WEDNESDAY JANUARY 7 1998
FT

Currency concerns continued to dominate trading trends across Asia. In
HONG KONG inter-bank rates hardened for the second day running as
neighbouring currencies lurched lower, sparking more heavy selling of
property shares.

The Hang Seng index closed off 168.03 or 1.6 per cent at 10,135.51 for a
two-day decline of 5.2 per cent. Although turnover improved to HK$7.63bn,
trading conditions were said to be still very thin.

Among the bigger property losers, Sun Hung Kai fell HK$2.00 to HK$49.00
and Cheung Kong came off HK$1.30 to HK$47.70.

TOKYO closed lower, buffeted between fears that the Japanese economy
was ailing and hopes that the government would support the stock market.
During the morning, the Nikkei 225 average fell more than 200 points to
14,714.09, triggering new fears among some government officials that the
stock market could be entering a new downward spiral. However, these fears then prompted the government to announce new measures intended to calm the markets. These included curbs on short selling and higher penalties for market manipulation.

The details of these were not revealed until after the market had closed.
However, in the early afternoon - while the markets were still open - the
government announced it was poised to reveal new measures and the share
market rallied.

The Nikkei 225 finally closed at 14,896.40, only 60.44 lower on the day
having traded within a range of 14,714.09 to 15,066.73. First section volume was 346m shares, more than double Monday's activity. The broad-based Topix index came off 5.98 to 1,160.65.

JAKARTA was wracked by currency worries as the rupiah fell briefly to a
record low of Rp7,700 against the US currency.

Although it later recovered to about Rp7,100, the spread of 5 per cent
between bid and offer prices suggested ongoing nervousness ahead of
President Suharto's budget speech.

Analysts said investors spent the morning trying to sell blue-chip shares but trade on the stock exchange dried up because there were few buyers. Heavyweight Telkom fell Rp300 to Rp3,000.

The currency's recovery towards the end of the session prompted a recovery in export-oriented second-line stocks. Tin miner Tambang Timah rose Rp650 to Rp7,000 and nickel miner Inco Rp6,000 to Rp7,700.

SEOUL gained around 2.5 per cent on the back of foreign buying, with
purchases focused on a handful of heavyweight blue chips. Analysts said
foreign funds were buying, encouraged by the won's weakness, low share
prices and comments from financier George Soros on Monday that he was
looking at putting money into South Korea. The composite index ended 9.85
better at 406.34.

KUALA LUMPUR fell sharply as the ringgit lost 6 per cent against the
dollar. The composite index closed 21.05 or nearly 4 per cent lower at
525.74.


Well, George is saving Korea. AG saved...what was it Margolis credited
AG with saving?...i forget... Who is going to save Japan? ( A. Goose,
are you going to donate your New Year gold? )

any ideas on gold price....i bought quite a bit of placer dome today based on my brokers tip....thoughts?

Hang Seng is down 477 or 4.7% @ 11:30 PM. Add that to the 3.7% loss yesterday.

anyone heree??

Would you rather earn less than 6% per year interest on a 30 year U.S. bond? Even if gold drops hang on. Gold and silver haven't moved in U.S. $ in the last 12 hours even though Koreans are selling gold. What else can you buy that is a tangible asset that will hold its value? "Tools" that you need to carry out your career, courses, good books, food. What else?

i thought this was a gold chat room

SDRer:
I have been a thinking and a worrying about just what to do when the government calls on us to bail them out. I can see Bill and Hillary. They look mournful but hopeful. ...

NO WAY, they got US into to this mess. I am taking care of my family, my friends, and ... helping support tolerant1's brigade because I don't want those idiots in Washington and Wall Street to screw it up ever again.

ko - good points, i think gold is at its low, this is the best time to buy and hang on, secondly PDG ( placer dome ) has cash costs of $225 and also has a huge hedge program

what do you think???

Anyone has any info if there are any gold mines in Korea?

Soros may be evaluating them....

nigel, patience laddie. Your thought was correct, this is a Gold forum. There is much to learn here. Your question will be addressed and much more. Arf, Buddy

Q. Whats the largest constiuent of a firecraker?
A. Paper
Disinformation is aimed at the fan as the greatest illusion of all
is about to be unleashed. Stand back. I could be wrong.

What's going on here?

This whole thing will be tagged on Clinton. The Great Reckoning states that they believe the Dems won't take the Whitehouse for another 25 years. There may be hope as they state in the tremendous middle class in the USA.

However, this means that Repubs get their head out of their butts or we get an independant, what a thought, a rogue, a Washington, Jefferson, etc.

There will be much work to be done to pick up these pieces. Good minds and people of spirit, with conscience. We can do it.

Get Camdesuss!

People keep referring to 1929 and the crash and subsequent deflation
as though they haven't had their recent recurrence yet. Mark Twain
wrote that history doesn't repeat itself, it rhymes. Of course, the
crash that was a reflection of 1929 was in Japan in 1989. Japan had
just taken the baton as major financial center of the world from the
U. S., with 5 of the 10 largest banks ( relying on memory for this number, not rechecking ) . This was similar to the U. S. taking the baton
from Great Britain after the collapse of their empire; The U. S. had some serious growing pains in the 30's.

When we remember that the crash already happened and that Japan is several years into its subsequent asset deflation, all that is happening today makes sense. Just don't listen to the talking heads, they never, ever say it straight. Remember Greenspan in '91 saying there was no recession in sight although we were well into one in the USA? We can only have really useful discussions if we remember where we are in the cycle.
And there are cycles. Sorry, new paradigm guys.


