Gold Discussion for Investors and Market Analysts

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(Fri Dec 26 1997 00:05 - ID#393224)
Desert Rat
G'day D.R. As a teenager I lived in both Thailand and Laos, as my father was a soldier-of-fortune ( pilot ) who flew for the highest bidder--which in this case was the CIA--er excuse me--Air America. All of the pilots wore heavy bracelets with very thick links of at least 22c gold. When I asked why, my father replied "insurance". "If I get shot down I want to have a pistol and some gold". Meo tribesmen in the hills of Laos knew what REAL money was, as do all Asians.

(Fri Dec 26 1997 00:05 - ID#254201)
Pakeha posting
Aurator-I hope you had a Merry Christmas!!Again could you suggest a particular writing of Charles Fort? Something with small words a digger can understand.

(Fri Dec 26 1997 00:07 - ID#227238)
T1: " ......... and they opened their eyes and saw that it was good." A wonderful instruction in the limits of abstraction. ..... Ah, I'm not sure it is fully fixed in my mind. Could you give me a call when you plan the next, similar event? ( grin thing )

(Fri Dec 26 1997 00:09 - ID#285309)
All- does anyone know US markets trading hours for Fri ??????

John Disney - please me too
John, I would also like to receive your valuation model. Please, add me to you e-mail list

thanx - Miro

Friday trading hours
Not sure about PM's but the stock market is open for the short session. I believe it closes at 1PM.

Haggis re vanadium:
Thanks for the tip. I'll look it up. How much is cost of vanadium? The only 3 things I recall about it is that it is found as a trace impurity in cast iron, a trace alloy in some types of stainless steel, and that its nearly impossible for a person to have a vanadium free diet. FWIW

@ ali
ali, we may be seeing silver as the poor's man gold for investment purposes, or a corner by some big boys. One must not forget that the citizens of countries with chronic inflation ( India included ) , will always consider silver as a government non-controllable asset, without the taxes and restrictions that gold has.

Anytime that a commodity surges, it brings in sellers to the market. If silver was going up in a smooth way, I would have ventured to say that fundamentals cause the rise. Industry didn't suddenly start using 200 mil. ozs more. Its rise is suspect and indicates some cornering. After all, some people having bought contracts and asking delivery ( as in the good old days ) could have triggered the upswing.

The question is how big is the corner and how long it will last. I would say that there is a lot of gold still in India and other countries, which will hit the market when it reaches a 30:1 ratio with gold. That can happen around $10 oz. if gold stays around $300. I will continue to debate the industrial usage of silver.

Furthermore, if there is a world recession / depression, it will crash to about 100:1 to gold. Most of the gold bugs are thinking in terms of depressions, meltdowns, tanking etc. ( me included ) . Well, how can one be boolish anticipating an increase in industrial consumption of silver with this kind of scenario?

I know that James Dines, Harry Brown, Mayers, Schultz, Zweig, et al have been boolish on PMs for the last 25 yrs. I am too. But I just realized that their opinions, although worshiped by many, to me they mean very little and I will continue to stick to my own analysis.

Being out of sync for 20+ years with the markets doesn't prove a very good record. Although I respect them as individuals, I will continue to rely on my own judgement, and some of the analysis of the Kitco board members, which are more flexible and open to suggestions.

I hope that those who have invested in silver do well, so that I can learn something. But I do not see its industrial usage yet. On the contrary, I see investment usage, or cornering, hence the rise.

Gold and Children
Tolerant1- Did you notice that children recognize gold as money in an instant. I have given a gold to many children over the years and after that first question "is that real?" they light up. On Chrismas eve I was approached by a beautiful young woman with a wonderful British accent. It turns out that she had visited my mine 10 years ago as a small child and still had the gold I had given her and had vivid memories of her visit. Gold in the hands of children truly makes a lasting impression as did the young lady. My wife had to jerk on my leash twice to bring back on heel. Love those accents......

Disney - Prime Resources
Web page gives proven and probable silver oz. as 111 million.

If I am able you are more than welcome to the next feast of humility and truth. Wear steel toed boots, the five year olds are vicious without meaning to be so.

Myrmidon and 223..............

G'day from Kalgoorlie,

You may find it useful to check up on the VANADIUM BATTERY developed by the University of New South Wales. Source "Vanadium Battery' via Altavista.

A Scotsman living in South Australia has developed an electric car capable of 120Km per hour, travelling Sydney-Melbourne return, on a single charge. He has received death threats, persumably from third parties acting on behalf of major automoto interests. A man ahead of his day.

Aye, Haggis

Fort- The Book of the Damned
AuProducer, G'day, You had gone when I finally read your request the other day. His books are
The Book of the Damned, Strange Lands, Lo
Here is a good start to Fort On line, but be warned, much of what passes for Forteana on-line would be mocked by this famous iconoclast.


"A seeker of Truth. He will never find it. But the dimmest of possibilities--he may himself become Truth.
Or that science is more than an inquiry:
That it is a pseudo-construction, or a quasi-organization: that it is an attempt to break away and locally establish harmony, stability, equilibrium, consistency, entity-- Dimmest of all possibilities--that it may succeed. "
( Damned, p. 14 )

It is not too late to turn back! ;- ) )

Me mum is British. I witnessed the effect on my father. It appeared to be rather durable over time. A healthy leash in the right hands is good for the soul. Hope you and your's had a lovely day of it.

@ Haggis
How heavy is the car? With air conditioning and lights on? Are the batteries using silver? Is the road from Sydney to Melbourne flat?

I read in one article the following:
These batteries have to be charged. The power stations still have to burn oil to generate electricity. Although car pollution will go down with electric cars, the pollution induced by the power stations for supplying the extra power will be more than the pollution benefit of the cars. The reason is that cars have much stricter environmental pollution standards. Are we getting into another Pandora's box?

The death threats are not so significant if he believes in his cause.

Book of the month club
Aurator- thanks for the reference and the warning. I can always go back to dragging my knuckles,spitting through my teeth, and grunting.


Hunter and Amory Lovins
When their work is accepted the energy world will be rocked. It is all greed and lust for more money than any could spend or understand in one lifetime which disallows their brilliance to truly shine.

A useful publication concering deviatives and gold is " The Derivatives Revolution" by Jessica Cross, Rosendale Press, ISBN 1 872803 18 0. She defines a derivative as "...a bi-lateral contract ...whose value derives...from the value of an underlying asset OR underlying reference rate or index". The major concern of derivatives lies in the fact that the market was/is concentrated among a few large institutions and that these bodies could via their derivative activities undermine the stability of the underlying markets causing a chain reaction of commodity price and associated company failures ( and banks? ) , and ultimately a systems shock or even meltdown. The other concern is that the derivatives market is not subject to any form of regulation and tends not to fall under jurisdiction of any financial authority. So, "when the bush fire rages", the derivatives market will come to you and say " I say old chap, we can always do a deal on the water supply!".
I suppose that we should always remember that this is the nineties: you should have two mobile phones, a home phone and fax, an office phone and fax, at keast one pager, and a communications satellite, an Internet link, and two cans joined by a piece of string. Make sure everybody has ALL of your numbers. It is a horrible thought, but all the "New Yuppies" were in their teens during the eighties. Hopefully, by the year 2001 most of they will be doing time inside!!
Derivatives are fundamentally opposed to a GOLD STANDARD, therefore a melt down may be required before it is implements - if it ever is.
Aye Haggis.

On the electric car...
Furthermore, and this is ironical, the electric car will be equipped with a small gasoline engine to recharge batteries in case of emergency. In other words, you run out of charge? Stop and start your auxiliary gasoline engine, wait for 2 hrs., pollute for 2 hrs., and then continue!

In face of all this, electric vehicles will be good for golf courses, hotel resorts, and similar applications. I think for this kind of applications silver usage in batteries will be very exotic. Just an opinion....

Myrmidon..............electric car


I cannot recall details off hand. It was on an Australian Broadcasting Corporation radio chat show. It is however the Real MacCoy. I will try and source details.

The Vanadium battery is REAL, check it out via Altavista. Poetntail market in excess of US$ 1 billion per annum. The company who have the marketing rights are Pinnacle Mining NL - at this time they do not have a vanadium mine.

Check out Precious Metals Austrlia and their new vanadium mine in Western Australia - via Altavista. Good share but, still going cheap at AU$ 0.35 per share.
Aye Haggis



You must remember that it is a SCOTSMAN who has developed this new electric car, therefore it WILL be technically advanced.
Aye, Haggis

John Disney__A
Prime Resources
For KO

To surprise and dismay - silver is IN the calculation. 12 Million

oz of silver sounds REALLY BIG TIME - buttttttttt- try dividing

by 50 to convert to gold equivalent. - 240,000 oz.

Also 2/3 of their net assets are "resource assets" - I dont think

these "asset" are worth much after PM are extracted -

More like a liablity - ie a big hole in the ground that must be

returned to its "virgin" state to make greenie inclined people happy

along with mother nature. Prime do have maybe a buck a share in cash.

and one report refers to a 9 year life.

Buy - Enjoy - be happy - life's but a dream - But I'm not

having any prime, until I have a MUCH clearer picture of

reserves thanks very much

Silver Bull
While some of you argue why silver shouldn't be going up or just how long it might last, you are missing the closest thing to a "no brainer" that has come along in the last 10 years or so; since the copper rallies of the late 80's. Just because you are missing it, don't spoil it for others.

There is still 3 to 5 dollars to be made ( maybe more ) no matter what the "real" cause might be.

Did anybody care that it was the Hunts who drove the price to $50 when they bought at $5 or $6?

All markets are minipulated by somebody, if we are going to make money in them we have to be on the right side and let it play out. I will short silver just as soon as it is warranted and so should you.

Fundamentally and technically silver should be bought on pull backs of 8 to 15 cents ( if you get the chance ) .

John Disney
Best Wishes to Ya...


@ Haggis
Well said my friend, The air heads have not lived the 1972 - 1981 period.

By the way, I remember very well the president Ford "WIN" buttons.
( These stood for Whip Inflation Now! ) . What happened to them?

Another point, when in 1972 inflation was 4% it was considered very high.
The present air heads preach that as long as inflation is under control, less than 5%, everything is all right!

Macadam, Dunlop,Baird, Bell, McTavish
Haggis, I am kicking masel' mon. Canna recall the name of the Scotsman who designed a crucial part of the steam engine? a valve? a condensor? Oh, those canny Scots engineers..

John Disney__A
Hey wait a minute mister questor - slavery ia ABOLISHED
for the questor - YOU must make YOUR OWN spreadsheet. Ill send you

the methodology, and and soon as I have made MY spreadsheet, ( which

not even started yet ) - will send anybody an evaluation based

on that methodology. My motive is to substitute numbers for the

vast piles of qualitative bullsh*t on mine values - ie "deep",

"high cost", "strike prone" etc etc. lets all do some numbers and

talk a bit less. Who knows we may even start knowing what we are

talking about.

OMYGOD, we cant have THAT - the discussion will be ruined, and we

will just have to talk about cricket and the movies and stuff.

John Disney__A
Big Yellow Taxi - Took away my old man
For Salty

If you're out there in KitcoLand Joannie - I Love YOU


John Disney__A
Scots and the Steam Engine

For Salty

I think it was Ian MacWhistle.

The Scots peaked out with the steam engine - down hill ever since.


Clarifacation Re: your earlier fashion statement
Haggis- I only wear high heels if they go with the outfit.

Aurator-engineer is to Scot as jumbo is to shrimp

Myrmidon.............Gold in India


A number of Australian Mining Companies have attempted over the last three years to get involved in gold mining in India. The potential is HUGE, however the Indians have not got their act together concerning the Mining Laws. India has a number of Archaean Cratons and Proterozic orogens highly prospective for gold including the following region: The Aravlla Bundelkhand , Dharwar , Bhandara Bastar , Singhbhum , Eastern Ghats. One of the most important gold deposits occurs at Kolar situated on the Mysore plateau. Outcropping gold mineralisation occurs over a 25 by 1 kilometre area, with existing underground workings open to a depth of 4 Km. Gold grades vary from 6 to 15 g/t. Todate the deposit has yielded about 700 tonnes of gold.

Ten years ago in Kalgoorlie, mining was by underground methods. Now we have the Superpit of Kalgoorlie Consilidated Goldmines ( a JV between Normandy and Homestake ) , with resources - Measured 70MT @ 2.8 g/t, Indicated 12Mt @ 2.5 g/t, Inferred 64Mt @ 2.6 g/t - STILL with HUGE exploration upside.

I would suggest that the introduction of "new" evaluation methods and mining practices in India could radically increase their gold output. Technology is the name of the game.
Aye, Haggis

@ Silver Bull
As we analyze why gold should go up, similarily, we analyze the silver market.

We all like analysis, that is why we are in this site. I think you like to analyze things to, especially if you are heavily invested in silver. My apologies if we tired you, but in the process we all learned something, if not of silver, at least of car batteries!

John Disney__A
Prime Resources
For KO

Got message will revise calculation. 110 mill reserves of gold at

50/1 is say 2.5 mill oz of gold equivalent.

Salient point of prime is gearing to silver price.

Anyway I prefer this method of analysis and communication to talking a bunch of crap.

jOHN dISNEY................. Wrong again.

G'Day From Kalgoorlie.

Once again you have got your facts wrong. It was Mr Watt.

To make sure that you do not miss any FACTs, you should install above your computer, and linked to it, a siren and a flashing light, instead of your perceptions.....
Aye, Haggis

John Disney__A
Scotish inventions

For Haggis

Sorry - I was sure that it was MacWhistle - Grand idea with

the siren and flashing light - love it - thanks again

G'day Haggis
Just wanted to thank you for the research on Aussie platinum shares. It is this kind of effort that makes this such a great site. All contribute to make the very best info source on the net.

Although their platinum is in Africa, mention must be made of Delta Gold--probably the premier Aussie platinum stock--not too mention some damned good gold mines. Extremely volatile as well. I watched them go down to 90 cents on mini-crash day ( Oct 28th ) . A few of the chickenshorts would've paid you to take shares off their hands. DGD has many small holders--thus the extreme volatility. BIG price gain the last few weeks. I love them as they are like riding on a yoyo!!Have been in 'n out half a dozen times.

Haggis, mate. For you:

G'day John Disney. Glad you're a Delta fan. Good stuff!! You too are a top info provider here. No bs--just good hard facts. Keep 'em coming, mate.
Went into a book store the other day, said to the young bookmonger "I need a good read for the holidays." She said "whaddayalike?" I said "Wilbur Smith type books." She said "Wait here", and after a few minutes appeared with an autographed copy of Birds of Prey and said "Merry Christmas." Am now reading it. Good yarns-Wilbur Smith. Cheers from your ex-home.

two quarts of Cuervo talkin here, just a thought
The perfunctory absolutes we molest each other with are nothing more than soliloquy gone mad. Are we all that resolute in our simplistic beliefs.

Do you all not see that we are near a time of the birth of a Hitler, in a world searching for answers that cannot be attained in this life.

We gravitate to a hunger we have yet to understand and comprehend.

The only true worth in life is the slap of a friend's feet making his or her way into our home's needing a solid chair or perchance the comfort allowed by understanding conversation which allows a pleasant nights sleep.

This then is worth. Would you trade a hunk of metal dug from the ground, or a piece of paper that instilled a distrust or lack of want from a human being that you knew to be a friend.

Worth is a truly metaphysical concept.

We must respect the barbarians. And not listen to the hypocrisy of those that consider themselves to be intellectuals.

Nikkei down 497.50 -3.25%
Interesting times!


G'Gay from Kalgoorlie,

Aye, I suppose that the main difference between Engineers and Geologists is - Engineers tend to stand in front of rather large waves, whilst Geologists always can tell the difference between an large and a small wave observed from the beach.
Aye, Haggis


G'Day from Kalgoorlie,

Aye, I suppose that the main difference between Engineers and Geologists is - Engineers tend to stand in front of rather large waves, whilst Geologists always can tell the difference between a large and a small wave observed from the beach.
Aye, Haggis

@ Ko
... More interesting if gold was up!

John Disney__A
Scots, numbers, barbarians, soliloquies

For tolerant - I LIKE your attitude - "trust the barbarians" - "soliloquy gone mad" - excellent stuff. Keep drinking and writing

it did a lot for E.A. Poe and many others.

For Haggis - I cant remember - is it "Scots aren't good with numbers "

or "geologists aren't good with numbers" or is it "Scottish geologists

aren't good with numbers" ?? Can you help me on this ?


Nick@C...............Delta and Placer Dome


Delta have a huge resource/reserve at the Great Dyke in Zimbabwe, in joint venture with BHP. My understanding is that they are not too happy with BHP's operational management. Delta's exploration is very good, operationally non-existant.

"Rumour" has it that Placer Dome are making or are going to make a hostile bid for Delta. Can anyone verify this?
Aye, Haggis

jOHN dISNEY................

Hope you have got your siren and flashing light is a well known FACT that Scottish primary eduation, the formative years, teaches the three R's - Reading wRiting and aRthimatic.

Which ones did you miss out on?

I think that you have forgotten the fundamentals of public speaking - get drunk before hand and wing it!!!
Aye, Haggis

Haggis- a Placer Dome takeover could explain the big price rise on volume in Delta. There's a huge undeveloped platinum resource next door to the BHP/Delta venture that is 100% owned by Delta. Big miners must be salivating at the thought of getting their mits on that. They are currently producing ( or soon will be ) 3% of world platinum output. This would expand hugely if the undeveloped resource was tapped. Most S.A. production is tied up long term and the Ruskies are unreliable. This makes Delta a PRIME target.

jOHN dISNEY............


You never did get back to me concerning what is the South African equivalent of the Australian -

" Fair dikkum, far go, no worries, she'll be right".

What is it?

In Australia, it is NOT common practice to lie awake at night in case an axe murderer breaks in. It IS in Cape Town and Jo'burg.

See you later.................

Aye Haggis
Aye, Haggis

Haggis- How very true!! Been hit by a few waves in my time.But are the jobs we do really comparable? I know that I do not have the optomistic mind set that you boys live with. A producer must be pessimistic to survive. Gold is indeed where you find it and you gypsies seem to enjoy fossicking around and then moving on to the next hot spot. I like a few roots.

***Be my silver baby tonight.....
I keep on getting bounced off the www, sorry if erratic.

didja get me e-mail recently? Please e-mail me again, my ISP may be another service by Bstrds Ltd. -Products designed to P!ss you off.

OK, Platinum Trivia question today.

The name Platinum is derived from the Spanish, little silver, Platta is silver, Plat-ina, like elnina- baby platinum. Platinum was known to the pre-Columbian S Americans.

