 1970 )
At the end of the beginning: SDR1 = USD 1.381

If the Dmark is going to be cut in half when the Euro comes to town, and the poor old Creditor Nation yen is 0.00 and only shows on the SDR exchange converter when the converter carries out to at least four places, where might the Mighty Rabbit go?

(Thu Nov 27 1997 19:59 - ID#30116)
Ted -- Never! :- )

Not a gold topic, but... Vitamin B12 is only found in meat. It is essential for the production of red blood cells. Deficiency leads to a condition known as pernicious anemia. It is fatal. The 'cure' for this disease was found during the ( U.S. ) Civil War, eating beef liver. :- (

Although today, most food is fortified with something or other. Now, if we could just get them to stop taking the nutrients out of the food, before they fortify it.... Folic acid is another example. It's very important for pregnant women to have ample amounts in their diet to prevent spina bifida in their new born. Lentils are loaded with it. So, I guess man ( and woman ) does not live by meat alone... :- ) Balance and variety is the key.............

Now, about this damn gold brick that I'm using as a door stop outside...

(Thu Nov 27 1997 20:00 - ID#26793)
Currency devaluation myth; you can't create wealth by destroying it.

(Thu Nov 27 1997 20:05 - ID#26793)
@Steve Puetz
My next candidate would be Brazil. They do an awful lot of business with Korea. Canada does a lot of business with Brazil also. Mexico, Czech, Slovakia, Russia, Greece, Ukraine, and Poland are all on my list too.

(Thu Nov 27 1997 20:18 - ID#287277)
Donald Welcome Back
You were missed!

(Thu Nov 27 1997 20:22 - ID#26793)
Thanks. I see we are cousins or something now Mr.___A

(Thu Nov 27 1997 20:28 - ID#26793)
Korea-Brazil trade at US$3 billion per year

(Thu Nov 27 1997 20:31 - ID#31868)
more worries
Thursday November 27, 7:45 pm Eastern Time

U.S., Japan to push Asia crisis meeting-Singapore

SINGAPORE, Nov 28 ( Reuters ) - The United States and Japan will lead a move to hold a finance ministers' meeting with European countries on Asia's economic crisis, Singapore Prime Minister Goh Chok Tong was quoted as saying.

The daily Straits Times newspaper on Friday quoted Goh as saying leaders of the Asia-Pacific Economic Cooperation ( APEC ) forum supported Goh's idea U.S. President Bill Clinton and Japanese Prime Minister Ryutaro Hashimoto take the lead on the issue.

The United States recognised the gravity of the Asian situation, Goh said. ``So the U.S. is taking the leading role in convening a meeting of finance ministers to study the situation.''

Goh was speaking to Singapore reporters on Wednesday in Vancouver, where he attended APEC's annual summit.

The finance ministers' meeting may take place in February next year, the Straits Times quoted a senior Singapore official as saying.

Goh said the U.S. role was very important in dealing with Mexico's currency crisis in 1994, and was also crucial in Asia's current economic crisis.

``The situation in Asia is not just regional because it would affect the world economy over time and in turn, that could also affect the growth of other countries in Europe and also America,'' the Straits Times quoted Goh as saying.

He said that together, the world's finance ministers could satisfy themselves that Asia's economies, despite falling stocks and depreciating currencies, were fundamentally sound.

That could help restore investor confidence, he said.

``That's what I'm looking for. I'm not expecting massive funds in the world because the problem must be seen in a certain context.

``It is serious but it is not terminal. That's a very important message to put across.''

(Thu Nov 27 1997 20:31 - ID#402182)

I agree with you on Canada going down. This week the bank of
Canada raised interest rates to support a weak dollar.
The problem is that it did not work. The Loonie still went down.

I expect more interest rate increases coming soon.

Golden Boy
(Thu Nov 27 1997 20:39 - ID#430233)
St.Geneive Group
MoReGoLD: Re your 19:01 comment. I noticed a news release on stockwatch that said the St.G group raised over 100 miilion in 1996...and now there're in trouble?? What happened to all that money????? No wonder juniors are in big trouble and will be IMO for years to come. The stock exchanges better clean this up.. Any comments?