Q. Who was the great 19th Explorer who first explored the depths of the Amazon basin and then returned to Europe where his fortunes reflected his new found fame and thereaftewr financed an expedition to the Ural mountains where he discovered Platinum in vast quantities?

I think he also isolated Platinum as an element.


@A.Goose\Your post of 23:49,Dec.25th
Dear Goose, that's indeed good food... sorry, I mean - good post.
Don't know about conspiracy to bring down Asia, but U.S. debt is
A BIG PROBLEM, and US$ is A BIG PROBLEM, and which is a bigger
problem for A.G. ( means the U.S.A. ) - I do not know, but you got
it all figured out. Looks like A.G. has his hands chained...


Au Producer..........

I appreciate the job that you Engineers do, and believe it or not I have bailed a number of mines out of the sh..

I have a combined exploration, development and mining background, not just exploration, although that is what I focus upon now-a-days.

The combined name of the game is to make profit.

Aye, Haggis

from Calif......ornia...................usa......where the girls are warm........
ys gys r cule....and it is beer o'clock




go steve miller...............yeah...........aaaaaaaaaaaah...

AuProducer.................high heels


High heels, you actually wear them on "special" occasions!!!

I promise not to tell anyone!

Aye, Haggis

Have to sign off, see you later.

Answers for Aurator
Humboldt of current fame.

AuPRoducer: Spot on. Current?
Nick@C Happy Marsupials Old Boy

Aurator- the Humboldt current off the coast of South America.

G'nite Auracious
Happy Boxing Day--or what is left of it.

We're off to see the Wizard
Bema GOld
Anybody have any comments on bema and the Placer Dome deal signed dec 23
Looks like a good deal in my opinion especially if there is a rebound in gold probably boost the stock price


I agree with your interpretation that the Asian crisis was engineered via the Derivative Market. You may wish to read my earlier posting concerning derivatives, which is based upon Jessica Cross's observations and considerations.

Derivatives are not a balanced way to do international business. You cannot sustain medium to long term business based upon speculation. A GOLD STANDARD is required, and until such times as we have a GOLD STANDARD business will focus on crisis after crisis after crisis, which WILL eventually be washed up on the USA shores.

In Kalgoorlie, we are here to explore and mine GOLD. If we get hay fever, the rest of Australia has got flu.

Aye, Haggis

John Disney__A
Haggis an errant scot - wrong again

Been here nine years - not seen an axe murderer yet nor been

burgled - but burgled twice in TOO-RAK - no axe murderers though.

Hard to see you getting mines or anything else out of the sh*t.

Try numbers scotsman - Your language is too hard for me - ie


aieeeeee !!

jOHN dISNEY..........


You have most likely never yet ventured out of your Kraal.

Given that it is Christmas, you should try hard to make niceness your byword, no matter how many people walk all over you. Try and keep your simmering resentment to yourself.

You should try to enliven your world by telling everybody what you really think of them, and encourage them to do the same to you.

Hope that you a enjoying Xmas...

Aye, Haggis

jOHN dISNEY.............. a passing thought


A passing thought...............

Why don't you read a psychiatric dictionary and, JUST FOR FUN, try and see how many of your character traits match up with conditions in the book.

Have a nice day.

Aye, Haggis

Crystal Ball
@ all
I phoned up COMEX, Gold's open until 1:10 pm EST and Silver's open until 1:05pm EST. Happy Healthy Prosperous New Year to All ! !

Global Gold - subscription service


Numbers, numbers .........

A subscription service which you may wish to check out is GLOBAL GOLD

This service is well researched with valid "tight" recommendations concerning gold exploration and mining stocks.

Aye, Haggis

James Watts

Thank you for your 00:38 on Derivatives. I have seen estimates the world derivative market is 60 trillion with a T US$. Do you have any info on this?

@Donald..your comments, please


I am sorry but I dont have that info. If possible, I would like some other references in particular those dealing with Derivatives and Metals ( Gold ) .

My understanding, from my days at School, in dealing with Calculus, you always had to get the first equation correct before any derivative?! Fundamentals always come into play.

If the figure you quote is correct, looks like there is potential for a MAJOR stuff up!!

Aye, Haggis

jOHN dISNEY............


I would appreciate your comments on the GLOBAL GOLD service.

It was a pity that you had a break in at TOORAK ( top end or bottom end ) ; but no axe murders. It would therefore appear that you have the best of both worlds in South Africa, with the potential for both!!

I would also appreciate your comments on gold exploration and mining potential in Zambia ( that is in Africa, in case you don't know ) , in particular the area of the Big Concession Mumbwa District near the Kafue Loop ( I understand that Anglo and Equinox are active in an area identified by yours truely 20 years ago ) , and NE Zambia in the Archaean greenstone belt just over the border from the BIG finds in Tanzania ( in the area where the OTHER famous Scotsman David Livingston died ) .

Aye, Haggis

Good Morning. Hope you had a nice holiday. Mr. Smith has written an accurate analysis. Things we all saw here at Kitco. As I said yesterday, interest rates are the only thing that backs fiat money. If you want to keep people holding it you must pay ever higher rates. That is why the bankers prefer fiat money. Successful capitalism requires people to save.
With fiat money that becomes a fools game. If we are serious about capitalism and democracy we must return to honest money or risk losing the whole thing to whatever comes next. Central Banks selling their gold is like eating your seed corn. Those of us who are buying it from them are the true savers and bankers of the future.

Hi there Haggis!

You must know that in Johannesburg I for one have NEVER lain awake at night waiting for an axe-murderer to break in!! Can't speak for the Cape - JD?? But I felt quite upset & protective about my beautiful Jhbg- bad things happen all over the world... and we all have to take our chances.

A Sangoma comes over regularly to 'clean up' and protect my places and there very little in the line of barbed wire or bars, unless it was there to start with!

Johannesburg is a very beautiful place, which you're welcome to come and visit at any time and see for yourself!! Have a dear little guest cottage [ for free to Kitcoites [ the nice ones]

Regards- Colleen

Donald_A................. CB and gold


Do you have any detailed and valid statistics as to which Central Banks sold and/or loaned gold during 1997. Is it possible that we have a "Soccer League" of first, second graders etc, and is it valid to suggest that the proxie countries such as Australia, Argentina and who else were informed to sell or else?!

Could you expand?

Aye, Haggis



No disrespect is intended to you and jd. After having lived in SA, Australia and many other places, I only intend to highlight that life is Aussie, in particular Western Australia is fairly open when compared to others. No "panic" buttons, barbwire etc here. One can drive out of the drive way unhindered.

I would suggest that life in Jo'burg and for example Manila is some what difficult, depends what you are used to and accept.

It must be remembered that Western Australia is approximately 6 times the size of South Africa, with 3 million people as opposed to 46 million in South Africa. Western Australia is a pretty good place to invest in gold exploration and mining.

With respect.

Aye Haggis



I have been to Jo'burg numerous times, and used to live in St Andrews Street, Melrose - Scottish names again!!!.

You are welcome to visit Kalgoorlie any time, the best time being for the "Diggers and Dealers" Conference in July.

Aye, Haggis

Mike Sheller
Santa BABY!
TOLERANT: I shoulda spent Christmas sitting in YOUR lap. ( :- )

I have some net sales of all central banks combined. 1992 and 1993 average of 536 tons. 1994 I have no figures, 1995 232 tons, 1996 239 tons.

Thanks Donald! There was one thing wrong with this Christmas...
Whenever I used one of those new $50 bills for shopping, there was Grant's face, then the back side reminded me of Monopoly money.

To All............


Forget about Monopoly, it's an OLD game. Lets put our heads together and invent a NEW board game - DERIVATIVES AND GOLD. As "game money" we could use WON, YEN, DOLLARS, PESOS............

Aye, Haggis

To All............


Forget about Monopoly, it's an OLD game. Lets put our heads together and invent a NEW board game - DERIVATIVES AND GOLD. As "game money" we could use WON, YEH, DOLLARS, PESOS............

Aye, Haggis

@Haggis: Here is an opinion on CB sales
scound, the problem with BGO is that it's a tired story. I have bought and sold since 94. I don't try to analyze deals ( it makes my head hurt ) but I would just say it is probably best described as a fair deal. Neither party had sufficient leverage to get a "good deal". If the pog goes up BGO will benefit, if it does not, then the only thing that will attract buyers to the stock is the march of time towards production. But the conditions at their primary property -- high altitude/relatively low grade -- may make ROA a bit marginal. There is also a lot of overhang on this stock. In other words, a lot of buyers who are just waitng to get out if they can get there money back. I have watched it during the mini-rally recently and it did respond modestly which tells me it has some life. But it is a tired story. The SI thread still gets a lot of activity and some useful information is passed at times. Although a lot of whiners frequent the thread, you might drop in occasionally. All of the above, IMHO.



Interesting article.

How do you view Rothchilds involvement in Central Banks and major gold mining companies?

Given that derivative/future gold dealings are reported to have caused a physical vacuum of 8 000 tonnes of gold, how would you view Rothchilds involvement in this as a short term strategy.

On the other side of the coin, and given that Greenspan and Rubin may be proxies of the Rothchilds, how would you view Rothchilds involvement in a medium to long term implementation of a GOLD STANDARD, with particular reference to getting China and Japan "under control" and involved in a GOLD STANDARD.

Rothchilds have been, and are, active financiers of gold exploration and mining companies for a very long time. They are Masters of the Double Edged Sword, and are extremely unlikely to distribute gold openly to the masses.

What do you think.

Aye, Haggis

Bullish gold forecast dated October 24, 1997
Friday's trading in TOKYO saw prices mixed at the opening, but as the day wore on it was obvious the BOJ was in a losing battle to support the market. At the close the Nikkei was AGAIN WELL BELOW 15000 - actutal close was 14803, down nealy 500 points ( -3.3% ) ! ...and Domino Effect continues

I have not thought a lot about the Rothchilds involvement in gold. It seems no different than Bill Gates and software I guess. We all strive for a monoply in whatever we do for a living. In each of those business examples you can see the need for a standard. We all want a standard for the convenience and order it creates. At the same time we recognize the danger that a monoply produces in its control over our lives.

At this point in history we have a gold software standard that works from the technical standpoint but is a dangerous monopoly. It allows Microsoft to control our creativity to produce things.

When we had a gold currency standard that worked from the technical standpoint we sought to dismantle it because of the monoply over our lives it gave the holders of gold. Goldholders controlled our creativity to produce things.

Resolving those kinds of issues is not an easy task. We can not afford software chaos any more than we can afford currency chaos. Nor can we accept outside control of our creativity. That is the basis for all of the progress of mankind.


Myrmidon said: "Furthermore, if there is a world recession / depression, it will crash to about 100:1 to gold. Most of the gold bugs are thinking in terms of depressions, meltdowns, tanking etc. ( me included ) . Well, how can one be boolish anticipating an increase in industrial consumption of silver with this kind of scenario? "

Mr. Myrmidon, I do not follow your logic. In a world depression, I see it that silver must go up, not down....and even more so following gold's lead.
I am very interested in your opinion.... could you please elaborate.

Japanese banker predicts yen at 140 to the dollar by mid 1998
@ Cape Breton

Good morning!
Haggis,Donald: Enjoyed the dialog on Gold and the Rothschilds. My only comment is that the Rothschild family has a better understanding of cycles and human history than any government or world leader I know of. Since they cannot change the cycles of history, they have learned to benefit financially from the follies of humans and their leaders.

Did everyone notice F. Veneroso's comment last week that the BIS historically was the site of gold lending, but that the CB's decided to move the gold sales/loans to private brokers? ANOTHER said essentially the same thing months ago, but in more mysterious language. ANOTHER also said that a Rothschild set up the BIS -- the Central Bankers Bank of last resort, and I think the only bank in the world whose currency has a fixed conversion in ounces of gold - a true gold standard! I would love to hear what a Rothschild would have said about that CB departure from standard practice which lead to opening of the gold market -- since they were obviously in the know. Did they encourage or discourage?

Regardless, it seems the flood of gold loans/sales is over. I suspect the Rothschilds are now more worried about their diamond cartel than they are about their gold cartel. Diamond prices are more subject to price drops in deflationary times than gold prices.

@James Dines
Good defender James Dines' views

WSJ ........and Nikkei

December 26, 1997

News of Another Bankruptcy
Prompts Nikkei's 3.3% Decline

AP-Dow Jones News Service

TOKYO -- The market fell 3.3% in thin pre-holiday dealings Friday on
persistent fears about corporate bankruptcies and news that another
brokerage house may have been involved in irregular stock trading.

The Nikkei average of 225 selected issues fell 497.50, or 3.3%, to

"The market is worried about further bankruptcies in the next few weeks,"
said Dhia Amir, senior institutional sales trader at Nomura Securities.

Nitto Life, an affiliate of Nitto Kogyo, a major golf course management
company whose shares are unlisted, became the latest listed company to
seek bankruptcy protection after Nitto Kogyo filed for protection

Meanwhile, the Finance Ministry said Friday it has discovered in its survey
of brokerage houses that another company has been involved in irregular
stock trading, known as tobashi. The ministry didn't disclose the name of
the brokerage house, saying it's unlikely it violated the securities exchange

Tobashi was a big factor in bringing down Yamaichi Securities, which
collapsed in November.

In tobashi, a broker arranges a series of sale and repurchases of securities
at artificial prices among clients with different fiscal periods to let clients
avoid reporting losses on their securities holdings.

Return to top of page
Copyright  1997 Dow Jones & Company, Inc. All Rights Reserved.


Long-time veteran precious metals analyst starts his report with a Point & Future chart of LONDON GOLD, going all the way back to 1980. It clearly shows a TRIPLE-BOTTOM at about the $280 level ( 1982, 1985 and the present ) . The last two times it reached Dines Buy Zone, the yellow zoomed to the $500 area:

GOLD BETWEEN $3,500 TO $8,400...?

This prediction gains tremendous credibility after you read the credentials of its author:

About the Author: In 1965 Joseph Miller became a member of the
Chicago Mercantile Exchange. He was active in the exchange during the time Currency Futures and Interest Rate Futures were introduced by the Exchange, and served on the Board of Governors of the Exchange for ten years.

If we go back to an earlier section of this paper, we observed that after 1971, when the artificial pressure was lifted from gold prices that prices advanced to a peak of 24 times the old price and settled around approximately 10 times the old price. No two events in any market develop precisely the same, but just as an
exercise, if something similar happens this time, gold prices might peak near $8,400.00, and settle around $3,500.00 an ounce.

The remote possibility that these numbers can be correct, is enough evidence to make it easy to understand why the central bankers and high government officials around the world want to denigrate, denounce, discard, disown and dislike gold, plus keep prices low. It makes one want to take time to consider what the implications of anything remotely resembling this happening might be. The last time gold had been held down artificially for 37 years. This time, so far, it has only been 17, which may lessen the next rise. On the other hand we have asset markets that have reached such lofty levels, where no less an authority than the FED Chairman has described the situation, as long as a year ago, as "Irrational Exuberance". So who can tell? Let's not lose sight, while we are pondering the question, of the trillions and trillions of fiat megabyte dollars, yen, marks, and what have you, that are whizzing around the world electronically every minute of every hour of every day. They have to end up buying something, and it might just be gold one of these days.

Part II of his mind-blowing essay is located at:

WDL your URL didn't work. I hope this on doesn't get cut-off to.
Joke of the Day
Morning Ted, Vronsky ( thanks for the Christmas card ) . We made it through Christmas. It doesn't look like Japan is doing anything other than bleeding. Well here's a little something to get the blood running again. I think I have posted it before but its pretty good.

A lion in the London zoo was lying in the sun licking its arse
when a visitor turned to the keeper and said, "that's a docile
old thing isn't it?"

"No way," said the keeper, "its the most ferocious beast in the
zoo. Why just an hour ago it dragged a lawery
into the cage and completely devoured him."

"Hardly seems possible" said the astonished visitor, "but why
is it lying there licking its arse?"

"The poor thing is trying to get the taste out of its mouth."

Good morning Colleen, Mike Sheller!
Please check your e-mails for a XMas message about Crooks books! I am impressed with the depth of his knowledge, and the diversity of natural events that reveal the patterns of the fibonacci series ( what he calls Quantized ) . This observation, I think, indicates that the Universe is not really "Chaotic" at all, but highly ordered. It is just that there are so many cycles of natural phenomena, that we humans are unable to see the cycles most of the time. This is really what Chaos theory is all about -- that true Chaos is rare, and hidden order is much more common.

We know that markets can be synchronized by a major event such as a correction ( or worse ) . It seems that natural events follow the same rules as well. And a supernova blast sweeping the Heavens would beat a market correction anyday. Even an economic depression would be like a popgun going off in comparison. Natural cycles could be synchronized by a Supernova for thousands of years.

I find it interesting that one can now extend the concepts of the fibonacci series/Gann plots/Elliot wave analysis/Fischer logarithmic spirals, etc to natural phenomena. Mike -- as an Astrologer you probably alread knew of suspected this. I knew that the essence of Astrology could be unraveled by following the markets, but I did not know that the unraveling of some of Nature's greatest mysteries might come so quickly.

I wish I understood all of this better -- it still seems to me that we can only get glimpses of God's machinery this way -- but not the underlying principles. I suspect that Einstein was just as frustrated.

Good one.......Happy Boxing day!!

I GUESS YOU ALL NEVER HAD AS MUCH FUN .Did not you translate the french
sentence .................

ps:I will write you later on another interesting paper

To the option trade:are you determenists like Einstein
or rather like Prigizine




werner: I am a physicist by training, and I invest in precious metals or their associated equities. I am not an options trader, except as an interested bystander. I do not know to whom you wish to address your comments.

Would I be right in guessing that you are still celebrating Christmas?


Go out and buy yourself some Gold. You'll feel much better.....


You think he's imbibing or somethin?

Japan Nikkei just won't go up and stay up, will it?
All: Does anyone know whose money is being spent by the BOJ to push the Nikkei back up? Ours or theirs? And -- where is the PPT these days?

Thank you -- can't go wrong with that -- if you can't make up your mind.


God Damn Deck job
Off ta work ( surly grin thing ) ~~~~~~~~~~~


Looks like EB had a great time in Calif too! I don't think those Calif Girls had a chance! Right, EB?

Boxing Day
I know from my calendar that December 26 is Boxing Day in Canada. What is that all about? Is it a day when domestic violence is encouraged or does everyone go to the boxing matches?

Nick@C re:Wizard posting
WOW!!!!! The Oz looks great. Had brunch overlooking the heads at Sydney Harbour yesterday, but your satillite view tops that.

Singing off for now -- must take spouse to doc to see if she's over flu!
Take care everyone -- lots of bugs running around, and they are not all the relatively harmless gold type!



Are you still doubting my sincerity
I told you befor that god knows how to keep a secret............

dont take it badly



In case you missed Christmas, it was yesterday!

Aye, Haggis

Stochastics chart
All: Gold stochastics chart looks boolish to me



I thought your money was theirs.

Aye, Haggis



The Tokyo Stock Exchange has closed after a bad day spurred by a Ministry of Finance warning of further hidden corporate losses.

The Nikkei 225-issue closed below the psychologically
important 15,000 point level after falling 497.5 points.

The 3.5% drop on Friday meant the Nikkei average closed the week at 14,802.6 after rising on Christmas Day.

The Japanese Ministry of Finance ( MOF ) has so far refused to name the brokerage it says has built up undisclosed losses.

It is painfully obvious the NIPPON MOF will be announcing all the EXISTING FINANCIAL FAILURES piecemeal in order to mitigate the severity of their negative impact upon the NIKKEI... in the hopes of avoiding public panic.



You should try some Drambuie, that should do the trick!

Aye, Haggis


Hey Haggis

- care to make a Boxing Day prediction for the best performing ( immediate and long term ) Aussie gold stocks for 1998. Cheers.



Does the move by the Central Banks to move gold sales/leasing to Brokers represent a case of "sacrificial goats". I hope it does, as it may infer that the CB's want the best of both worlds, and enables them to restrict the "pool of gold liquidity". When was this done?

Aye, Haggis

Delphi ( Stochastics chart ) : MANY THX FOR THE SHARP LOOKING CHART. May I share some of my Technical Analysis experience with you. Stochastics as an oscillator can be very deceptive... and give false readings when the period is too short. Although I am very bullish on gold ( as if anyone didn't already know that ( :- ) ) , it might be more meaningful to post a longer term chart for those indecisive about gold's future prospects. If you have the data, I would suggest a monthly chart going as far back as you have data. Then do a 14 month ( period ) stochastic on the long-term chart. I have not looked at it recently, BUT I would venture a considered guess that the Stochastics is showing the same bullish posture as it did in early 1993.

Many at Kitco are anxious to see this if you have the data and time. Thx

To all...........


Posting of potential PLATINUM projects in Australia was posted early today ( Aussie time ) , late Christmas nite NY time. 10 projects and companies identified.

Aye, Haggis



I posted my considerations two days ago. If you could back track and have a look.

Aye, Haggis

@Astronomy in Asia
Friday December 26, 6:51 am Eastern Time

S.Korean industry facing "big bang," say analysts

By Kim Myong-hwan

SEOUL, Dec 26 ( Reuters ) - Soaring interest rates will prompt a ``big bang'' in South Korean industry, with survival of the fittest the order of the day, analysts said on Friday.

Many of the country's highly leveraged firms would collapse in the merciless world of a new South Korean economy, they said.

``The rules of the game are simple. High rates mean money shortages and many bankruptcies,'' said an economist at the state-funded Korea Development Institute ( KDI ) . ``They are certainly the prelude for a big bang.''

South Korea said on Thursday it would lift any ceilings on interest rates early next year and promote other financial reforms in return for $10 billion in swift aid offered by the International Monetary Fund ( IMF ) , along with many donor countries.

Seoul would also fully open up the bond market, speed up the opening of other capital markets and allow foreign banks and security firms to open wholly owned subsidiaries.

Yields on South Korea's benchmark three-year corporates tripled recently to around 30 percent as the country's financial system was falling apart under the weight of the currency crisis.

``High rates will eliminate many sickly companies and keep healthier firms from expanding,'' said Koo Kyong-hoi, analyst at Dongwon Economic Research Institute.

South Korea's inability to get lenders to roll over short-term debt has been at the heart of the crisis. About $15 billion of an estimated $100 billion in short-term debt was falling due this month and another $15 billion next month.

Fears that the country might declare insolvency pushed the dollar up to a record high of 1,995 won earlier this week, although it fell again to 1,498.0 by Friday's close.

The IMF's fresh loan arrangements calmed South Korean financial markets on Friday, with stocks recovering 6.74 percent and three-year yields dropping by two percentage points.

``The crisis is far from over. Expectations of the dollar's rise still remained high,'' said an economist at LG Economic Research Institute.

Analysts said South Korea may have to raise interest rates further to attract dollar inflows.

``Even high rates will not work unless South Korea regains foreign investors' confidence about its commitment to a swift restructuring,'' said the KDI economist.

Dollars were drying up in South Korean corporate finance as fresh dollar borrowings became almost impossible as a result of freefalling credit ratings for South Korean companies.

``The exit for escape is narrowing every day. Business conglomerates must slim down really fast,'' said Yi Seung-kook, head of research at ABN AMRO Hoare Govett Asia.

Analysts said high rates, a weak won and low stock prices would also combine to create an ideal climate for foreign corporate raiders.

``South Korea appears to have offered all it can to foreigners simply to stave off its debt default,'' said an economist at the Korea Institute of Finance.

Foreigners are allowed from this month to buy 50 percent of a stock and the limit would be waived before the end of next year.

G'Nite all..............

John Disney__A
It was Fas - ci - NA - tion at the O.K. Kraal

Dear Mr Haggis

It is clear that I must fascinate you - What ever in the world

did I do to get SO much attention from one wee dreary scotsman ??

And I cannot help but get the feeling that you are trying to get

a rise out me - sorry old bean - not interested - busy trying to

find axe murderers that might be lurking in the old Kraal.

For background, I lived about 5 years in Adelaide, and one in

Melbourne. I love Australia, and miss it. I also still have a house

in the Pyranees mountains in a place called Andorra. I lived there

for 3 years. And I was born in the USA. I could live in any of the

three places if I wanted to leave the Cape. But I choose to stay

here - Now why is that Haggis ??

Use your wee brain and see if you can figure it out -

In any event, we are not competing tourist agencies and Im sure

Western Australia is a fine place. But I live here and I like it. And

Im mainly interested in the economics of gold mines not geological discoveries and I have no opinion on the Zambian play you mentioned.

I doubt if your question on the gold service was serious but Ill

answer it anyway - the answer is No - I dont subscribe - I dont like

other peoples "tips" - I simply like the data - and I think people

should make their own minds up on that basis.

Aieeeeeee!! Bonzaieeee !!

Todays' schedual...
Holiday Schedule

All markets will be closed on Thursday, December 25, in observance of the Christmas holiday and Thursday, January 1, in observance of the New Year's Day holiday.

Market hours for Wednesday, December 24 and Friday, December 26; will be adjusted as follows:

OTC Bond ( Corp. & Muni. ) & Treasury markets will close .....2:00PM ET
Listed Bond ( NYSE, AMEX & Pac. Coast ) markets will close ...1:00PM ET
Equity markets will close at................................1:00PM ET
Equity option markets will close at.........................1:02PM ET
Index option markets will close at..........................1:15PM ET
Mutual Funds ...............................................12:00PM ET

There they go again
"the conspiracy theory"

Vronsky: Thanks for reply. I would be glad to build chart for longer period of time, but unfortunately, I have no data ( high, low, close ) for that. Kitco gives daily data in 10 min increments starting from February 1996 - bit time consuming to extract information and period is not long enough. Other sources I was able to find on Internet contain only close values, no highs and lows. If you can refer to some URL where it is possible to pick this data I would appreciate that.

jOHN dISNEY................


Really have to get some sleep in.

I hope you make a New Year's resolution. I final question, have you ever been to....what is that place called again?

As Robert Burns once said -

" Ye men of wit and wealth, why all this sneering".

Have a nice day.

Aye, Haggis

Boxing Day
Boxing Day is indeed Dec 26. It is the day of major sales of all the Christmas stuff that didn't sell and in some stores goes on til Sunday. It comes from the English practice of the rich folks giving all their servants a Christmas gift on the 26th.

werner vengeance....................bad loosers???????

Werner........ try the Drambuie.

in Haste-
Haggis- thank you, Sir for your response. I thought you 'had it in' for our beloved country...

JTF -Nick- Mike -SDRer and All

Just after posting the message to Haggis, my husband tool a strange turn- and I had to fly off. This is just a pause whilst waiting for my son to come back with him- but I was going to catch up on my mail and scrolling etc this am- it was impossible.

Take care all, -regards C

The Hatt
Pushing Gold Lower!!
The opening in New York today resumed with selling pressure as has been
customary most of the year. Donot know what the volumes are like but it
is that same old pattern we have seen for months. By driving the price
down at the open someone wants to take the momentum away from gold as
they recognise the danger in letting mo grow, especially with the huge
short position outstanding. Take a look at the last seven months opening
and tell me it doesnot look like a gameplan. Gold needs to claw back here
and show its strength or it is my humble opinion that the lows will be
tested one more time! Further strength at this juncture will continue to
cause the short side of the market to wonder about timing re: covering!

Werner@WhoeverYouAreTalkiingToOutThere ..
You are having an extra-ordinary one sided conversation. Hope you are enjoying it. As for the rest of us I can only believe we are mystified and mildly amused, yet completely confused by your ramblings, er .. half ramblings; like a guy with a wooden peg leg. Anyway, hope your feeling better tomorrow.

Mike Sheller
John Disney
A house in the Pyranees? hmmm. What have you done with Bernatz? Or am I barking up the wrong mountains?

Good Morning All

Really enjoyed Christmas yesterday and just stopped in office this A.M.
to check my email and catch up on Kitco.
JTF; liked your 15.55 of 12/24; will take another look at it as time permits.
Donald; also liked your 17.10 of 12/24 .This is so simple even I can
understand it.
To All; in my hast to scroll through 48 hours of postings I may have missed the answer to my question from 12/24; If IMF were not "involved"
in Korea and Asia etc; What would the markets be doing ?
Hope I phrased it better this time !

Aye, Haggis_A
Just two words in the world press...that's all it'll take..."gold

Strad Master
VRONSKY: Your intra-day chart page is still on December 24th! I've come to depend on its accurate charting so I miss it when it isn't up and running. Thanks. Hope you had a great Christmas!

@The Hatt
Looks like a puff of wind in our sails, volume has been so light so far this day may not be significant? Apparently many took the day off and I don't blame them.

Mike Sheller
John Disney
JOHN: Now that I have you in the holiday spirit, an observation and a question, if you please: I notice in my collection of Gold Stock horoscopes a very compelling feature of Durban Roodeport Deep. This, by the way, is one of those infrequent charts in my collection that goes back beyond this century, having been incorporated on February 16, 1895. Anyhow, Durban's Sun ( always a key point in a corporate 'scope ) is at 27 degrees Aquarius. Our kitco astrophysicists will quickly attest to the fact that on January 22/23 Mars and Jupiter conjunct at that exact degree! I know this is not your favorite category of statistic John, but can you tell us anything fundamental that may be cooking to coincide with the almost certain notable news or stock price action that will express on this date?


Did everyone see this bit about ROTHSCHILDS BANK & AUSIE line of credit....Donald perhaps you have a thread on this one ( SOURCE UNKNOWN ) :

Austrailian and British police said Tuesday they uncovered a $9 billion fraud involving fake gold certificates for bullion supposedly hoarded in an unidentified Swiss bank by Philippines' late President Ferdinand Marcos. Police in Australia said they arrested an unidentified 47-year-old man who would be charged with possesssing false documents, Inspector Jeff Calderbank said that ROTHSCHILDS BANK in London was contacted earlier this month by a group of Australians seeking a $7 billion line of credit.

Very short piece on this news...could someone find a bit more on this scam... Could many of these gold cert. be fakes?

Is this correct ?

This just came to me; With the drop in gold prices, mine closings and
now consolidation in the industry , isn't the gold industry going to have
fewer producers and therefore in effect a "de facto: cartel " resulting in
higher prices for the metal..
Comments please ?

@ Private Investor ; Re Gold Scam

I first saw a reference to this attempted scam in the Melbourne Age
newspaper on ( I think ) Christmas Eve 12/24 Aussie time. Also, if I am
correct, someone posted a comment to this site on 12/24 about it.


A Crash Watch for Christmas Eve?

There is no doubt that this is seasonally abnormal; there's also
no doubt of what can happen if Japan breaks the key
levels ( basically 14,400 or so in the Nikkei ) and doesn't bounce
back immediately. Such an event would travel around the globe,
flattening Europe in all likelihood, then creaming New York
thereafter. Views of what the New Year might ring in:

China Refoems Bank lending

In a major financial reform sprred by the Asian currency crisis , China on Tuesday announced plans to scarap bank lending quotas gradually. The Peoples Daily newspaper Tuesday quoted Li Tieying, minister of the State Commission for ECONOMIC RESTRUCTURING, as saying the quotas would start disappearing next year. Credit quotas are a legacy of China's Stalinist-style central planning dating from the 1950's . The system was designed to allocate credit through to state industry but now is one of the biggest obstacles to a commercial banking system.

Bank background (the Secret Life of Bankers --continued--)
Martin Taylor, CEO of Barclays Bank:
on banks... Its just that their gearing makes it more likely that mistakes will be fatal; poorly capitalised banks are like haemophiliacs on an assault course...

The greatest danger to banks still comes from other banks, whether in the urge to copy each others behavior or in the spread of trouble through the dry underbrush of the payments system. Perhaps the very low regulatory weightings for interbank business encourage indiscriminate exposure ( in which case blame the banks, not the regulators ) . The International Monetary Fund is a haemophiliacs convention. Think of those sharp elbows at cocktail parties. Sorry, did I knock you?

Lawrence J. White, NYU economics professor and former member of the Federal Home Loan Bank Board: on the utility of historic cost information...identical financial assets, with identical market and maturity value, may be carried on the books of different thrifts at different values, depending on the times of acquisition and market conditions at the times of acquisition. Conversely, different financial assets with very different market values will be carried by thrifts at identical accounting values. Thus, the accounting information creates a murky and misleading picture.

As Tolerant1 would say, "Hmmmmm" Murky and Misleading...

Strad Master ( NO UPDATES!!! ) : GOLD-EAGLE's Lab-dog was all bent out of shape, since there was NO turkey setting for him at the dinning table for the holidays, so he chewed up 4' of modem line... now being spliced. Hope to have Intra-Day charts up and running in the afternoon - but the enchanges may not be open. In any case rest assured Monday all will be honky-dory.

The Hatt
A good friend of mine who is now very wealthy once gave me some very
interesting advice re: being successful. This advice correlates with our
position as goldbugs and that is you can never truly be successful until
you have experienced the bottom and once you realize that you can indeed
survive the bottom you eliminate FEAR! We have been there and we have
survived quite nicely, now the shorts are another question! Should gold
retrace early this year it will not be a monumental problem for us,
however should gold break out and move to the upside, it will be a serious problem for the shorts. In my twisted way of thinking, the gold
bugs of the world are now in the DRIVERS SEAT!

Never heard about Stanley Milgram .You would all have scored 100%.
dont forget i will be watching!!!!!!!


- FRB Top-Dog Shares His Candid Opinion On Gold

- Greenspan: Still Going for the Gold

Once at the following website, scroll down until you see Mr. Greenspans bright-eyes peeping out at you, then CLICK him... where ever you like. IF you do NOT see Greenspans photo, RELOAD THE PAGE:


Do you know how far this thing went before it was halted?


Do you know how far this thing went before it was halted?

Thank You very much.

...being successful
The Hatt - REF: "you can never truly be successful until you have experienced the bottom and once you realize that you can indeed survive the bottom you eliminate FEAR!"

From first hand experience, I totally concur with your observation. I would just add one more essential ingredient to be truly successful: STAYING POWER... no one can be right all of the time, therefore we must possess STAYING POWER to survive the troughs of any cycle, or short-term errors.

CC- are you lurking out there? What is the potential for a stock like
PAASF @ $10 silver. Right now it is about $10.50+ could it go to $40?
I have a double so far this year and the gold shares I weant to buy are really good value now. Now lets take that $10 double with a potential of say $40. Sell PAASF and buy a stock like DROOY with a conservative potential of X 20, DROOY now is appx $1.6 X 20=$32? What is the best strategy?

Tally Ho

@ Private Investor ; Re Attempted Gold Scam

As I understand it, some guy in Melbourne, Australia had some
gold certificates and presented them to the folks in London. At that point, they called in Scotland Yard who contacted the Victorian police in Australia. The Victorian police arrested the guy involved.

TO Avalon ( Re: 11:10 post ) ;
Did you just figure that out now?

Hyatt and vronsky- am I reading you guys right, have we survived the BOTTOM? I am loaded with fear at the monent but hope that fear sensation will be replaced with happy- SOON. The more FEAR we endure the more FUN we will have when that time arrives. I am ready for the FUN to start!!!

Tally Ho

The Hatt- sorry for the spelling! Was thinking too hard about the FUN portion.

@ Mikey ; Yes, sometimes I'm just a little bit slow.

silver plate
Large silence
Has everyone forgotten silver? Haven't seen any recents comments.

@ Private Investor; Found it ! ! ! See below,

I was wrong on the day. Look up Hedehog's post on 12/23 at 16.56

Deflation Or Inflation
All-For some time I have been pondering the question of deflation/inflation. Will it be a deflationary collapse or highly inflationary times that will consume major currencies, including the US $. I have been leaning toward a deflationary scenario for some time, assuming that the market forces are still allowed to police and punish market excesses .The mountain of world's debt is inherently deflationary and therefore it is the deflationary implosion that would "clean the slate". I have been a fool.

The world's markets are far from being free due to governments' and primarily Central Banks' interference. This was not the case to such a degree in the late 20's.
What finally changed my mind has been the "unlimited" funds being made available to bail out the various "free"markets around the world. World central bankers will make sure that through bailouts, credit lines and various rescue programs the economies will stay afloat. ( The Japanese gov will use savers' money to bail out their banking system to the tune of $900 billion ) . The coming severe inflation will be the ultimate price for this manipulations.
Of course, the money being made available for these criminal market manipulations are made out of thin air. The only result of these actions will be a severe inflation.
The economic laws have not been suspended, only postponed. For example the retirement of US "on-book"debt of $5.4 trillion would double the M3 base. That alone would cause cummulative inflation of close to 100% over a few years.
No government can issue unlimited credit without consequences. The US monetary system has a tremendous inlationary forces stored within it already. The phenomenal rise in equities over the last decade or so is nothing else but paper asset inflation ( inflation that people like LGB are proud of ) . The goods inflation is coming with a vengence.
At this time, US FRB is printing money at a rate unseen since late '70s. The M3 indicator is growing at a rate well exceeding 10% and this is just the begining. Let's not forget that inflation is nothing more and nothing less than a MONETARY phenomenon.
It is my opinion that the biggest beneficiary of the market manipulations and the subsequent monetary impact will be gold. No CB selling will make a dent in the supply/demand equation once the investment demand kicks in.
Also, I believe that we have reached the climax in this game. By next summer things will be very different.