(Thu Nov 27 1997 20:43 - ID#372235)
Happy Thanksgiving

Wanted to wish all in the U.S. a Happy Thanksgiving. To all those in Canada, a belatedly Happy Thanksgiving ( had yours in October, if I'm not mistaken ) .

Golden Boy
(Thu Nov 27 1997 20:50 - ID#430233)
Canada next, eh!
I think not. With almost a balanced budget Canada's in better shape than a few years ago. A low dollar isn't all that bad considering how much stuff is exported. Sure unemployment is maybe higher than some would like to see but it keeps a lid on inflation and the standard of living is still good.

(Thu Nov 27 1997 20:50 - ID#26793)
Scotiabank Canadian Economic Forecast made July, 1997 (OOPS!)

(Thu Nov 27 1997 20:51 - ID#286262)
Canadian Dollar

Hawk, how far does the "loonie" have to drop before the mint starts to melt the silver dollars with 5 dollar face value? This happened in Mexico with their old silver money.

(Thu Nov 27 1997 20:54 - ID#376309)
Gold's value
There is 32,151 oz's per ton, at $300 per oz that's $9,645,300.
About 9 1/2 billion per ton. Pocket change.
there about 120,000 tons above ground in the world at $300
that's = $1,157,436,000,000 = about $1.1 Trillion

I don't think I have all that money right now but I think I could come up with half that. If someone else has a half tillion $ and would like to buy all the gold in the entire world with me. Just e-mail me at and I'll tell you where to send the cash. I'll then go into the Gold pit the next day with a "$300 BID" "for all of it!!!".

Golden Boy
(Thu Nov 27 1997 21:03 - ID#430233)
Buying all the gold
and what would you do with it if all somebody would pay you per oz would be 280 or 275, 250,.......100

Tantalus Rex
(Thu Nov 27 1997 21:10 - ID#295111)
Buy now and average out.
The theme being re-inforced constantly in the media these days is that "there is a real threat of Central Banks selling their gold". It's like a broken record. Boy, what a threat.../

I only wish the CB's would truly sell their gold! So what's taking them so long to sell? I mean the CB's might lose out if they don't sell now when gold is still at a high price ( for the bears that is ) . Right?

Wrong. They want us to sell our gold so they can hoard it!!

Buying the metal/mines now without trying to find out where gold will bottom out must be a real smart move. It's too much of a risk not to start buying now!! Because when gold starts to take off, it'll be like a bat of of hell or it'll take off like a rocket and you'll be left in the dust.

Gold will not turn to rust and rust to dust. Period.

(Thu Nov 27 1997 21:14 - ID#31868)
St. G and related stocks
The whole situation began when Genoil reported that one of the other companies withdrew 5million from their account without permission and apparently illegally. Stated today via press release.

This caused SGV, KWG and GNOL to halt trading. GNOL said that it will be issuing another statement on Tuesday the 2nd.

(Thu Nov 27 1997 21:16 - ID#26793)
List of countries and amounts exposed to Korea problem.

(Thu Nov 27 1997 21:19 - ID#293211)
Lost Confidence in Gold by Design
When the price of gold declines while paper declines people lose confidence in its ability to protect them from
from finanical ruin, and sell their gold to control losses. This is a strategy employed by those in power who's goal is to
strip gold from the public hands... a major goal of Marxist Socialist who must eliminate the middle class.
Wise men and women will buy and buy and buy Gold and Silver whenever the opportunity of falling prices will permit.
When paper fails as all historical precedent tell us will happen, gold will rule the market and the economy.
Those who possess the metals will be the SURVIVORS and the controllers of that crisis.

(Thu Nov 27 1997 21:21 - ID#31868)
People keep throwing billions and trillions around like its nothing. The game is up.

Buy something called gold now while your funny money is still accepted.

Tantalus Rex
(Thu Nov 27 1997 21:26 - ID#295111)
European Central Bank
If the European Central Bank ( ECB ) does not back it's Eurodollar with gold, that currency will surely crumble. And so gold will be highly desired. And if the ECB does back it with gold, then gold will still be highly desired. It's a win win situation.

Gold will not turn to rust and rust to dust. Period.