@-----'the best defense is a strong offense' ---THE gen. g. patton---

no question about, that single factor ( staying power )
is the most critical aspect ( imnsho ) of playing the
markets ( especially commodities ) .

an old saying-------'a successful man is measured by the number
of his failures.'

six-pack----your recent comments about being a loser.....

all you did was add another notch in your quiver....
you are a survivor, time to plan for the next attack....

patience and determination.....a game plan......

stalk your prey, whatever the quarry....
seasonal plays, channels, multi-year lows.....

patience.....AND determination, will eventually win the day.

nobody KNOWS AS MUCH AS YOU think they do!!!!

use your own mind, listen to your eyes, and never, never ever

six-pack---e-mail me your e-mail

santa claus rally? the door is fixing to slam shut on the paper-tiger
and her remaining week.

next week--------the mother of all sell-offs......


Silver Stocks
Finally, Silver Standard is moving up. Up 5% again; to buy 5 3/8!

TO Avalon;
Its Ok. Actually you have good timing. While you were making money
in other industries, we gold people, were feeling sorry about ourselves
trying to understand why the momentum investors ( heck everyone ) were
not attracted to our gold. While you were making money, we were all
loosing money. Anyone that tells you they've made money lately in
the gold sector has had too much to drink over the holidays. I'm
glad your sentiments are slowly turning towards gold. We might have
not seen the lowest yet for gold. probably $270. The bottom is near.
Mines are closing. Demand will increase. Supply will perhaps decrease.

Good luck

steady ( Deflation Or Inflation ) : MANY THX FOR your very incisive and insightful observations and conclusions.

@JTF: Looking for Marcos story stumbled on this...your department
Want to wish you and your family a great new year and thank you for a wonderful site. I enjoy reading the various position papers found there as well as the pm background info.

Estate of Ferdinand Marcos
All Stock Funds Loose $9.48 billion Last Week!!!
More on Marcos estate
@ Donald; Re Marcos Gold/Attempted Fraud story

The attempted fraud story was reported in The Melbourne Age ( normally
a conervative newspaper ) ) . Look up Hedgehog's post on 12/23 at 16.56
as it contains a link to the story.

Government Bonds, Money and South-East Asia: The Great Deception

If we accept that government bonds and currencies are at best an illusion of wealth, and that stock markets trading at 5 times book value may be over-priced in view of falling profits and currency upheaval, then the only investment alternative is gold. Realizing this, governments have driven down the price of gold. In order for the world to continue to believe in the government promoted illusion, the price of gold must continue to fall. If the world were not on the edge of an economic collapse, the price of gold would not be so low. An analysis by John Kutyn:

@ steady; 9.4 Big ones is some real money .

Marcos-OZ not yet, just this
It will be both. The deflation we are undergoing now and shortly the inflation for which the "foundation" is being laid now. Short the yen now, buy the C$ long ( later ) for its underlying asset value: gold, silver, oil.

steady- that was reeaaallll goooood and I agree with you 100%.

Tally ho

I wouldn't be so hard on yourself for expecting deflation over inflation, wrong prehaps, but certainly no fool.

I too would agree that inflation in the U.S. is more of a threat going forward than deflation. Money growth is accelerating, wage growth is faster than its been at any time this decade. Supply disruptions of oil for political reasons and food due to weather are both possibilities.

Where I disagree with you is over the issue of financial asset inflation. A case can be made that financial assets are over valued, but not dramatically so.

Do not forget that this recovery has been driven by a dramatic rise in profits. As a share of GDP, profits have risen from 6 to nearly 10%. The rise in profits is due in large part to the drop in interest rates, in part to the decline in medical inflation ( and hence benefit costs ) and a decline in the share of GDP going to wages.

The rise in profitability does justify some of the gains in the value of finanical assets. The above average valuation gains are due to an expectation that this favorable environment for financial assets, low inflation, steady growth, increased globalization, rising profit share will continue. We will not know until next year, if the stock market valuations of today are excessive. If they are, then there will be a correction, but not a crash.

@ Mikey ; Re your 12.50 No offense taken ; it seems to me ( in my limited

experience ) that there are two types of folks who frequent this site.

First, there are the "died in the wool" goldbugs, along with some others

such as traders and geologists etc. who fervently want gold to come back because their livelihood depends upon it for some reason ( either they work in the industry or they trade gold in some form ) OR the second

type of person ( such as myself ) who is trying to educate himself about

the industry. I am a businessman and can normally follow logical

arguments and their "flow on" effects. I think this is a tremendous

site with many points of view and I have learnt ( and am learning ) a lot

here about international finacne, the gold industry and market and the

technical charting of stocks, etc. That's all for now .

CB's moving from BIS gold sales to private broker gold sales - when?
Haggis: I don't recall the Veronoso article stating when this happened. This is probably about the time that the LBMA gold trading started to explode .. my guess is that this happened at the end of 1996 when gold started to drop in earnest. You wonder -- perhaps the BIS could not sell the gold fast enough to protect certain banks in need, or that special interests wanted to encourage more downward speculation.

It is clear now ( hindsight is 20-20 ) that the subsequent rising of the dollar associated with the dropping price of gold had much to do with the demise of the SE Asian currencies. If certain "powers that be" engineered this process to trip up currencies rigidly linked to the US dollar, it would have been diabolical indeed! I think the more likely explanation is that certain CB's desperately needed dollar reserve funds for a hidden crisis of some kind, and inadvertently triggered something much worse for the rest of the world in the process. Another fairly well-accepted rumor is the one about the need for a favorable balance of trade between Europe and US, until the effective April 31,98 deadline for the Euro -- hence the need for a strong dollar.

As someone wisely pointed out on this site, diabolical plans as a cause of a crisis are relatively rare, as ineptitude, or the inability of different nations to work together are much more common.

How does one continue counting after reaching the trillions.We better be prepared!

Gold Clusters!
Donald: Thanks! It seems that these Gold molecules have unusual quantum mechanical properties at ordinary temperatures. Perhaps the scientist types studying these molecules are finally coming to understand why gold is so corrosion resistant. We now know that permanent magnets act as if they have tiny superconducting magnets in them ( magnetic domains ) -- also a ( nearly ) macroscopic quantum mechanical effect. The bottom line to all of this is that scientists are finding more and more macroscopic physical phenomena that are more quantum mechanical than they are classical physics. That "Quantum Universe" is becoming more and more evident to us every day!

Pedro: Good point, and that is exactly the best reason to own
Gold ( PM's ) .
Politics, politicians, economists and bagmen control the money supply.
The only thing backing the money supply is the honesty and reliability
of these same.
There is no limit to what can be printed and sold to the public.
The PM's are extemely limited in supply and impose discipline on fiscal policies.

Finally, the Marcos Gold Certificate fraud post. Thanks Avalon

why is platinum showing +15.00 on kitco when all other
sources are showing +1.00??

GOLD BETWEEN $3,500 TO $8,400...?

This prediction gains tremendous credibility after you read the credentials of its author:

About the Author: In 1965 Joseph Miller became a member of the
Chicago Mercantile Exchange. He was active in the exchange during the time Currency Futures and Interest Rate Futures were introduced by the Exchange, and served on the Board of Governors of the Exchange for ten years.

If we go back to an earlier section of this paper, we observed that after 1971, when the artificial pressure was lifted from gold prices that prices advanced to a peak of 24 times the old price and settled around approximately 10 times the old price. No two events in any market develop precisely the same, but just as an
exercise, if something similar happens this time, gold prices might peak near $8,400.00, and settle around $3,500.00 an ounce.

The remote possibility that these numbers can be correct, is enough evidence to make it easy to understand why the central bankers and high government officials around the world want to denigrate, denounce, discard, disown and dislike gold, plus keep prices low. It makes one want to take time to consider what the implications of anything remotely resembling this happening might be. The last time gold had been held down artificially for 37 years. This time, so far, it has only been 17, which may lessen the next rise. On the other hand we have asset markets that have reached such lofty levels, where no less an authority than the FED Chairman has described the situation, as long as a year ago, as "Irrational Exuberance". So who can tell? Let's not lose sight, while we are pondering the question, of the trillions and trillions of fiat megabyte dollars, yen, marks, and what have you, that are whizzing around the world electronically every minute of every hour of every day. They have to end up buying something, and it might just be gold one of these days.

Part II of his mind-blowing essay is located at:

"gold sales by the central banks are a plot to destroy the popularity of gold as a security blanket"
``Like pirates, a group of commodity funds and hedge funds is wandering the world looking for weak currencies or commodities to attack"

Monday November 10, 4:44 am Eastern Time

SOURCE: PR Newswire

FIFTH ADD -- NYMONEY -- Money Talks

by John Tompkins

``Like pirates, a group of commodity funds and hedge funds is wandering the world looking for weak currencies or commodities to attack,'' says Douglas Donald, strategist and advisor to gold-oriented mutual funds. ``These are big, big funds and they deal in monstrous sums. This is hyperactive money: if it isn't playing in one place it'll play somewhere else.''

The predators strike suddenly with huge short sales. They sell and sell until their target currency or commodity has fallen far enough to produce hundreds of millions in profit. Then they rove in search of other opportunities. Recently they destroyed Thailand's baht, attacked the Taiwan dollar, threatened the Greek drachma, tested the Brazilian cruzeiro, shorted the Hong Kong dollar, and raided nickel and copper on the London Metal Exchange.

They also helped hammer the price of gold down to a 12-year low. Short sellers and hedgers took advantage of the weakness in the market created by the Australian central bank sale of gold -- and even more by the recent statement that Switzerland may do the same thing. Mark W. Johnson, portfolio manager of USAA Gold Fund [USAGX - news] calls it ``devastating news'' because every other central bank and every other speculative player is going to think ``I better sell first.'' Actually, Switzerland said this spring that it was studying the possibility of revaluing its 2,600 metric ton gold reserve up to market price freeing as much as 1,400 tons for uses other than backing the Swiss franc. At the time this caused little stir in the gold market. Recently, the Swiss announced that a group of ``experts'' had recommended revaluation which brought the market to its knees because it began to sound real instead of a theoretical threat.

The scheme has to be approved by popular vote since the Swiss constitution requires that every franc be backed by 40% in gold reserves. Even if the nation and the parliament and the central bank approve the revaluation and sale it would not take place for a couple of years. Market reaction is making the Swiss conscious of the need to maintain confidence in their franc. Gold has always been a strong psychological support for that confidence. Perhaps that's why Finance Minister Kaspar Villiger says that any sale should not involve all of the 1,400 tons of gold proposed by the experts.

The mutual funds invested in gold stocks have been beat-up and out-of-favor since January. Most of them tumbled sickeningly in net asset value and total return as the metal itself plunged. Then, a few weeks ago -- much to my surprise -- some of the gold-oriented mutual funds enjoyed a sudden and unexpected return from the depths.

Having gold funds do pretty well in the midst of a bear market in the yellow metal is odd. Stranger still, the performers are those funds loaded up with shares in established mining companies. All last year and until mid-summer the hottest gold funds were those invested in so-called ``junior'' exploration and development mining companies. While the price of the stocks in blue chip miners is tied to the price of gold the juniors trade on great expectations.

Until this June the funds-holding juniors laughed at managers who bought the likes of Homestake ( NYSE: HM - news ) , Newmont ( NYSE: NGC - news ) , and Freeport ( NYSE: FTX - news ) . But there's been a reversal of fortune: the nerdy funds that own senior mines are doing pretty well, but those who risked all on juniors are crying the blues. Mark Johnson says his ownership of big name gold stocks helped his fund in the third quarter but hurt it most of last year. According to Lipper Analytical Services gold-oriented funds were the top performing sector in the last two weeks of September. For that entire month Lipper ranked Rydex Precious Metals Fund number one among the 38 gold funds it tracks with an astonishing return of 10.4%. Morningstar lists Rydex as first among the top 25 gold funds in total return for the three months ended in October with an even better 13.7% return.

Rydex' portfolio is heavy on the established mining companies such as Barrick ( NYSE: ABX - news ) , Placer Dome ( NYSE: PDG - news ) Santa Fe Pacific ( NYSE: GLD - news ) , and Getchell ( NYSE: GGO - news ) . Yet none of the other conservative funds came near it in performance. The tip off: Rydex' turnover ratio is an amazing 1,036.37%, ten or 20 times as much as most funds and double the turnover of the very aggressive growth funds run by Garrett VanWagoner. Dan Gillespie, manager of Rydex Precious Metals admits, ``We do a lot of trading.'' But that's not the whole secret of Rydex' performance. ``The key is potential takeover candidates,'' says Gillespie, ``because you're going to see lots of consolidation.''

USAA's Johnson is interested in owning companies likely to be acquired, but he also looks for low cost producers because he figures they will survive in a prolonged period of depressed gold prices. If and when gold prices improve, the profits of low cost mines will skyrocket.

Like other funds in the Rydex family, the Precious Metals Fund tries to mimic an index, in this case the American Stock Exchange's XAU gold index, which is made up of established gold miners. The minimum initial purchase in the fund is $25,000 and Gillespie says that the clientele is mostly investment advisors. Gold may have lost its ancient reputation among central bankers, but Dan suggests there's a lot of uncertainty in the world and many people are still using gold to hedge worries about it.

The infamous Bre-X Minerals Ltd., scandal over the fabulous gold claim in Indonesia that turned out to be fraudulent hasn't been forgotten. It's not considered a problem for the industry anymore except that investors are considerably more careful when evaluating junior mines. Doug Donald says a much bigger problem is that stocks in many of the junior mining companies are selling at very low prices which makes it hard for them to raise new money. They're cheap because the market for juniors is very thin which means they're hard to buy and even harder to sell. This situation offers great opportunity for astute investors. Donald notes that a number of juniors have cash equal to 80% or 90% of the price of their stock.

Mark Johnson adds that the low price of gold makes it hard for small juniors to justify the expense of developing new mines. The established seniors don't have to raise money for new mines and they would rather add to their proven reserves by acquisition. At the moment many mines are being closed because their cost of production is higher than the price of gold.

Very, very few among the gold crowd are willing to estimate what the future price of gold might be. USAA's Johnson thinks the metal won't go anywhere next year because of continued central bank sales and short selling. Most gold analysts have tried to forecast prices too often and been wrong. But, Leanne M. Baker, gold specialist at Salomon Brothers, is still a bull on gold in the face of all the bearish news. She estimates that gold will average $345 an ounce this year and $375 an ounce next year. Considering the present price of bullion -- $315 an ounce -- those forecasts envision the uptick in prices that often comes with the holiday season.

The holiday season for gold is the wedding season in India which begins the middle of this month and runs to the end of February. India consumes about 500 metric tons of gold a year, more than any other country. The Indian wedding season, which involves about ten million marriages a year, produces a demand for around 300 tons of that gold in the form of jewelry for the brides. Last month the government decided to allow unlimited importation of gold which should add to total consumption. It should also end the smuggling of gold into India estimated to have run at 120 metric tons a year.

There's a strong emotional element in gold that modern day central bankers raised on the doctrines of John Maynard Keynes simply refuse to accept. They insist that paper dollars, marks, or francs are just as good as the metal itself, but ordinary people feel differently. Those who've experienced revolutions, invasions, enemy occupations, runaway inflation, anarchy, and the repudiation of currencies know in their bones that gold is accepted as nothing else. " Some fund managers believe that gold sales by the central banks are a plot to destroy the popularity of gold as a security blanket". USAA's Mark Johnson disagrees: ``It isn't a scheme. These guys are true believers that gold is not worth keeping.''

Still, it means something that U.S. Government sales of gold American Eagle coins to individuals totalled 461,750 ounces in the first nine months of the year, an increase of 187% from 1996. Of course the buyers were not central bankers. There's an old saying that ``gold has no smell.'' Holders of the yellow metal have no way of knowing -- if they want to know -- the true origin of the gold they own. This was notably true during World War II when the Germans were using gold looted from banks of occupied countries and even from the dental fillings of death camp victims to buy strategic materials abroad.

The origin and fate of Nazi gold in Switzerland revealed because of the agitation of holocaust survivors has badly damaged the reputation of that country. And the story is not yet over. Now, it comes out that as recently as 1951 Citibank [then National City Bank] took $30 million worth of looted Nazi gold bars as collateral for a loan to Spain. At present prices that gold would be worth $300 million. The Federal Reserve Bank of New York helpfully melted the bars to erase the swastika stamp and recast them with the stamp of the U.S. Assay Office. Apparently it was all ``legal.''

The story goes on and on and on. Argentina has promised to investigate 97 Argentine companies said to have been started before, during, and after World War II with Nazi money. Fifty-year-old U.S. intelligence documents say that over $1 billion was sent to Argentina for investment a month before the war ended. There have been rumors over the years that gold was spirited out of Germany by submarine. Early in December, the British government will hold a conference on looted Nazi gold still held by various governments in an effort to get them to agree to give up their share of the loot to the fund for victims of the Nazis.

The full story of the Bre-X Minerals scandal also remains a mystery. One who presumably knew the scam from the inside was Michael de Guzman, Bre-X's Philippino geologist, who fell, jumped, or was pushed from a helicopter in Indonesia shortly before the fraud was uncovered and is thus unable to answer questions.

But, there are those who whisper that Guzman is alive and well and likely to show up in a supermarket tabloid as Elvis Presley does periodically.


SOURCE: PR Newswire

Cherokee: The quotes looked real as the price was updating all morning between +5.00 and +17.00

On inflation/deflation argument. Printing the money does not in itself cause inflation. The printed money must also be spent. It remains my position that the billions ( trillions ) being printed or electronically created for bailouts will not be spent. It will pile up in the banks now being rescued, perhaps to be loaned out 30 years from now. Additionally, from the funds now being created you must deduct the funds being lost; as in your subsequent post of 9.3 billion last week. Trillions more of that nature will be lost in the weeks ahead. The net result is deflationary. The good news is that your gold investments will improve in purchasing power even if they are reduced in dollar value. The Dow/Gold Ratio being one of the best examples of that phenomena.

The risk of inflation increases after the damage done by the deflation. That is when the funds now being created could become a problem but, again, that is likely 30 years away.

@Karlito on financial assets valuation
Karlito, your justification of financial assets validation have one basic problem - its done using accounting principles which look at the current status of the company but valuation is based on an expectation of investors that this trend will continue ( and you alluded to it in your post ) . Yes, company profits have risen, however to do so companies squeezed into books every possible trick to increase their profit. You mentioned wages and medical cost. This are just two areas where company put all the burden on employees. Yes, I keep paying just about the same amount for my health insurance ( so does the company ) , however just recently I needed some major dental work and my insurance carrier covered just a fraction trying to say that I sould keep that I may not need front teeth bridge and can chew as well without it. Well, I can chew, but I cant face clients or go to fulfill my commitments to speak at some international forums without it, meaning - I eat the cost.

This approach on cost side is not sustainable forever and company profits will eventually go down. Money I spend on aditional med. cost ( to increase a company profit ) way wont make it to market to buy other products ( just as well money I dont get in my paycheck wont make it to market place )

On the revenue side, you know that we are reaching the point when there will be a fierce competition for global market ( and such competition in the past ended in two world wars WWI and WWII ) . Dont bet that approach the US took in the past will work ( negotiation from the point of view that everybody will bow to the almighty US ) .

Expectations wont make it, and there is not much you can squeeze from expense side on company books. Accounting is essential for running business, however, it is useless when you are trying to determine where what is happening in the country or in the world and to value financial assets you need to consider these factors more than P/L statement of the company.

John Disney__A
Dbd Deep and the STARS
For Mike -

I Believe that the rangold group quarterly results will come out

sometime around January 22 ish. However, I believe that short of some

form of divine intervention, they are going to be awful.

Durban's only hope of success would be, for example, to have arranged

a licensing agreement with the Bernatz Alchemy Inc Gold Wizard process

- seems to be taking the industry by storm - I think it was first used somewhere in the Pyranees.

Karlito_99 re: "we shall see .."
What measures of valuation do you use which suggest that today's stock valuations are 'in-line' with current Corporate profitability?

What use is Corporate 'profitability' for the investor ( since dividends are no longer a way for most investors to share in corporate profits ) ?

Share price appreciation is virtually the only means of reward for today's investors. The share holder does not profit from the operations of the corporation but from the actions of the market as it revalues the 'market value' of those shares each moment those shares are traded. There is no history of profit distribution and hence no expectation of actual reward for holding a stock.

What real, actual local business would you be willing to buy at 63 times its annual profit distributions ( equivalent to 1.6% dividend ) ?

Certainly you would admit that today's valuations are subject to change, as you said in your post. ORACLE posted a decline in earnings and in one day its shares were revalued -30% by the market. So things can go down as well as up, eh?

Do you sincerely believe that a market were a corporation's share value can drop by 30% is anything but a speculative market sitting at the very top of its pricing structure?

And if we are at the point where speculative pricing is indeed the rule of the day ( as I believe that any and all reasonable indicators of valuation are screaming at the top of their collective lungs ) , and that pricing is now in a very fragile state ( ie - ready to fall drasticly at any moments notice ) , then WHY WOULD YOU BE RISKING ANY MAJOR PORTION OF YOUR ASSETS BY BEING INVESTED IN IT AT THIS TIME???

Please tell us the % of your worth you have in stocks today. LGB, who is your twin brother, pulled out of equities late this Fall. Even he thinks this market is way over bought.

Hope you are not hurt to badly by the market as it collapses because everyones speculative assumptions were not supported by reality.

Beautiful words...."year-end short covering by funds"
Re your inflation/deflation expectations. Hasn't much of what is being replaced with bailouts already been spent by the "borrowers" on real estate and such? Hence inflated prices in the past for these items. The price decreases of these items, together with the unrealistic expectation of return is what is causing the very defaults now occurring. I would think what happens now is dependent on how much spending is stimulated in an effort to keep the paper asset bubble going. And that is an open question.

I've been speculating here recently, that the Fed sees it as dangerous to the world system to allow the US to lapse into 0 or neg. growth while other economies are so weak. In other words, they must be given a chance to export their way back. This is why, despite enormous demands for liquidity, I don't see them letting short rates rise more. The chart I posted from the NY Fed relating yield curve to recession, is, I think, a guide they may very well use.

Re your inflation/deflation expectations. Hasn't much of what is being replaced with bailouts already been spent by the "borrowers" on real estate and such? Hence inflated prices in the past for these items. The price decreases of these items, together with the unrealistic expectation of return is what is causing the very defaults now occurring. I would think what happens now is dependent on how much spending is stimulated in an effort to keep the paper asset bubble going. And that is an open question.

I've been speculating here recently, that the Fed sees it as dangerous to the world system to allow the US to lapse into 0 or neg. growth while other economies are so weak. In other words, they must be given a chance to export their way back. This is why, despite enormous demands for liquidity, I don't see them letting short rates rise more. The chart I posted from the NY Fed relating yield curve to recession, is, I think, a guide they may very well use.

vronsky I would like to have you on our radio program
vronsy, we have a radio program that airs on world wide christian radio as well as several other networks across the U.S it is estimated that we have approx.over 1 million listeners and after monitoring your posts for some time now I have come to request an interview on our program "On the Brink" hosted by Michael Haga. I would like to discuss this with you further if you could please give me a call I would certainly appreciate it. The # is 1-800-894-0540 x-105 ask for Kevin.

I will be unavailabe from 2-3 P.M. central today but I will awaite your call.

Thank you.
Kevin R. Alger

Here are the latest Comex inventory figures released after today's trading session:

Gold: Rose 16,480 ounces to 504,169

Silver: Increased by 966 ounces to 110,690,020 ( just above a 13-year low )

The odds strongly continue to favor a continuation of the upsurge in Silver prices with a possible acceleration once many traders come back from the holidays. Then it could pause and correct a bit ( not as much as most would expect though ) and then the biggest move up is still ahead.

Inflation of Deflation?
Carl,Donald: I still have real problems with this choice of which comes first. Donald - your comments about money stored, and not spent makes sense -- dollars which never see the light of day may never haunt us, or at least not for now. What really worries me are those reserve dollars that every country in the world ( it seems ) has. These dollars are no threat to us, until that country develops financial problems, and spends those dollars for some reason. EG, Mexico in 1994. Also as Carl is saying, I think -- just how many dollars are going to go into easy credit, such as the deal we made with S Korea, I think it was so they could buy our goods?

My intuitive feeling -- with no solid facts to back this up, is that the US economy/dollar is still too strong for that outright crash, and that we must be "softened up" with a period of inflation before our inevitable deflationary episode. I know D.A. thinks we will have an inflationary period. Perhaps what we need to do is entice D.A. into explaining his reasoning to resolve these issues.


Long-time veteran precious metals analyst starts his report with a Point & Future chart of LONDON GOLD, going all the way back to 1980. It clearly shows a TRIPLE-BOTTOM at about the $280 level ( 1982, 1985 and the present ) . The last two times it reached Dines Buy Zone, the yellow zoomed to the $500 area:

Dow/Gold Ratio = 26.03 Down 9.1% from the December 9th intraday high of 28.64

XAU/Spot Ratio = .254

Silver/Gold Ratio = 46.37

Gold Mining @ USofA Congress & $65 Million
March 13, 1997



WASHINGTON ( AP ) -- A Clinton administration proposal to pay a mining company $65 million to abandon a gold mine near Yellowstone National Park ran into scathing congressional criticism Thursday over how it would be financed.

Several Republican politicians representing agricultural states accused the White House of paying off the Canadian mining company, Crown Butte Resources Ltd., at the expense of a popular agricultural conservation program.

The administration says it has offered Crown Butte $65 million in cash over a number of years as part of an agreement reached last summer to abandon the New World Mine north of Yellowstone.

The proposed gold mine has been the focus of intense controversy for years as environmentalists maintain it would threaten one of America's premier national parks and contaminate a significant watershed outside the park.

The company, controlled by Noranda, has yet to say whether it will accept the offer. Some aspects of the agreement must be approved by Congress.

The White House says the money would come from royalties the Interior Department receives on coal, oil and gas leases on federal land in Montana.

Karlito99, re: stock valuations...
In addition to the valid points raised by Allen and Donald, I would add only this:

I once quoted Albert Hettinger...Accounting is a way to tell the truth. It would be a pity if that idea died off with Hettingers generation.

But it did: the story since the 1980s in the financial markets is in many ways the story of the death of honest accounting. ( M. Mayer, The Bankers p. 424 )

@Carl, JTF
Banks in Japan are only now being forced to acknowledge that mortgage payments are not current. I understand that Japanese law allows 2 years of non-payment before the official acknowledgement is made. Most are over that point now and the government just winked at it. Now default by borrowers will be officially declared.

The collateral associated with the defaulted loans must be liquidated. In the case of Japan that amounts to many, many trillions of yen worth of real estate that must be sold to the highest bidder. The new owners will be bidding into a falling market as thousands of properties must be liquidated simultaneously. All properties, even those not being sold, will be marked to market. Thus even those owners who might now be current with mortgage payments could decide to walk away from properties which are falling in value. They are not going to pay for a dead horse. That is the way a downward deflationary spiral works.

Mike Sheller
John Disney, Donald
JOHN: Thanks for the reply on Durban. Have a few South Africans in the old chartbook. If you ever get curious, I'll look at a name or 2 for you if I have its Inc. date. DONALD: You raise a potent point re the billions ( trillions? ) of created money being ( and in future ) parked in institutional accounts to bail them out. While I "understand" your point, I must contend with your thought that "inflation" will not express itself tangibly because the money will be "going nowhere" ( to paraphrase you ) . Any and ALL created money goes FIRST to the intended favorites, associates, or accomplices of the governments that create the money. Just the absorbtion and retention of such colossal sums will inflate SOME kind of asset relating to the need for these funds. Whether the receiving institutions siphon it into swiss bank accounts ( maybe not so reputable a choice these days ) or spend it on beer and potato chips, SOMETHING SOMEWHERE will benefit. An asset ( the Swiss banking system ) , a commodity ( beer and potato chips ) or whatever. Or certain institutions within the receiving country, OR certain instiutions in OTHER countries in which the money is "invested." The trick ( speculation ) is to anticipate how this newly created money will be used, and where it will find its way to. Money is of no use, and that includes paper, if it is not spent - though I DO accept the value of a hoard as as valid as anything else.Ultimately, as the process becomes sufficiently aberrated so that it unravels by itself, some, if not much, of this created money will go into gold. A little bitty bit of gold in the world compared to all those paper bills and glowing electronic numbers. But it will go into other things too. And it will go into other things FIRST. Perhaps we will not immediately see the kind of "consumer" inflation we have been traditionally wary of. Perhaps this will be the "Power Elite Inflation" that we have been watching mount all the while in this monster paper bull. Until it explodes, the game can go on a while longer.

Inflation/Deflation @ Market Spin "All Is Well"
March 14, 1997


TORONTO ( CP ) -- Stock prices gained some ground Friday after the previous day's big selloff as encouraging news about U.S. inflation calmed the nerves of skittish investors.

Bay Street and Wall Street are on edge as they watch for signs the U.S. economy is heating up quickly enough to prompt the U.S. central bank to hike interest rates as an inflation-calming measure. Statistics released Thursday heightened their fears. But it was a different story Friday.

"The Dow is at the 7,000 range, so two or three per cent swings are a lot more serious. The percentage volatility in the last couple of years has been less than it was historically."

The 1987 stock market crash saw the Dow stripped of 508 points to 1,738.42 in a single day -- a 23 per cent decline. The same loss now would spell only about a seven per cent drop.

The TSE 300's 90-point stumble Thursday shed 1.5 per cent off its total value.

Vronsky site review.
vronsky site Gold Eagle has two new articles which I would like to comment on. THe first labeled " ( GOLD BETWEEN $3,500 TO $8,400...? ) ". I would like ot second that. I totally believe we will see gold over $2000 and the range $3,500 to $8,400 is quit possible.

The second article is about the triple bottom. There is good reason to believe that the low is in place but I am not 100% convinved yet. It's going to take alot to get through $300 spot and there is a very good chance gold will go down one more time. For one the U.S. dollar and bond market are doing too good. Soon but not yet.

Platinum spot price...a leading indicator?
This is the 2nd day this week that Kitco has shown a substantially
higher spot price for platinum than for the futures. I asked for someone
to clue me in, as to why this occurred, but got no answer. Without the
benefit of knowing how or why, this would look to me like urgent buying
on the spot market. On 12/23 when this happened,it was followed the next
day by an $11 jump in the futures contracts.

@Mike Sheller
If Mike Sheller is in default on his VA insured mortgage there is no way for the government, under current law, to get the money to him so he can make the payment. The law requires that the house be sold, Mike & Pepi put out into the street, and the government owns the house.

In a "Total Collapse" ( plug for Steve Puetz ) it is likely that, as in the 30's, a new moratorium law will be passed that delays the process by several months. When the moratorium was passed in the 30's the government was sticking it to the banks. It didn't cost them anything. During this collapse the government will be the bag holder because most mortgages are now government insured. I would not be surprised to see the government become the owner of record for millions of properties, allowing Mike Sheller to stay as long as he pays his rent to the new landlord.

In effect we are set up for a formal adoption of the same system that the Russians just discarded.


A Crash Watch for Christmas Eve?

There is no doubt that this is seasonally abnormal; there's also
no doubt of what can happen if Japan breaks the key
levels ( basically 14,400 or so in the Nikkei ) and doesn't bounce
back immediately. Such an event would travel around the globe,
flattening Europe in all likelihood, then creaming New York
thereafter. Views of what the New Year might ring in:

Mike Sheller
Gold & Bonds
GLENN: Nearly every significant turn in the markets was preceded by Bonds, Stocks, AND Gold rising together. The gold bull often begins while bonds are still bulling. When bonds turn down, gold begins to accelerate. The signal of an approaching end to a paper bull is when all three asset classes - Bonds, Stox and Gold are making uptrends. The end of the paper bull is then months to a year or so away. Of course ANYTHING can happen, but it is a mistake to think that gold cannot get started while bonds are still in an uptrend. For all we know, Silver is telling us that without central bank manipulation of the gold market for obvious motives, gold WOULD be rising now, even along with bonds. I have always used the Utility Average as a "crystal ball." When they turn down, the general stock market cannot be far behind. I see important resistance for the Utes in the 280 and higher area. If they get through there in impressive style, then perhaps the deflation folks will be right on this cycle. But if the Utes stall at around 280ish, and then decline, the paper game may have reached its limit.

Donald_A @ 15:41
Right on Donald!
Take care to sell your horse before he dies.
The art of life is passing losses on.
( Robert Frost )

Vronsky $3500+ gold
This makes no sense to me. There are plenty of other assets in which to park money including:

base metal
Kyoto related air emission credits on greenhouse gases
rental properties and so on.
natural gas

Mike Sheller
Re your 15:55 - Pepi is growling.

You are naturally correct about the propensity of government to change laws when it suits itself, especially if the change "rectifies" one or more of its blunders. Usually the process involves stealing something from some citizen or other.

Deck Update...........and my aching BACK
Framing is 2/3 done----One more day ( not tomorrow ) and framing will be done and then just have to deck it ( 18 by 40 ) and build some new stairs~~
go team gold!!

Mike Sheller
Oh, and by the way, you would be amazed at all the benefits this Vietnam veteran was not eligible for because I was already educated and didn't see a need to sit around in class wasting time and money at guvmint expense. The one time I went to ask for a VA loan was to buy our apartment years ago. No can do GI. My present house is commercially financed, thank you, with no help from Sam. Nor would I ever request any.


- FRB Top-Dog Shares His Candid Opinion On Gold

- Greenspan: Still Going for the Gold

Once at the following website, scroll down until you see Mr. Greenspans bright-eyes peeping out at you, then CLICK him... where ever you like. IF you do NOT see Greenspans photo, RELOAD THE PAGE:

Re: Mike Sheller (Gold & Bonds)
I'm aware of that and keeping a close eye on things. Since I do believe that gold is going to $2,000 PLUS missing $20 may not be the end of the world. Right now I still believe one more time down or at least a retest.

July Inflation-Deflation-Bond Yield Forecast; only 7 of 55 "experts" got it right
Cherokee@We're all going down
We just disagree on the order. Let's do some simple comparisons on

Mexico vs---------------------- Canada

Inflation 30%----------------- 1-2%

unemployment 30%+--------------9.5%

budget deficit 7%+-------------surplus

The order will be Mexico, Canada then U.S.

BTW, thanks for correcting me on the spelling of xenophobia. Maybe I was thinking of the mystical tone of many of your postings...the zen-like nuances. Then again maybe I need spell checker.

Steady @ 12:24

Welcome to the inflation club! :- )

Ted, Ted, Ted!
You've got to get yourself one of them new-fangled pneumatic nailers! They're a blast! Literally! :- )

16 P nails go just as easy as 6Ps........... ( There's an added bonus to. If you get pissed at the neighbor... :- ) ) )

Canadian fund manager says deflation is not a problem
@ All.......Put options
just to add a shocking post Christmas comment, I'm contemplating PUT options of the S&P before the first...any recommendations on strike price and date?

To Cmax
Sorry for not answering your question earlier ( post of 07:55 ) . The situation of silver during a depression / deflation period is as following:

When industry slows down during a depression, the usage of silver is lower, and therefore demand for the metal minimal. Consequently, lower prices. Look what happened to silver during the great depression, IT CRASHED, where as gold almost doubled. Sorry I do not have a chart available at hand.

6pak re: your 15.38
Is'nt it interesting that they are all for free enterprise & capitalism until a ruling like this goes against them. Then they are'nt so keen. Reminds me of the Salmon treaty. I hope that Noranda are'nt planning on using any of those funds soon.

How Alan Greenspan saved the world last week
Mike Sheller
LGB: I guess you were reading my latest Astrological Investor Feature at Gold Eagle, and finally convinced that there are more things between Heaven and Earth than are dreamt of in your Horatio? ( :- )

Mike Sheller
Get Real...Get Gold! $2000 in 2000!

Great story. Greenspan and Rubin are financial super heros out saving the world. I'm still chuckling. The best is yet to come...



Interesting article, but one gets the feeling that Mr Margolis has never been in a Bush Fire. Should we substitute "US" for "Rothchilds" in the article. Life can get very uncomfortable when you are in the "woods" when the fire rages. A passing thought, who is going to bail out the US, if and when?

Aye, Haggis

Carl, Donald, JTF (in alpha order) Inflation or Deflation or...
With lamentable lack of conviction, I seem to bounce between the arguments presented by Carl and the arguments presented by Donald and the thoughtful conjectures of JTF.

It seems impossible to delineate a probable course because it is impossible to know the full extent of liabilities...Anyones liabilities! Everyones liabilities!

The game has been rigged for so long, and with such skill, that one can say--with some small degree of certitude--that major banks may well be unaware of the full extent of their IN-HOUSE liabilities. The Japanese banks, if compelled to announce mortgages in-arrears after two-years, are being held to a stricter standard than US banks, where strips are done, repackaged, linked to something else, and never need be reported as a loss, because of the clever packaging.