Golden Boy
(Thu Nov 27 1997 21:27 - ID#430233)
St. G et al
tolerant1: I'd like you comments on the following. Way back in the spring
Bre-x happened and before that Cartaway and Timbuktu and who knows who else and this was followed by Hixon and Golden Rule. This was only the tip of the proverbial ice berg IMO. I think there are many,many companies like these that have either been a hoax or have wasted shareholder money by chasing these hoaxs. What about companies like Parametric Ventures who was on a play by Hixon's and now their going in the tank. What about comanies that carry their exploration expenses as assets and show book value that isn't there if they go to sell these assets. I think that more of these kinds of things will show up the longer PM prices are low and going lower. Investors need to be very wary about where they put their money. Many companies seem to forget that they are supposed to be increasing shareholder value and not just taking care of themselves.

(Thu Nov 27 1997 21:35 - ID#348286)
St. Gen Group
Golden Boy: The only company in this group I really followed is KWG and they were well regarded with some good plays, including diamonds.
Where the money went is a good question, but I think most of these companies were counting on selling shares for financing their ongoing exploration, which is virtually impossible now.
It looks to me that many of these companies will now lose their properties due to inability to explore. A lot of Gold that would have been found will not see the light of day form many years to come, which is a big positive for the Gold market.
I also heard that there is $5 million missing from one of the St. Gen companies, so another scandal seems to be brewing.
It will be an interesting December............

Tantalus Rex
(Thu Nov 27 1997 21:39 - ID#295111)
Golden Boy
That's the risk of holding a Gold Mining Company. You're at the mercy of the guys who run the company. At least with gold coins, you're in control. You can hold them in your hands, enjoy their feel. But the rewards are generally greater in holding the right gold mining companies although you pay for that it in risk.

(Thu Nov 27 1997 21:40 - ID#284255)
Who's stuffed now? - Happy Thanksgiving
Asian Indice Charts

Swing Charts updated

(Thu Nov 27 1997 21:41 - ID#287277)
Cousin Donald
I did wonder about that. Nonetheless,
good to have the Emperor of News back.

(Thu Nov 27 1997 21:44 - ID#31868)
I think it would be wrong to pre-judge this particular instance. Several of the companies under the umbrella of St.G are solid and in the midst of some exciting work.

Clearly these are speculative companies. Something here is odd as certain people have resigned, did they leave because they smelled a rat, were they the rats and being cleaned up. Who knows. If you would like to look further into these companies you can go to:

and from there, at the top of the page you can skip to 5 different areas of press, related companies and such.

There are stops in place and they are working on the current situation.

(Thu Nov 27 1997 21:47 - ID#222167)
Marshall: It's not so much that investors have lost confidence in gold, it's more that central banks have been adding to the annual supply through their selling and leasing operations. Individual investors have had twice as much gold offered for sale than is normally produced annually. This has allowed investors to buy the gold cheaply.

At the rate central banks are selling and leasing gold, they will conpletely run out of gold within the next ten years. Some basket-cases, such as Canada, have already run out of additional gold to sell.

Soon, these tremendous market forces will propel gold and silver sharply higher -- back to higher levels that are more appropriate considering current credit-supplies throughout the world.

(Thu Nov 27 1997 21:48 - ID#31868)
And where do they get the money?
Thursday November 27, 9:09 pm Eastern Time

Japan ready to help S.Korea if asked--BOJ governor

TOKYO, Nov 28 ( Reuters ) - Japan is ready to provide assistance to South Korea if the Seoul government asks for help in an aid package being put together for it by the International Monetary Fund, Bank of Japan Governor Yasuo Matsushita said on Friday.

Finance Minister Hiroshi Mitsuzuka echoed Matsushita's remarks when they both appeared before a parliamentary committee.

``An assistance package for South Korea is being made, led by the IMF. Should there be any consultations in the process we will respond to it,'' Matsushita said.

But so far Japan has not received any request for help in IMF packages except for Thailand and Indonesia, Matsushita said.

Separately, a ministry official said Mitsuzuka would meet South Korean Finance Minister Lim Chang-yuel at 7 p.m. ( 1000 GMT ) on Friday.