When some entity is allowed to fail, the good assets go to BANK A and the bad assets to bank b; it doesnt seem to be a problem, it appears to work very well. From this, do we conclude that bad assets represent nothing negative? Do we then agree that money doesnt matter, as long as it keeps moving?

Inflation is often defined in terms of too much money pursuing a more or less fixed amount of goods. Deflation is often defined as that point in time when cash ( i.e., not being in debt ) is the key to survival. Are either of these loose definitions applicable nowadays?

Is it too extreme to suggest that all of this is madness?
Is it too radical to suggest that terms like inflation and deflation belong to a past when words had generally accepted meanings and were used to convey abstract thought rather than obfuscate reality?

Government Bonds, Money and South-East Asia: The Great Deception

If we accept that government bonds and currencies are at best an illusion of wealth, and that stock markets trading at 5 times book value may be over-priced in view of falling profits and currency upheaval, then the only investment alternative is gold. Realizing this, governments have driven down the price of gold. In order for the world to continue to believe in the government promoted illusion, the price of gold must continue to fall. If the world were not on the edge of an economic collapse, the price of gold would not be so low. An analysis by John Kutyn:

Inflation or Deflation?
To gain some certainty on how deflation is absolutely impossible, study what it is that G7 does when they meet to set exchange rates. Has anyone here ever wondered what G7 does?

They agree as to exactly how much each currency will be allowed to rise or fall before central bank intervention takes place. Why is this important you might ask?

It is because we are currently living with double digit inflation. No one knows it because the INDICATORS of inflation i.e. PMs and currencies are carefully stabilized to present whatever picture stabilizes the markets.

How can anyone honestly claim that they know what inflation is. To make such a statement there must be a stable point of reference. Would that be gold? No way!

This inflation game has been going on for decades. If one currency suddenly increases or decreases in value in relation to other currencies, the G-7 central banks buy or sell accordingly to restore stability.

The reason our precious gold has been stomped on is because it is the most widely recognized and carefully watched INDICATOR of inflation. The current ratio of valuable product, commodity or service to paper is in the ratio of thousands to one and has been for decades.

There is absolutely nothing to back these currencies except confidence. Therefore, the game for the last 50 years has been that of maintaining and cultivating confidence. The dollar is pegged to NOTHING.

Deflation can only occur when there is strict adherance to sound monetary policy or supreme economic discipline such as a gold standard. We have been running the presses for 50 years now and the idea of deflation is laughable to anyone who has studied the economic history of this country.

Go back and study about what happened at Bretton Woods, look at the deficit over the years, explore the purpose and meaning of G-7 setting exchange rates, study the history of US economic policy. The public is woefully misinformed on this issue. We already have double digit inflation and grossly manipulated economic indicators.

The question is not: Will there be inflation? The question is: Will anyone find out about 50 years of inflationary practices? That question is rightfully directed to the people at this site.

Why now on the S&P puts? I'm not critical here, my own models have too many loose ends to take any position so time sensitive. Right now I haven't figured out how much the reduction of capital gains rates will buoy the market. Remember how the tax changes of the mid-80's tanked real estate? When it stopped being a shelter for most investors, it took 8-10 years for it to get back to the same place. Now with the capital gains rate cut I'm seeing otherwise conservative investors taking small positions long.

This might be the ultimate selling out of the market to the little guy by the professionals, but then I thought I saw that in 94 - and I was early then. Still long, myself, but have reduced my positions several times as the market kept going up. Continuing to do so.

What I'm looking for is a reason to take a leveraged position. Just itching to place a bet. Oughta go to Vegas for a week. Easier to call a broker.

Philippines and Marcos................

G'Day from Kalgoorlie.

Last June I did a technical review of a gold mining operation in Mindanao , a southern island in the Philippines. It was an interesting 4 day exercise. Two years ago the mine made US$ 100 million profit, last year US$ 20 million, and this year not a brass nickel. "What have we done wrong?" was the question from the owners, the reply essentially "you have mined out your existing reserves and failed to advance your exploration for re-establish resources and reserves". What struck me about this particular mine in that particular location was that ZERO cash, apart from minimal wages, was put back into local infrastructure and facilities, either locally or elsewhere. Added to that we had a song and dance act concerning our professional fees, STILL waiting to get paid, six months later.

If this is a relevant example of doing business in SE ASia, the question is then raised - why should there be a sustained effort to "b

Feb. Gold
A possible path for the Feb Gold contract over the next several weeks is beginning to reveal itself. For those following this trade you should move your stop up from the breakeven price of 284.8 to 288.00. Sometime next week Feb. Gold should trade into the 305 -306 area, this would be a wave 3 high followed by a correction of approximately $10. After that a wave 5 advance into the low 320's will end this leg up no later than early Feb.. Sell your position anytime the GCG8 is above 320. There is resistance on the daily, weekly and monthly charts in the 320 area. From this area a correction in the first quarter of 98 will occur that may retrace this entire leg up. What 's important here is how the XAU reacts during this correction. If it can hold up giving back no more than 10% of it's value while gold is testing it's lows we would be assured of a bottom. There will be a correction and a test of the lows in the 1st qt. 1998, how it unfolds in relation to the XAU is what I'll be looking for.

Philippines and Marcos................

G'Day from Kalgoorlie.

Last June I did a technical review of a gold mining operation in Mindanao , a southern island in the Philippines. It was an interesting 4 day exercise. Two years ago the mine made US$ 100 million profit, last year US$ 20 million, and this year not a brass nickel. "What have we done wrong?" was the question from the owners, the reply essentially "you have mined out your existing reserves and failed to advance your exploration for re-establish resources and reserves". What struck me about this particular mine in that particular location was that ZERO cash, apart from minimal wages, was put back into local infrastructure and facilities, either locally or elsewhere. Added to that we had a song and dance act concerning our professional fees, STILL waiting to get paid, six months later. If this is a relevant example of doing business in SE ASia, the question is then raised - why should there be a sustained effort to "bail" them out, and if so to what end result.

The posting by DONALD_A concerning the Asian Banks "stashing" the incoming rescue funds and not sorting the problem is important. Local infrastructure and businesses may not be rescued. One still finds World War II bomb sites in central Manila.
Aye Haggis

I agree, the definition of inflation is an increase in the amount of currency. If you watch CNBC almost everyday it says ( x ) ADDED LIQUIDITY. and Lawrence Lindsey former Fed Governor said last week that the Japanese have been increasing their money supply by one percent per day for 3 weeks.
There certainly is inflation where I live in Connecticut, I pay the bills and my pay does not go as far as it used to.

Advice on the last $1000???
Would anybody have thoughts ( not "advice" per s.e.c. regs ) on how to spend the last $1000 one has allotted for PM stocks this winter? The only two absolutes are 1 ) I'm not going to spend it on the lottery, 2 ) I'm tired of buying SSC ( so tired I'm thinking about changing my handle ) . And bear in mind my broker doesn't deal in anything but securities available on US exchanges.

We would not be bailing out asia, only the foreign banks and speculators would get their investments back, probably with interest. This is what the Brady Bonds were all about. This is the same old story of putting the debt on the public.


you left out the debt that has accumulated over the years....
this is the crux of the flux....movin to montana soon, gonna
be a dental floss tycoon......fz ( in ) appa.....
this is where the problem lies. the current policies are acceptable
and probably prudent, to a degree.

how many years will it take to pay-off the deficit using the current
surplus as an average??

this is an eye opener.

the policies needed to effectively deal with the debt are constrictive
and non-sustainable.

yes, we do agree.......time is short, and we all are in deep sh!t.

please, no zin------ss's will do quite nicely

big week ahead..........paper goin down.....big..

da, eb----what is the deal with pl?? is it in backwardazation?

cherokee! ) ----looking-for-the-big-bear------again---

Mr. Mick
Donald, oh Donald...........
Please, your comments on Shultz's 18:20? Thanks.

I would take a chance on Royal Oak Gold, a 60 year old company with good management that has been beaten down by lower gold prices. It has closed some mines to conserve cash and is in the late stages of opening the Kemiss mine in april. This mine will have a cash cost of $79 oz after a $1 allowence for copper and will yield 250,000 oz per year for at least 16 years. Total market capitalization at this price is only about $200 milllion. The mine is to open in apri and everything is on time. It is selling for $1.9/16 today up from 15/16 3 weeks ago and down from about 4 a year or so ago. This mine will keep them successful even if gold goes considerable lower. Good Luck

Schultz--I had written, but did not post, the following in the inflation/deflation
Might it be suggested that we have lived with inflation for sixty years? My newly married parents bought their first home, in a nice area, for $3,000 and were solvent enough to obtain a FIVE YEAR loan. My grandfather regaled with tales of fabulous meals at wonderful restaurants for $2.00 ( including a bottle of good French wine ) . A new house used to cost what one now pays for a modest car.
Tuition at an ivy league university now amounts to what a physician earned per annum a score of years ago. Inflation has grown on us
like kazoo...

Re: Folly,Frenzy,Fear Index--FFF I ( with thanks to Sharefin--
Believe we are smack dab in the middle of Frenzy. Wednesday's FT ( delivered today of course ) has the first tombstone:
Wishes to Announce that
We Have No Connection Whatsoever With The
"First Merchant Bank Limited"
against whom the Bank of England have recently taken legal proceedings.
First Merchant Bank ( OSH ) Limited
25 Serif Arzik Street, Nicosia, Lefkosa,
N. Cyprus, Mersin 10, Turkey

Is this worth a 2 basis point value? Or only 1 basis point?



The Asian "bailout" is to be focused through Banks, I assume selected banks with off spins to their proxy "speculators" - if so which ones. Looks like a case of robbing Peter to pay Paul.

One issue that interests me, is the off spin of gold derivatives/futures from Central Banks to proxy Commercial Banks/Brokers. In the US, by law, is there required to be in existance a clear demarkation between a Central Bank and a Commercial Bank/Broker in theory, and if so how does this work in practice. The idea of the FED printing funds for "Peter and Paul" is rather questionable, especially if, at the end of the day, it ends up back with the FED. Under this system, there is no end result.

Aye, Haggis

Donald, Margolis genuflects to Greenspan
I enjoy your captions as much as the news stories!
It rather reminds me of Jack Valenti sleeping better at night because LBJ was at the helm.

@Mr. Mick, Schultz
Schultz: you are describing the past and the present and what you say is true about those timeframes. Deflation is the future. Things that have been purchased during the inflationary past and present, using funds provided by irresponsible lenders, will all drop in price. I am talking about homes, second homes, campers, office buildings, shopping malls, jetliners, computers, cars, trucks, factories etc. The credit used to buy those things is about to vanish. The jobs associated with the construction and manufacture of those products will also vanish. Service businesses that supported those industries will have less to do.

Everything I listed is in surplus. Last week Toyota closed a plant in the Philippines. Hyundai stopped a new plant under construction in Thailand. Boeing had orders cancelled. Kodak laid off 12,000. In Switzerland 13,000 bankers heard of layoff plans. Migrant workers in Korea are returning home at the rate of 2,000 per day. In China layoff notices were given to 2,000,000 workers. It is just beginning. Where are the customers going to get money to buy products? Where are the savings to provide the credit? In the U.S. 1,300,000 families declared bankruptcy during 1997. Mutual funds lost $9.47 billion last week. That is money that will never be spent. More will follow. I can go on and on. Read my posts. Each one is an individual tragedy. Collectively they are a world tragedy. Each is a deflationary nail in the economic coffin.

Haggis_A: Old buddy I found this especially for you. A Christmas present from GOLD-EAGLE ( :- ) ) - ENJOY:

SDRer would you send me your E-Mail address, I have a question for you.


ITS FUNNY BECAUSE WHEN I WANT TO SELL SOMETHING THE PRICE GOES DOWN BUT WHEN I WANT TO BUY SOMETHING THE PRICE IS GOING UP, ONE WAY OR ANOTHER. Inflation will be the problem of the common man and deflation will be the blessing of the wealthy. My health insurance went up 10% this week my water bill has been going up,these are things that effect my way of life but are mere incindentals to the wealthy.

Bill G
Aye, Haggis

The Downsizing Snowball; first Kodak; then Rochester govt; Then NY State govt.
DigDeep: re RYO Thanks, I'll look into it. If you had the choice between it and TVX, say, what would be the relative advantages of each?

Anybody else? Don't be shy. This is just a gedanken experiment and I promise I won't accuse anybody on this forum of advising me. I don't take investment advice anyway ( preferring to hide away in my cave and crunch the numbers myself on my own abacus ) but am just interested to see if there are any good, fairly valued rocks I haven't already turned over.

SDRer, Donald and JFT and Inflation/deflation
I have no doubt that Donald has the right end game. My uncertainty is about how the end of the middle game ( where I think we are ) will play. I think politics, power and stupidity could produce many variations. We have seen many inflations - paper in Japan, property in many places, and the giant of modern times: paper in the US. This can not stand for the simple reason that in the end it is return on capital which determines how much an investment is worth. And just as for example farm land, when people bid up an asset class beyond its ability to return a profit, it will eventually return to its true value.

Its plausible to me that the dangers inherent in a world wide collapse of the paper money system will be fought tooth and nail by the Fed. And that they will encourage reserve banks and governments around the world to stimulate fiscally and monetarily. If they wait too long, it will be like pushing on a string. People will not borrow for productive purpose, only speculative ones. Consumers are the heart of the major economies. It wouldn't surprise me to see tax decrease proposals, consumer debt interest rate controls,large "critically needed" public spending on infrastructure to employ the unemployable and God only knows what else to stimulate demand for goods produced by troubled economies around the world. What would this do? Here in the US, there would be an increased bidding war for stable work forces among large retailers. Large businesses who have spent the last few years buying market share would shift their attention to buying pools of workers. Food products, which already are mostly priced to reflect "value added" by processing and distribution would start to move in a way not seen for generations. The cost of housing would increasingly be made up of maintenance. You might find it easy to own your home, but you better be able to fix it and everything in it.

As I said, Donald has the right end game, but I'm not sure his timing is right. Governments and powerful interests aren't going to go down while they have cards to play. A question I ask on this forum months ago was How much pain will Greenspan allow? I think it has yet to be answered.

It seems to me that with all their OS gold loans that CBs would not want gold to go lower as such could cause defaults on their loans. Also as the focus switches to deflation then to abate panic re this issue they would want gold to rise. Thoughts!!

Haggis A
You asked yesterday if I had more info on the amount of world derivitives. I will quote a paragraph from Leo Hood's Oct. 27, 1997 Ripplies in the Wave newsletter: "Perhaps it's an historical irony that the Nobel Prize for Economics was awarded to Robert Morton and Myron Scholes, who, along with Fisher Black developed a sophisicated mathematical formula for valuing options nearly 25 years ago. It is this staistical tool which has been given credit for allowing the global derivitives market to mushroom to an estimated ( 60 trillion - he left out three 0's in his letter from what I have seen in the past ) of notional value according to the Bank of International Settlements." On the amount - 60 billion which he shows in this letter is not reasonable and I have seen the 60 trillion elsewhere as the estimate. I am assuming his figure in the letter was a typo.

I recently sold TVX only because I heard they were having problems with a mine in Greece. The public was protesting ( actively ) and the way things have been it was enough to make me chicken.

223 -- Anyone who has been holding gold stocks for the last year or more is hurting. That being said ( yes, I'm in that club! ) take a look at Agnico Eagle Mines ( AEM ) . Some other good plays at this price ( Making a big assumption about the rise in the dollar price of gold here.. ) Getchell Gold ( GGO ) and Newmont Gold Corp. ( NGC ) . GGO or possibly AEM could be a take over play. No, I don't have any information on my SPECULATION, but at these gold prices, he who has cash can go shopping. What better way to grow your reserves than to buy low cost producers?

The timing is as much a matter of psychology as economics. Every day I hear or read about the inability of companies to find good workers. Two weeks ago I kept hearing that "the fundamentals are sound" in Asia. That phrase is now gone from the lexicon. The economics did not change; only the psychology.

A few more down days like October 27th and I will bet you a Silver Dollar that I won't hear another story about the worker shortage either.

Carl, Donald, JTF--I think we'll have both, compounded misery , in uneven helpings
Donald, your argument --Deflation--is compelling, but...

Moslers Soft Economics puts forward the idea ( among other things ) that government has it within its power, through the virtue of fiat money, to guarantee full employment and enough money for everyone to have at least lifes basics. It would appear, on some days, from some viewing points, as if Mosler back-engineered from his watching post as a trader. Are we well along Moslers path? When one looks behind the governments statistics, it is possible to construct Moslers case; it is not an airtight construct, but it is there--and it is scary...
on the other hand, it is a solution of sorts, if you are one of the power brokers, whose first priority is maintaining the power base. If money is printed and hoovered up in the correct proporations...>


RYO under $2.00/share looks to me like a good bet.
You may want to check out Silicon Investor Site,
type stock symbol- "RYO" and see RYO thread full of
opinions and data. RYO may die if gold goes below
$250, but if gold goes above $375, you will double
your money. It's a very speculative stock, also
very fast moving and very sensative to POG.

Just curious, 223 - any connection to M-16 ( AR-15 ) ?

Schultz -- Welcome to the inflation club. :- )

Our 'money' has been tied to nothing except some vague promis to pay in FRNs for a long time now. Got a credit crunch? Create some more FRNs.

Here I thought that I was all alone in this club. :- ) )

Farfel Responds Re: How Alan Greenspan Saved the World....
Dec. 26, 1997

Dear Eric:

"Many Asian leaders should get down on their knees and thank
the U.S. government for pulling their lichee nuts out of the fire."

In that one statement, you provide substantive proof of both your own
financial imperialism and overt racism. Gee, Eric, while you were
talking about lichee nuts, you forgot to throw in a cute taunt about
chinese laundries...or how about a quip about slanty eyes? Hey, and
while the Asians are down on their knees, do you want them to give you
one collective blow job...or will a perfunctory kiss on your little
peckerhead suffice?

The only reason America "has come to Asia's aid" is in its own
self-serving interest. There is not one scintilla of altruism behind
America's efforts. America is well aware that a cold in Asia can lead
to pneumonia in America.

But do not be too smug, Eric...the verdict is still not in as to whether
you're friends, Greenspan and Rubin, have saved anything yet.

Stay Tuned.

Very Truly,


You could buy 500 shares of Metallica ( METLF ) . Unfortunately you could have bought close to 1000 shares two weeks ago. You might want to do some DD on it and watch for a pullback. It still has legs but dependent on pos and pog as all the miners will be.