Golden Boy
(Thu Nov 27 1997 21:50 - ID#430233)
Shell game???
MoReGoLd: Tx for your response. I think it's shocking that there is not more accountability. These companies spend money like drunken sailors ( no offense intended to any Kitco sailors ) expecting to raise more money to "waste" when they issue or leak glowing results sometimes as low as 1 gm per ton expecting that the hen that lays the golden egg ( naive investors )
will just keep up being fools. I think that the whole industry is basically a house of cards. Imagine for example exploring for gold on the top of a jungle mountain in New Guinea with no infrastructure and having to go in by helicopter. Does it make good business sense to invest in something like this??? Stock brokerage firms have to be also help accountable for these "investments". I think that the more knowledgeable people become the more likely they are to use discount brokers and avoid the advise of big investment houses.

(Thu Nov 27 1997 21:55 - ID#222167)
Donald: As others have done, I welcome you back to Kitco. I agree with your list of basket-cases, ready to fail. Perhaps we should also add the United States to the list!

(Thu Nov 27 1997 21:55 - ID#31868)
while we are at it
I think we should really go after the Central Banks and politicians. These are the people at the root of the entire problem.

(Thu Nov 27 1997 21:56 - ID#30116)
What else? Gold.

(Thu Nov 27 1997 22:02 - ID#31868)
I think the problem gets down to something as simple as this. The amount of people that were alive during the depression has become smaller and smaller as the years have gone by.

A simple cycle. Plain, no major thought to it. This financial debacle has been so talked about and over thought when the simple 1+1=5,483,992 should be clear to everyone.

Everything going on has gone on before with slight changes, but at the root of it, once the politicians and bankers can play with paper they rob and rob until everything is gone, and then blame everyone else but themselves and the people are so stupid they fall for it.

People holding gold and silver will have money. People who do not, won't.

(Thu Nov 27 1997 22:03 - ID#344290)
@ Donald
Welcome back, it wasn't the same without you!

(Thu Nov 27 1997 22:03 - ID#344308)

canada could easily go under before china or mexico.
all 3 are on the brink, riding the edge of the envelope...

i suggested that canada was in worse shape than mexico
and on the brink many months ago, and was chastised.

canada probably will be the first to fail in our region
of the world, with mexico closely following.

the peso ( charts ) looks like it did before its' big collapse.

we are on the cusp of trend changes for the entire world.

chaos and flux will reign supreme. what has happened in the
last 30 years? relative peace and prosperity...

if--- "for every action, there is an equal and opposite reaction"

is valid...... and we know it is. where are we standing?

---on the veritable edge of the most dramatic reversal of
of trends since '29, WWI, and WWII. things low will be high,
things high will be low. it is the law of the land, and nature
and her cycles rule. where does this put gold?

don't mess with mother nature ( physics )

cherokee!; ) cycle-of-life

(Thu Nov 27 1997 22:05 - ID#30116)
That pathetic stuff again...
One more chart...........

(Thu Nov 27 1997 22:06 - ID#402182)
@Golden Boy
You are right about the deficit.
Canada still has a debt of near 600 billion and that's a lot of Loonies.

I had the site for the Canadian debt clock but it is no longer available.
If anyone has it, it would be appreciated.


(Thu Nov 27 1997 22:16 - ID#402182)
@Golden Boy
If only Canada had some Gold to sell in case of trouble.
Canada has no back-up.
Like having a mortgage and financed to the max.
That's ok until you lose your job or split up. Eh!!!!

(Thu Nov 27 1997 22:20 - ID#24095)
near a bottom
Belated Happy Thanksgiving to all...have a it a gut reaction

we may be nearing a bottom in gold market...Bloomberg News has spot

gold down .20. I think gold can hold its own going into weekend.

South Korean market continues to tank...down 3%. The House of Cards

is still in order...tremendous European exposure to Asian debt.

For all markets..

(Thu Nov 27 1997 22:22 - ID#348286)
@JAPAN BAILOUTS: "the BOJ had extended a total of 3.8 trillion yen in special loans"
Thursday November 27, 9:38 pm Eastern Time

BOJ says provides 55 bln yen to Tokuyo City Bank

TOKYO, Nov 28 ( Reuters ) - The Bank of Japan has provided 55 billion yen of uncollateralised special loans to Tokuyo City Bank, BOJ Governor Yasuo Matsushita said on Friday.