FWIW, Robert Drach on the NBR made mention of the Asian bailouts. To paraphrase him, he said that you have to wonder, are we going to bail EVERYONE out?

If the market place was left alone, a deflation would have occured long time ago. One must realize that deflation is political suicide and will be avoided by governments at all costs.

When gold hit 340 in Sept RYO hit US 3 1/6. I think with Kemess coming on it could hit that again at gold 325 at which price all operating mines would be profitable.

Interesting that this weeks sentiment readings went from 16%
Bulls on Gold to 23%. Shockingly the bulls on Silver fell from 45% to 24% a near record low. The rally in Silver appears to have few believers. The source of these numbers is Paine Webber research weekly published sentiment indicators derived from newsletters. Thoughts.

No bet. I have too much respect for both you and my silver to risk one against the other.

@Digdeep -- 223
During the past little run up in the gold and silver price,TVX has gone
from it's low of $3.20, to $4.75. This stock in my opinion is one of the best bargains out there. I believe their problems in Greece are now pretty well
over with. Their stock always trades on a high volume. JUST MY

I have heard from some pretty smart people that the eventual bailout figure could exceed $2 trillion and that is too much for EU and America. I believe that money will be given in the early stages to pay back cronies and then it will become politically impossible to go futher. The focus will then be to put pressure on asian competators to occidentals and put them out of business. Since the development of cheap synthetic rubber asia is no longer of significant strategic importance to the West as a source of natural resources, and their markets are effectively closed to occidental finished goods. So we have no economic or stratigic interest to protect them from their folly. Remember Korea is a competator to many of our businesses.

Haggis...any thoughts about PEGASUS?
It seems the closure of Mt. Todd in Australia scared the crap out of all the investors. Yet, it is a genuine ( albeit high cost ) producer. Is it headed straight for the dumpster or is there any life in the old corpse?

At 5/8 of a dollar, it seems like it's the cheapest medium gold producer out there.

You're the Australia gold tell me, is it worth a look?

Steve - Perth
Steves specially edited: NEWS VIA AUSTRALIA

Reproducing the 1930s

Japanese Banks not out of the woods

Nikkei still dogged by bankruptcy worries

How Alan Greenspan saved the world

Excellent observation by Donald!
Date: Fri Dec 26 1997 15:41 Donald__A:
Banks in Japan are only now being forced to acknowledge that mortgage payments are not current. I understand that Japanese law allows 2 years of non-payment before the official acknowledgement is made. Most are over that point now and the government just winked at it. Now default by borrowers will be officially declared.

The collateral associated with the defaulted loans must be liquidated. In the case of Japan that amounts to many, many trillions of yen worth of real estate that must be sold to the highest bidder. The new owners will be bidding into a falling market as thousands of properties must be liquidated simultaneously. All properties, even those not being sold, will be marked to market. Thus even those owners who might now be current with mortgage payments could decide to walk away from properties which are falling in value. They are not going to pay for a dead horse. That is the way a downward deflationary spiral works.


( See, nothing to worry about! Or is there? )


Korean won's slide triggers new crisis

Homestake raid on Plutonic sparks a gold rush

Millennium bug is Asian time bomb

Won tumbles after debt rating downgrade

De Beers wants Argyle in cartel

$986m US raid by Homestake on WA Gold mines

INDONESIA - Groundswell starts growing into a political earthquake

Mid Level Officials lobbying for Chinese Devaluation!

The biggest financial meltdown we have seen in our lifetime

Change in sentiment puts shine into gold

The penny starts to drop in the US

Anxious IMF seeks more cash

NZ voters are wary of M.A.I. free-trade treaty

Red alert for Korea's banks - Korea is in DEEP TROUBLE NOW!

Too many eggs in an Asian basket case
No more Letters of Credit for Korean Manufacturers!!!!!!!!!!

ASIA'S NEXT CASUALTY? Bad banks could clobber China

Whistling past the graveyard in Asia

Billion-dollar buyouts lead attack on bankruptcy
Korean Shipbuilding Group had 20 times debt to equity!

BOOKMARK Steves News Page:
( Courtesy of Colin Seymour )

TVX closed at 3.3/16 today, your right it may now be a good buy again, its 52 week high was 9

Vronsky..........and Haggis


I am glad to see that my North American Kitcoites are now adding some culture to their life.

You have, however, got THAT Haggis mixed up with the OTHER Haggis - the one that runs around hills, with one leg shorter than the other. A common gaming sport in Scotland.

I am sure that jOHN dISNEY will only be too happy to recite Robert Burns "Address to a Haggis". jOHN, in case you have forgottem, I will help you with the first verse........

"Fair fa' your honest, sonsie face,

Great chieftain o' the puddin-race!

Aboon them a' ye tak your place,

Painch, tripe, or thairm:

Weel are ye wordy of a grace,

As lang's my arm.


Carry on jOHN - sounds like a movie.

Aye, Haggis

Please repost, Item Not Found

Sorry, I was using that almost worthless Canadian funny money for the
stock price. Further I would almost bet my first born that $330 Gold---
TVX at least double it's current price.

I like RYO, and I am watching it very closely.
You are probably right, but I prefer not to be very
optimistic, hoping for best but ready for worst...

If Kemess is what RYO says it is, and POG is $325+,
this stock should be a winner.

What I also like about RYO ( aasuming POG is not going
to crash ) that it may be both short-term and long term

My only concern at this time is POG.

Panda........and Pneumatic nailers
Panda: Am too set in my ways and ole-fashioned fer them things and besides I like beating the sh!t out of nails ( keeps me sane ( ? ) ) .....

James @ 17:02
You use the terms " free enterprise & capitalism" maybe these terms are also outdated, when used in todays description of the economic reality of 1997. Words that had meaning only during the Cold War.

Noranda, is in on the game, blame outsiders for the destruction of a nations park land, yet, the purpose of the game, is a push by USofA corporate interests, to use park land, as the GOLD of the USofA is being loaned, so will the park land of the USofA be loaned, to gain an interest payment on land, that from an economic point of view, is not paying for itself.

Gold is not paying for its storage fees, so the government via Federal Reserve Bank interests, are loaning the GOLD.Park land is also being loaned, ALL, is, as it should be, Business taking care of business.

Corporate Business, is using Noranda, to test the USofA government. The issue is a done deal. Compromise will be the order of the resolve. The issue, assisted a President of the USofA to look good, and supported his re-election. Now it is time to get back to Corporate business.

New game plan, is to suggest the small investor, ( mom & pop ) must be protected, and the tax payer ( workers ) must be protected. Government must open up park land, to protect small business. ( mom & pop )

Also, SDRer_A @ 17:56, puts forth the question "are either of these loose definitions applicable nowadays" when describing Inflation & Deflation.

Hell, the person with the gold, makes the rules. We are the problem, we believe the B.S. that is feed to each of us. We are MUSHROOMS, the vested interests, feed us horse shit, and keep us in the dark.

Take Care.

The GIANTS will prevail tomorrow
and send the 'Vikes' packin~~~~~~~~~~~~~~~~go team gold!

farfel, it's a funny thing you asked that!............Pegasus
G'Day from Kalgoorlie in Western Australia.

Let me first start with Pegasus - Intermin Resource Corporation JV, 5 kilometres from Kalgoorlie. Pegasus paid AU$ 5 million for 19.9% equity of Intermin, with a two year option to go to 51% on payment of AU$34 million exercisable by 26 August 1998. The Binduli North project is VERY GOOD, with a pre-resource mineralisation of 2 to 3 million ounces of gold, with upside. I know this project very well!! Get the drift.
Pegasus Gold Australia Pty Ltd have filed for voluntary administration in Australia, based upon a feasibility-operations stuff up at Mt Todd, and severe over capitalisation of that project. They are AT RISK of defaulting on US$353 million - MR WERNER NENNECKER WHAT WERE YOU THINKING ABOUT ( it's important to keep your feet on the ground, and not in a Lear Jet ) .
Pegasus Gold Inc ( USA ) , for the 9 months ended 9/97 had sales of US$177.1M, and the net loss rose from AU$9M to AU$436. A US$396.8M write down is UNACCEPTABLE.

farfel, even if they sold ALL of their assets, they would still owe the order of US$2.50 a share, which is not bad going when your share is only worth US$0.5. NOT A GOOD IDEA TO BUY!!

Is Nennecker still with Pegasus??

Aye Haggis

The "run on the mutual funds" intensified this week. If I heard the AMG numbers on CNBC correctly. Forced sales by mutual fund managers will follow shortly. I believe the number for last week were over $9 billion of net redemptions. That was preceded by redemptions of $1 billion and $2 billion in the prior two weeks. The nervousness, impatience, and selling is grow with each passing week. THe BIG panic is not too far away.

The Mosler site is giving me an "access denied" message. But let me respond to this snippet from your post.

"that government has it within its power, through the virtue of fiat money, to guarantee full employment and enough money for everyone to have at least lifes basics."

If that is true why doesn't Korea, Thailand, Indonesia and Malaysia just print money? Why are they asking for help? The statement is absurd. Russia, with central planning, no bother of a congress to complain or a presidential veto; total control over every aspect of the economy, could not do it. Russia ate the seed corn of the Czars. When that was gone they had to loot eastern Europe to replenish. When that was gone it was all over. It is still over except for IMF help and stupid seed capital from ignorant investors. It will all be lost. The solution is so simple. Initiate convertible gold backed money and two years from now Russia will be on the way to being a powerhouse again. It has every natural resource
known to man; only government stands in the way.

People don't want "just the basics"; nor should they. We had that during the Dark Ages. The ultimate example of a governmental monetary failure in the history of the world. It wasn't much fun. Not a single gold coin was minted in Europe for four hundred years. As Mr. Manchester says; A World Lit Only by Fire. How could it be otherwise.

Millennium Bug.............don't travel at midnight


One consequence of the Millennium Bug is that aeroplanes may not function as aeroplanes, but as ROCKS. Gravity is a wonderful thing?!

Aye, Haggis

Myrmidon: If the markets were left alone, deflation would have ocurred a long time ago. That is true, but it does not imply that deflation won't happen. The facts are:

1 ) Any inflation ALWAYS ends with deflation.

2 ) The bigger then inflation, the greater the subsequent deflation.

The only thing government inflation attemps have done is to prolong the inflation -- thus making the coming deflation unbelievably large. The deflation will be far greater than the one in the 1930s. In fact, I believe it will be a TOTAL COLLAPSE of the US Government and our entire economy -- similar to the collapse of the Roman Empire 2000 years ago.

U.S. stock fund inflows fall 75%

eya----next week, for the stock-bull has peaked....

eya-cherokee, eya....

Well, Japan did not dump on Christmas day, gold did not break $300, the metals weakened today. Is this the reason why this site is so quite today?

For the preceding reasons, you will want to convert virtually all of your assets into gold and silver coins. They will retain, and even increase their purchasing power. The owners of gold and silver will be the leaders of the next form of US government.

Silver is already beginning to show the way. Gold will soon follow. The gold-silver ratio will come back toward the range of between 16-to-1 and 10-to-1 that have ruled for many centuries. The precious metals will once again emerge as the only true monies. Paper assets will crumble in value -- losing all credibility. US Bonds will be defaulted on.

Steve Puetz- If inflation then deflation and I hope that is the way it plays out. Then make the money on inflation and buy the place ON SALE
durin deflation. Now that is what you call passin them in the curve.
[race car driver talk]

Tally Ho

Donald @ 21:23 -- That is the answer in the end. Honest money. As the Founding Fathers said, government is a necessary EVIL.

Donald: I just read your posting from earlier today. It confirmed the $9 billion of mutual fund redemptions last week. That's the largest 1-week level of redemptions in history. The out-flow is rapidly reaching panic proportions.

One small differnce of opinion with you: I agree with your deflationary arguments. Rather than psychology, I have identified the psychological component necessary to keep a financial-bubble intact is CONFIDENCE. Once confidence breaks, the bubble bursts almost instantaneously.

Haggis...thanks for the info. Your pessimism confirms that Pegasus
is probably worth picking up 100,000 shares or better. I determined there are effectively no bond holders or preferred share holders. Hence, Pegasus need only make an accomodation with their banks ( which is more than likely, otherwise the banks end up with a pile of dirt ) .

Assuming gold bounces upward over the next month ( 320 or better ) , then vulture investors ( already fully invested ) should be able to pop the stock up to $2.00, at worst...maybe as high as $3.00. Over 300% return on a stock ain't too shabby.

Whooops! I meant 21:35...

Here is a chart of the spread between the long bond and ninety day money. The values are in basis points ( 1 basis point = .01% i.e. 100BP = 1% )

Currently, the combined reserves of all the world's central banks total 35,000 tons. At $300 pto this reserve asset has a valuation of less than $340 billion. To put this into context, all central bank gold reserves have a combined market value of less than 10% of the US government debt. With the exception of bullion, all central bank reserves are some nation's debt, probably the US,Germany,Japan, UK or France. However, all these countries have very significant official debt obligations that represent conservatively between 10 and 50% of their GDP .In addition, their underfunded future pension obligations represent an unofficial debt of between 1 and 3 times their GDP. Therefore, if these debts were corporate obligations, they would be deemed JUNK BONDS.Futher, the asian currency and banking crises is currently causing: a. ) deflation in the US via lower sales prices on imports to America and eventually a significant expansion of the money supply by the Federal Reserve to try to jump start a faltering economy. b. ) inflation in the cost of living, deflation of capital assets and continuing currency depreciations in asia. c. ) and will eventually cause the collapse of the Japanese and most other tiger banking systems. THIS WILL RESULT IN A WEAKENED GLOBAL FINANCIAL SYSTEM AND A REQUIREMENT THAT CENTRAL BANKS HOLDINGS OF GOLD BE MAINTAINED AT CURRENT LEVELS. SOON PUBLIC CONFIDENCE IN GOVERNMENT SCRIP WILL BE SERERLY TESTED.

@ Puetz on deflation
I agree 100%. I thought that the time had come ( the crash ) in 1973. But the governments pulled it out. Ever since, I realized the power they have and quit predicting when it will happen.

It can happen tommorow or 10 years down the road. I kick myself for having lost some good market returns, but again, that is life. One day it will happen and nobody knows when. There are no experts to tell us. Even the hard core gold bugs have now thrown the towel and tell us "gold is in a bear market"!!! - Something we don't already know. By the way, I read James Dines letter today and found his discovery astonishing!

And gold could stay there ( between $270 - $320 ) for another 10 years.

We should all have hedged for the good times too! I maintain my gold stocks position, but future funds will be going for the good times - just in case this goes on for another 15 years.

Mutual Fund Redemptions
Remember some funds borrow money to pay redemptions, not too smart !

Vronsky: You're probably too bearish by only expecting gold to rise to $8,000 per ounce at its highest possible level. The US Dollar and paper-assets will collapse to virtual worthlessness. Based on current global credit-supplies, a gold price of $30,000 or higher is a distinct possibility if our economy has a "Total Collapse".

Yield Curve
What can one conclude from the yield curve? I know! There will be no inflation ever again. :- ) )

Why would anyone tie up money for years to get a FEW tens of basis points more interest? Nop, somethings got to change. Either short rates fall or long rates rise.

Cherokee_A @ 12:38
Yes, your reference as noted, is well taken. The down side of the reference is the pain factor. Failures, go on and on and on, something, or some one, designed the failure system to test, and keep on testing, eh!

Your reference:
"an old saying-------'a successful man is measured by the number of his failures."

I understand. Failure is a mark of those that accepted a challenge. " A man that does nothing, makes no mistakes"

I appreciate your comments. Thanks, Take Care.

@ DigDeep
We know this will happen. Any idea when?

Myrmidon: Anytime you can buy gold under $1,000 / ounce and silver for less than $50 / ounce -- you have got yourself a bargain! That's why we shouldn't be worrying about where gold makes its final low, and why we shouldn't be worrying that we didn't buy silver at $3.50 because it's now $6.35. They are both tremendous bargains at present levels.

yield curve
Panda The Fed is in a box, with 30 yr paper not far from Fed Funds rate. They may have to lower rate so as not to have an inverted curve. Yet they need to keep the sales going strong because of increased amount of debt to be refinanced. The asian crises is playing out well for the time being , as Bonds are a flight to safety for some. Last week the 2yr was yielding less than the 3yr, always if continues a sign of recession.

@Haggis and flying at midnight 1999-2000
Haggis, some six months ago I made a post about flying around the end of 1999 and crossing into the new century. Airplanes will be functioning as safe as they function today ( meaning some will malfunction but not due to Y2K bug ) . However, the ground support is questionable. For this reason some major airlines talk about suspending some flights ( though not to all destination, but selectively based on confidence how good/bad support they may get on a specific rout and from specific countries, traffic control, and airports ) .

I dont plan to fly either. Anyway, where would I fly?  though, I may sail ;- )

The Hatt
Donald_A re: Deflation
I could not agree more with you in regards to deflation. We entered a
deflationary cycle long ago and few have noticed! In Canada I have been
saying for months that although reports heralded growth, the feeling in
the market place was something is wrong. While the Goverment of Canada
spoke of balanced budgets, low interest rates and their favorite subject
LOW INFLATION, the average Canadian continued to live paycheque to
paycheque! The giveaway to me was first noticed in the Real Estate sales
where dispite the lowest interest rates in thirty years, sales were flat
at best. When rates no longer create incremental business, it just means
the consumer who at best is payment driven cannot add to his or her debt
load. This week the big three auto makers announced 0% finance rates for
up to four years, you cannot get any lower than 0 so where do they go
from here. The answer is obvious, if they cannot sell their autos at 0%
then the only alternative is to cut prices. Others would argue that they
may cut production first and who could blame them with the expectation
of Imports in 1998 offerred at discount pricing as a direct result of
the currency crisis.
I view the artificially low interest rate program as being similar to the
suckers rally in the markets. Hype the low rates and the consumer begins
to spend his way into Bankruptcy which by the way we hit an all time
record for in 1997. So Donald, when I read your comments on Deflation it
only makes the cycle more and more clear to me and that is there is no
question of inflation versus deflation as we have already entered an
obvious cycle of Defation.

No, I dont know when. Remember I am a goldbug and therefore have not been too good at timeing. However Lyndon Larouch, who predicted back in Feb. that the asian currency market would explode in Oct. ( he was right on the money ) says the collapse could happen as early as Feb. 98

@ Puetz
Why not $100,000 /oz? You said that in the event of total collapse the $ will become worthless, therefore the price of gold should be infinite!

It might be worth waiting for after all...