As of Thursday, Matsushita said, the BOJ had extended a total of 3.8 trillion yen in special loans to financial institutions including brokerage Yamiachi Securities Co Ltd, which collapsed on Monday.

The BOJ's special loans to Yamaichi would be used to protect both Japanese and foreign investors and to maintain stability in domestic and overseas markets, he said.

``The loans are especially favourable from the standpoint of preventing ill effects on Japan's economy and its financial markets,'' Matsushita said.

The BOJ believes that its special loans will be recovered once failed financial institutions are wound up, he said.

He added that the BOJ has been making utmost efforts in providing sufficient liquidity to markets and has used its usual market operations as well as extending collateralised loans to financial firms.

``We have been providing extremely ample liquidity through various measures for three days in a row,'' he said.

Matsushita also said Japan is ready to provide assistance to South Korea if the Seoul government asks for help in an aid package being put together for it by the International Monetary Fund.

Finance Minister Hiroshi Mitsuzuka echoed Matsushita's remarks when they both appeared before a parliamentary committee.

``An assistance package for South Korea is being made, led by the IMF. Should there be any consultations in the process we will respond to them,'' Matsushita said.

So far Japan has not received any requests for help with IMF packages except for those for Thailand and Indonesia, Matsushita said.

Separately, a Finance Ministry official said Mitsuzuka would meet South Korean Finance Minister Lim Chang-yuel at 7 p.m. ( 1000 GMT ) on Friday.

(Thu Nov 27 1997 22:28 - ID#348286)
@Canada's Gold
Canada has about 3 million ounces of Gold left, about 3 grams per citizen, not even enough for a ring. The US in contrast has almost 1 oz.
per citizen.

(Thu Nov 27 1997 22:33 - ID#28594)
Thu Nov 27 1997 01:01, a post by AZAU (palindrome)
To All:
READ IT. Seldom does one have the opportunity
to touch stars.
The birth of an idea is a wondrous thing.
This paper is beauty. Please take the time to read it.
It is a privilege and a pleasure.

You do ask the most Awkward Questions! Where will they get the money?
I dont think theyll invite YOU to Davos!

(Thu Nov 27 1997 22:39 - ID#31868)
You are right, that is an excellent piece. I printed it out and have read it several times.

In case you were wonderng my favorite ballet is the "Nutcracker."

(Thu Nov 27 1997 22:49 - ID#263259)
trivia night? How dense is gold?
According to Untracht's tables gold's specifig gravity varies depending upon how it is processed. Hammered cast gold weigh 1205 pounds per cubic foot. So a quick calculation reveals it to occupy 24.1992 cubic feet per short tonne or 26.6813 cubic feet per metric tonne. Just about enough to put into the trunk of a Toyota, even if you leave the spare tire in place.

(Thu Nov 27 1997 22:55 - ID#263259)
trivia night? How dense is gold? Boy that was Stupid of me!
Should have been 1.6598 cubic feet per short tonne or 1.826 cubic feet per metric tonne. That was a stupid arithmetic error. You could put 15 tonnes easily into the Toyota!

(Thu Nov 27 1997 23:04 - ID#284255)
Melbourne had the hottest day in Nov for 89 years
South Korea rescue package "could top $50bn"
The South Korean government has admitted it will need more than the $20bn bail-out package it requested from the International Monetary Fund

Opec talks depress markets
Oil ministers meeting in Indonesia are discussing raising output but traders have reacted by pushing prices lower on the world's markets.

Scorched earth in 1997
British scientists have found that temperatures around the world have been higher in 1997 than any previous year.

Hundreds of bushfires out of control in Australia
Thousands of firefighters are fighting bushfires across Australia which have been partly blamed on the effects of the El Nino weather system.

(Thu Nov 27 1997 23:04 - ID#35767)
Anyone know how the S&P and Tokio are doing tonight. Is there a URL where we can get close to market updates during the nite?

Silver is looking ok given gold. Though Silver stocks are getting killed like the golds.

The current gold market has a hopelessness to it much like bonds in 87. It took the Crash and the Fed to start that Bull. What will start a PM bull?
Peutz, George S. Cole ( where are you? ) or tolerant1 comments. I have trouble with the American people thinking a greenback is worthless. What would have to happen? Comments please.