On Mosler. I perused that stuff a few days ago. The thesis seemed to be that government created money by fiat, but that's not enough. They then tax in that currency forcing people to acquire and use the currency. His idea is that taxes increase the economic activity and the fiat system then keeps supplying the necessary paper to feed to the economy. The analogy is to a token economy where, for example, you create chits to give out to your children and then require them to pay you certain amounts from what they earn by doing your bidding. The whole outlook ( to me ) lays bare the control motives of those doing the "tokens".

Monkee Person
Russia to continue purchasing gold.

The Bank of Russia said on this week its

reserves of foreign currency and gold fell to

US$16.809 billion on December 1 from about

$22.916 billion a month earlier as it spent cash to

prop up the rouble and the debt market.

"The hardest phase of the last and the coming

year we have already endured," Bank of Russia

chairman Sergei Dubinin said. "I don't think we

will see anything like a currency crisis in the near


The bank held about $4.609 billion in gold as of

December 1, according to the central bank's

website - up from $4.04 billion at the start of the

year and $4.467 billion on November 1.

The Bank of Russia values its gold at $300 an

ounce. The spot price of gold was earlier at


The bank has maintained a steady policy of

buying gold on the domestic market this year and

Mr Dubinin had said it expected to keep buying


Right now, however, it might decide to defer

purchases simply because it had nowhere to put

the metal.

The bank was expected to stop buying gold from

Russian banks until January 9 because its

warehouses were stuffed with the banknotes it

would introduce on January 1, Commersant Daily


Fractional Banking
Remember that banks can lend out about $9000 for every $1000 they actually take in because of low reserve requirements. Therefore, if you borrow to buy a house, you must repay with real money, that which was made out of thin air. ( IMPOSSIBLE ) .

@Mister Myrmidon (I like that name, it just kind of rolllls off the tounge.)

Myrmidon said: When industry slows down during a
depression, the usage of silver is lower, and therefore
demand for the metal minimal. Consequently, lower
prices. Look what happened to silver during the great
depression, IT CRASHED, where as gold almost
doubled. Sorry I do not have a chart available at

Thanks for the reply, Mr. Mirmidon. Your
observation of silver crashing in the depression is
very interesting. Frankly, I have never ( EVER ) even
looked twice at silver until now. Does anyone have
date on the gold/silver ratios during the
depression....and better yet.....from 1925 to today??
That would make some interesting reading.

Silver history notwithstanding, my thoughts are that
silver must fly with gold during a depression, for the
simple reason that I see it as the only publicly
accessable form of real currency in the event of a
currency ( US dollar ) crash. Forget its commercial
value, it still could be used to buy a loaf of bread.
How many are willing to take a nick out of their
Maple to buy groceries?? At that point, gold would
be changed for large amounts of silver, and it would
be the silver making daily purchases. Also, I think
this ( upcoming ) crash will be far different than 29.
It seems to me that the net effect of all these
uncontrolled digi-currencies MUST result in a
hyper-inflation a la Germany 1930s.....not deflation a
la US 1930s.

As long as there IS a reserve fiat scurrency to run to,
the waltz is not over. But as the US$, the last world
reserve currency, runs out of out.
Dem are hyper-inflation words.

Still.....silver/gold ratio history chart would be VERY
interesting................... ( Donald? )

I think this would be a very pertinent topic for serious
debate this weekend....of whether or not

a. silver will crash as compared to gold during a
modern depression?
b. silver will regain its historic 16:1 ratio to gold, as
gold makes its glorious ascent?
c. or will they both move together, in their respective present ranges?

you presume my dear friend
Haggis__A ( Vronsky..........and Haggis ) : Your statement is grossly presumptuous On MANY COUNTS... but I have neither the time nor desire to clarify why...

To DigDeep
None of us is good with timing, but just in case the crash doesn't happen in my lifetime, I would like to buy something different, say ADM ( Archer Daniels ) - you know, the world needs food too! Or some other grain company. The world needs oil too! Something like Exxon or Chevron.

I am not trying to be cynical, but this thing can go on for a long time.

Lets diversify a bit and stop having a one track mind.

Silver is doing well now because of supply demand and the fact that central banks do not horde it and therefore cannot manipulate it through CB sales like gold. During a depression, gold will remain precious partly because of its portability and high cost of mining.

@ Cmax
The world will not come to a standstill. The entire world industrial infrastructure will not collapse to nothingness. Yes, a depression will hit, but Boeing will still exist, IBM too.

Remember that during the depression some of the greatest technological advancements took place ( avionics, railroads, etc. ) . Even in countries whose currencies collapsed, some order was restored in a few weeks.

Caught your silver post before heading off to bed. I have started to post the silver/gold ratio daily after the close. I think it is important too. I don't have the historical data. BB Fisher is our guy if we could get him back. Would love to get the Dow/Gold chart updated too. I don't have any of that fancy software either but there is probably a chart somewhere. Does Gold Eagle have it I wonder?

Gold Confiscation
Does anyone know how the confiscation laws were enforced when they were enacted? Jewelers obviously made it through these periods of time with inventory intact. Did they make thick 24K jewelry? Were these laws actually enforced against the small holder or were the dealers who would create the secondary market targeted?


Well, you could always try the real thing. You have got the recipe.

Aye, Haggis

Ps Have a strong Scotch afterwards

You are right, but remember that corporations are totalatarian entities which rule from the top down. Notice that big corporations are buying their stock back all the time, the more they have in their tresury the less they have to listen to the little stockholder or even the pension funds. They are the ones behind the WTO,NAFTA,GATT,IMF etc. When they control enough stock they have a free hand to pay themselves whatever they want and the hell with dividends or even stock price.They buy off the politicians and eventually if things go their way we will live in a 3 tiered society. The small group of very rich corporate titans, a small group of professional type to handle the complex problems of the rich, like doctors and chefs, and of course the great mass of servents who have been put into a position of inextinguishable DEBT. A few gold coins in your pocket may be much more valuable than shares in ADM. Plant a garden in your backyard, but remember that now the agriculture dept. want to regulate even organic gardening, and you may not be able to use those seeds because they are becoming patented. Scary.

Conjectures for the last $1000 Had to logoff and entertain inlaws for a while :-(
Thanks guys! Let me see if I got this straight. If I missed anybody I apologise and will try to go back and see later. Its the shock of having to listen to hyperactive 10 and 8 year olds tonight...

Digdeep: you like RYO but aren't sure about TVX. But then they've fallen down and maybe all the Greek strife has been factored in by now.

Panda: AEM, GGO, NGC two takeover targets and a blue chip...

Hipshot: METLF hmmm...looks like it's had a significant bounce back from its lows...

Oris: RYO again. I've got to admit that my prejudice is in favor of it too, but that's just preliminary prejudice, based on very little but looking at its charts. ( BTW the number 223 was the market cap for SSC back in the summer when I'd decided to commit to buying more metals stocks, and a passing reference to the old t.v. show, 'The Prisoner' where everybody had a number instead of a name...very bizarre, I admit, but unique. As far .223 rifles go I shot one in the service, but it would be too expensive to have as a hobby nowadays, unless you made the bullets out of something cheap like silver. )

Myrmidon: The limit for the gold price in dollar terms would be the global supply of credit-dollars. Right now, that's slightly above $30,000 / ounce. By that time, however, prices are likely to be quoted in ounces of gold, rather than in dollars and cents.

My friend, thanks for liking the name Myrmidon. I will tell you from where it comes from:

The Myrmidons were an ancient warrior type tribe living in Thessaly ( central Greece ) and with Achilles they went to Troe to take back the beautiful Helen, which Paris, the son of the king of Troe fancied and took with him when he visited Sparta.

I chose this name because I am Greek living in the US and couldn't think of something better.

Puetz ( ) "Vronsky: You're probably too bearish by only expecting gold to rise to $8,000 per ounce at its highest possible level. The US Dollar and paper-assets will collapse to virtual worthlessness. Based on current global credit-supplies, a gold price of $30,000 or higher is a distinct possibility if our economy has a "Total Collapse"."

Steve, we at GOLD-EAGLE are open to any and all information supporting the argument for higher gold prices. Therefore, if you will backup your prediction of "a gold price of $30,000" with suporting arguments, facts, figures, rationale, or whatever, GOLD-EAGLE will post it to 103 countries with full credit to you and your investment letter. In effect it is a challenge to back up your extremely optimistic gold opinion with words and logical thoughts. Pick up the glove Steve, I know you can make a good case for opinion. Are we on?

Y2K problem @ Reason Banks are selling (Best excuse, I have heard to date. Mushrooms eh!) )
December 26, 1997
Torrid bank buying phase seen continuing

CHICAGO ( Reuters ) - The torrid pace of U.S. bank consolidation is expected to continue in 1998, driven by technology concerns, a desire by larger banks to offer more products and the lure of new markets.

"I think '98 will be a very busy year, in terms of ( merger and acquisition ) activity and possibly accelerate from the levels we saw this year," said Joseph Duwan, banking industry analyst at Keefe, Bruyette & Woods Inc.

By mid-December, there were $94.5 billion in bank and savings and loan deals for the year, well above the previous record of $74.5 billion in 1995, according to SNL Securities, an independent research firm in Charlottesville, Va.

Duwan noted that many bank officials may decide that the costs of making computer systems compatible for the year 2000 are not worth undertaking, forcing them to sell.

I took my name because im in it up to my neck.


Donald A; Puetz
Puetz, I agree with your ideas about holding physical gold and silver as well as your assessment of the severity of the final outcome. However, I don't think we can gauge the coming crash on what has happened in the past.

In the past there was at least some degree of fiscal restraint in inflating the currency because it was much easier to determine the actual amount of inflation taking place. The degree of added liquidity to the system was infintesimal compared to what we are staring at today.

When you say deflation I ask "Deflation in relation to what?". At this point, deflation in relation US dollars can only occur if it is aggressively pursued as an economic policy. Is this tiger going to change his stripes after 50 years of global hyperinflation? Do you honestly believe that is going to happen?

The reason we are walking the razor's edge right now is because of the irresponsible political philosophy of forestalling pain avoidance as long as possible.

This philosophy had it's birth at Bretton Woods and is called fractional banking. All currencies are not equal heroic efforts to maintain this illusion.

As long as everyone keeps inflating at the same rate this game will continue. What happens when it is no longer in the best interests of a country to maintain their arbitrarily mandated exchange rate?

There is a hell of a lot more gold in the coffers of UK than Italy. If you were an Italian businessman and saw your currency being devalued against the pound, wouldn't you buy pounds?

Where is the deflation? The Lira simply becomes devalued against the pound ( or whatever currency emerges as the new medium of exchange ) .

I suppose if you look at this from a viewpoint of it being a national issue your argument for deflation makes sense. But it doesn't work that way anymore.

After or perhaps at some point during the crash, a single currency will rise as THE dominant currency which will be used as a measuring stick against other currencies similar the US dollar.

At some point a major currency is going to break ranks with the G-7 hyper inflation club to save it's currency. This currency will then become the stable point of reference for other currencies.

We are watching a game of global chicken right now. Anyone who wants out of the inflation club is going to get bum rushed by the central banks to weaken their currency.

Where is the deflation in any of this? The deflation is only going to occur in the country that has the political resolve to break ranks with the rest of the world.

Are you thinking that is US? We are the ringleaders of this mess.

No, your apocalyptic visions of the future are absolutely correct because
these boys have already sold their souls to the devil. To fix the problem is to admit that they created the problem.

And fixing it would quite a feat. It would require an extremely painful restructuring of virtually the entire economy from top to bottom which would be political suicide.

These boys are going to ride this thing into the ground. Eventually, the political heat from voters will outweigh the potential damage from breaking ranks. When that day comes it's every currency for themselves.

How can you say that the US will pursue a deflationary policy? Do you think we will be the one to break ranks. No way! We are the ringleaders in this game.

Do you think IBM will buy it's overseas parts with gold? Think again. Gold may re-establish itself as the stable point of reference, but trade requires stability and some agreed upon medium of exchange. The king of the mountain will definitely have some sort of gold standard or at least super fiscal discipline.

All this talk of inflation vs. deflation. This discussion is premature. Our real question is which currency will emerge as the new international medium of exchange and what actions will have to be taken to establish that supremacy? War?

Donald, in your case, the "A" is a grade!
It will not surprise you that I agree, mind and spirit, with every eloquent word you wrote. You believe as I believe. However, in my life experience, the world has yet to fashion itself in accordance with the template I deem reasonable.

Mosler Soft Currency Economics is our worst nightmare come to life; and the ONLY reason it is frightening is that it represents a last ditch hope for the US government. There are always the deluded power elite that clutch the bale of straw and cry with fervent glee, We can spin it into gold. Mosler presents them with a spinning wheel.

It is my hope that the Valuers will bide their time and skillfully enter the power circle at the appropriate moment, bring with them a non-hegemonic global currency back by gold, the SDR. The new, SDR.

@ Puetz
... If we ever have 100% convertibility to gold. I personally think that the governments will adopt something like a 30-40% convertibility. Remember also that 3/4 of all dollars will evaporate as the credit structure collapses.

Therefore, $30,000 / 4 = $7,500 and at 30-40% convertibility this gives you a price of gold around $3,000 /oz. That is if a crash happened tomorrow.

Cmax: The gold-silver rato during the 1930s is a useless indicator of what will happen today. Gold was fixed to the dollar, silver was not. Obviously, those who wanted to escape the credit markets would automatically go into the precious metal fixed to the dollar -- gold. It happened in a big way.

Today, neither gold nor silver is fixed to the dollar. They must trade off of their own merit. As money ( their global scarcity ) , the ratio is about 7 times as much silver as gold. That indicates that gold should be about 7 times higher priced than silver. A gold-to-silver ratio toward its lower historical norm ( 10-to-1 ) seems appropriate.

farfel and Pegasus


You have a point. I would however keep in the back of your mind that it is Pegasus Gold Australia Pty Ltd who have asked for voluntary administration, which is a wholly owned subsidiary of Pegasus Gold Inc.

Irrespective of the gold price the Mt Todd mine was not performing to the feasibility criteria, way out of wack! An improvement in the gold price to US$320 to 350 may not necessarily solve Mt Todd's problems. It has not been performing.

An increase in the Pegasus Gold Inc share price will depend upon the performance of Mt Todd, not nescessarily the gold price. The mine is now on "care and maintenance" ie production has stopped, so the problem cannot be solved.

The Administrators, Ferrier Hodgson of Brisbane, may be required to "go after" Pegasus Gold Inc in due course.

Has anyobe else got similar or other opinions.

Aye, Haggis

@ missingLink
Numismatic coins and jewelry were exempted from confiscation. Only bullion coins were illegal.

Schultz: The deflation will occur against true money -- gold and silver. Also, historically, inflation and deflation are credit and monetary concepts. Not until recently have they been viwed as price measurements.

The deflation will come from a collapse of our credit system. When that happens, it won't matter what the Federal Reserve or US Treasury does. South Korea and Japan are recent examples.

A credit-system collapse involves a massive loss of confidence among the general population. In the US, a stock market crash will serve as the catalyst in spawning such a "loss in confidence". Once confidence is shattered, it's virtually impossible to regain it. Then, the collapse becomes self-feeding.

@ missingLink
Bullion was also illegal.

Gold Bugs & Gold Newsletters @ Why isn't the Organized religion pushing GOLD, eh!
Total Collapse
Friends, many top financial newsletter editors are advising that there will be a total collapse in everything when the stock market goes down.

Some are Robert Prechter, who writes The Elliott Wave Theorist; R.E. McMaster, Jr., editor of The Reaper; Don McAlvany's The McAlvany Intelligence Advisor; Richard Maybury's U.S. & World, Early Warning Report; The Wall Street Underground; and numerous others. See our Gold page for more.

Following are a few quotes from Steve Puetz's ( pronounced "Pitts" ) , Total Collapse--The Financial Crash of the Millennium which can be ordered from:

Schultz 23:09.Agree in your main presentation and very well put into
perspective.We are entering the start of a new warcycle as of '98.There
is a considerable tightness of raw material every 28 years,that leads
into inflation two years down the road.

@ 6pak
How far down?

We are in toal agreement. Your point of reference appears to be PMs which is completely logical.

I sort of wince when I see postings about inflation and deflation and the poster has a currency ( usually the US dollar ) as the implied point of reference. It gets very exhausting pointing out the folly of trying to "make money" with PMs so as to acquire more dollars.

I find no comments whatsoever on this site tonite of what appears to be a tremendous upmove in Platinum the last two days ( Kitco shows the latest bid/ask in Asia @ $391 - $399 ) . Are the Kitco quotes bogus and/or is everyone so focused on Gold and Silver that they are ignoring Platinum? If the Platinum move is indeed factual, is it just a temporary blip given massive short covering and year end position squaring?

Schultz: I completely agree with your most recent posting.

Steve Puetz

Are you saying that silver will cease being a semi-commodity and regain its full monetary status?
That gold and silver will again become world currencies?

28 year cycle in raw materials?
Cyclist: Could you give me a reference -- that 28 year cycle ( I think ) is not mentioned in the Dewey books that I have. I wonder -- that 28 year cycle -- is it a simple trade-based supply/demand cycle, or does it factor in political barriers to supply? We may be entering a period of new trade barriers as various countrries struggle for survival. That may be the inflationary trigger in the US that leads to the final debt deflationary wave.

I have another question: What do you think of the warrior/intellectual/acquisitor/laborer cycles of P.R.Sarkar. There seems to be alot of logic to this, and it fits right in with the Kondratiev wave cycle. I think the acquisitors will lose their control of SEAsia very soon to the laborers -- leaving an open door to the warriors to take over as the cycle begins anew.

Jack: Yes, gold and silver will regain the monetary status they have held for many centuries. That will be true because, credit-money will increasingly be defaulted on. In the US, and around the world, that is the new and most powerful financial trend in existance.

When borrowers default on their credit-promises, gold and silver become the next logical money-alternatives. The precious metals do not require a promise from anyone else. They are money by their own historical reputation.

Yes, I have a newsletter and I push pre-1933 gold very heavily. I'm sure there will always be an underground economy in bullion no matter what happens, however I don't want to be hampered by the potential confiscation of bullion.

I dumped all my bullion about 2 months ago and switched to St. Gaudens, $10 and $20 Libs. Although these coins are affected by fluctuations in spot gold price, the nicer coins retain their value and some even increased when the price of gold is declining. Liberties are about 50 times more scarce than St. Gaudens but the prices are not that different.

You can pick up slabbed MS 63 ( MS=Mint State 63=uncirculated number scale goes from 60-70. ) $20 Libs for as low as $575 each. This is only about $75 more than the a MS 63 St. Gaudens.

The upside potential is higher and you don't have to sweat when the price of gold starts to fall because it has to go a long way down before your price is affected.