(Thu Nov 27 1997 23:13 - ID#284255)
Globex up 280
Nasdaq up 50

Nikkei intraday chart - refesh every few hours

Nikkei 5 day chart

Nikkei day/week chart

(Thu Nov 27 1997 23:20 - ID#31868)
How bad are those fire? I saw some footage on CNN and things looked pretty bad.

Golden Boy
(Thu Nov 27 1997 23:22 - ID#430233)
Canadian debt
Hawk: Canadian debt is high. However, getting the budget under control was the first step. Now if they'll put any surplus to the debt that will be a start to paying it off. I wonder how much of the balancing of the budget had to do with low interest rates. Every 1% of interest amounts to 6 billion so if interest rates went up 5% you'd have 30 Billion more on to ad to the budget. I have to agree with you that Canada is probably not in that good a shape but at least it's better than it was a couple of years ago. Hopefully it will keep improving. We all live on hope, that's pretty evident from the posts on Kitco.

(Thu Nov 27 1997 23:32 - ID#284255)
Ozzies always like to throw a prawn on the BBQ
I only just heard about them myself.
Oz had a heat wave go though, a few days ago, that put temperatures up in the high 30's to 44degC. With the country already dry as a tinderbox, these bushfires tend to breakout very rapidly. With the temperatures already hitting highs, normally seen in Jan or Feb, I would say, that like the financial scene, we are in for a torching this summer. They might seem bad now, but by the middle of summer, the El Nino effect will be in full force and then we will realy see the fires break out bad. That is if there is anything left to burn.

(Thu Nov 27 1997 23:35 - ID#284255)
Ozzies always like to throw a prawn on the BBQ
I only just heard about them myself.
Oz had a heat wave go though, a few days ago, that put temperatures up in the high 30's to 44degC. With the country already dry as a tinderbox, these bushfires tend to breakout very rapidly. With the temperatures already hitting highs, normally seen in Jan or Feb, I would say, that like the financial scene, we are in for a torching this summer. They might seem bad now, but by the middle of summer, the El Nino effect will be in full force and then we will realy see the fires break out bad. That is if there is anything left to burn.

Japan +142 +.86%
HK -133 -1.24%
Korea -18.1 -4.18%
Thailand -5.59 -1.4%

(Thu Nov 27 1997 23:38 - ID#93114)
Korea Freefall and Crashing..

New 52 week lows and might break 400 tonight.. Who's Next?^KS11&d=t

(Thu Nov 27 1997 23:45 - ID#284255)
Eye of the eagle
If you zoom in on OZ in about 6 hours, you will be able to get a birds eye view.

(Thu Nov 27 1997 23:54 - ID#287277)
Financial Crisis
Five Hundred years of financial crisisses, and the bankers have distilled their problem down to the need to balance between too much, too soon or too little, too late I kid you not.
and the absolute certainty of the need for a the lender of last resort.


To which we may add the perfect symmetry of the Nobel Prize for Economics being award to the men who found a way to price derivatives.
Einstein was right. God does have a sense of humor.

Tolerant1@Wise: Your favorite ballet...sounds right to me...

Mo in To
(Thu Nov 27 1997 23:55 - ID#347205)
The Canuck Buck & Debt

I am new here so pardon any gaffs. [IMHO] My view of Canada's "new" currency woes are old ones, they were just disguised by Paul Martin ( the man who would be king, er Prime Minister ) . Oh yeah, the deficit is down but the only way that has happened is by keeping interest rates low. The flip side to all of this is that the 600B debt is still with us, a huge portion of which ( at least 40B ) by Japanese and foreign investors. No small wonder that our loonie is losing its luster when 1/3 of our export market is drying up ( read Asia ) . Not only are we not out of the woods, they get thicker by the day! I see some hard times ahead. No surprise that our politicos are trying to make soothing noises about the Asian flue. We need to give Asia paper in order to prop up our own, and with gold out of the way ( as a measure of the strength of the paper ) they will just keep printing the stuff. As for me, I have bought bullion and will do so again. At least it is "legal" tender.

Any comments?

Mo in To