So where does our current situation lead?

Yeah, find a Jefferson amongst us. Whatever we had planned for the next decade would pale in comparison with supporting such a character.

All: Please read D.A.'s recent post about the market turmoil in SEAsia. Something big is up if he thinks the currency, etc. fluctuactions are much higher than usual. Makes me wonder if ANOTHER and Ian McAlvany ( excellent Jan 1998 issue on Gold ) are right about a pending short squeeze on gold due to the CB gold loans and the producer gold forwards.

Not tonight, but later when the US dollar has its turn. ANOTHER and McAlvany both mention gold going up hundreds of dollars in a few days as a real possibility. I wonder -- with electronic money there may be no intertia to damp the system so this may be possible.

The world's governments and the central banks have tried to keep the price of gold down several times in the past since the 30's. But -- this was with gold sales, not with the amplifier of derivatives. Virtual gold may move up and down much faster than historical gold as we reach critical opalescence. We all must be careful that our gold short squeeze may be more than we bargained for. I think this is the riddle of ANOTHER's posts that Allen ( USA ) has been alluding to.

On the other hand we should keep a small amount of our assets invested in gold/gold stocks at all times -- just in case the initial gold rally comes and goes in a flash of brilliance! Black-Scholes may feel like Nobel did after he saw the consequences of the dynamite that he invented.

If such an explosive gold squeeze eventually happens, gold and the dollar will never be the same again!

Based on some mathematical work I do, we are in a trough in gold shares give or take a few weeks. We might see a little more decline over the next week or two, but after that we should climb up to a peak in the first part of June, 1998. After that, I am out of the long side until September and maybe more depending on what my model looks like then. You should do well on your position. I expect Homestake to double between its low and June, 1998.

Good points - at $15.60/share in Canadian funds it has a gross profit margin of 14%, price to book value of 1.86 and price to sales ratio of 2.1

Weak points - low cash flow to debt ratio of 0.21 and low return on invested capital of 3.3%.

As I've said before I prefer Prime Resources at $8.15 Canadian share price, gross profit margin is 45%, price to book value is 2.0, price to sales ratio is 3.0, company is debt free and return on invested capital is 31.7%

Myrmidon: There is production of gold in Korea from somewhere or something: http://apec.kigam.re.kr/org/commodity.htm

Just caught this, as I haven't had time to read Kitco recently. Family from abroad & stuff.
Date: Wed Jan 07 1998 00:09
nigel ( gold price ) ID#312253:
any ideas on gold price....i bought quite a bit of placer dome today based on my
brokers tip....thoughts?
Great move Nigel- good stock, prices at these levels are a rare buying
opportunity, buy more and others, as well. John Disney can offer suggestions on some good S.African companies with much in the ground.
Have followed PDG since the old days, when it was called Dome. Have
a chart that I keep up from the 1950's, lovely uptrend, and looking to
go much higher in the next decade. Good move!!!

Would like someone who subscribes to the Dr. Harry Schultz letter, to
request he search through his archives of about 25-30 years ago, and
reprint one he sent on the markets of the 1890's. Fascinating reading.
The psychology similar to today's. If the rest holds true, we'll be seeing about 2 years of this sideways behavior, with a slight downward
bias, and then the drop. A bear market that will probably last several more years. A depression at the end of it. Not happy thoughts, I know
but " the more things change, the more they remain the same".There's
really nothing new under the sun1?1?

Your purchase sounds good. Sounds like there is a nice margin built in there and you bought at the lowest gold price since '79. Nothing comes with a guarantee, but are you worrying because you didn't do your own homework?

Myrmidon: Interesting post. Perhaps G. Soros can get $5/oz gold if it is in Korea, and is still in the ground. That would certainly be an excellent place to bottom fish -- right farfel?

Crystal Ball & Barb Hughes Thanks for info, I am the proud owner of my first well circulated $10 liberty bought for US $142.00 equivalent in NZ Playmoney. Joins the real Bars and Maples.

nigel Welcome.

cherokee another translation please "tam bien"

cabin boy on the bridge of the Titanic AGAIN.


aurator - tugging at the sleeves of the important fellas and pointing madly afore - ignored again.

As has been well reported, Asian currencies are being creamed again tonight. Gold held up well today and tonight ( so far ) considering. The question is, can the currencies drag gold down more, or has the rubber band become fatigued and lost its pull. Although gold has tracked the currencies down for the last two years, very closely, we are now in virgin territory, both wrt the level of the currencies and the slope of their decline. The currencies just can't go any more vertical. Usually in the real world when something goes exponential like this, the snap back is just as fast. I can't believe gold will rally in the face of this decline in currencies, and it may well decline further. Chances are good that it will. However, If the currencies make a "V" bottom and head back up, gold may move up with the speed of a striking snake. Since I am now sitting on the sidelines with respect to gold, this is of much concern to me, and you can believe that I am watching this action very closely.

I was beginning to be concerned! Besides, someone once said that, Satisfaction is the state of mind produced when you witness the discomfort of someone you dont like.

http://www.yahoo.com/headlines/980106/international/stories/algeria_1.html

Trying times provide a global stage for great people.

What if everything drops as people cash in assets to pay off debts worldwide? If gold and silver drop less than other tangibles like income producing real estate or petroleum you will have done well.

aurator--'bout time you came on shift! Getting bloody in Asia again. You still buying Gold?

SDR_er otherwise known as Schandenfreude

auradixonary

invasion of privacy! It is TOOOOOOOOOO much. There is nothing beyond the pale for the D. Morris crowd evidently. "Yea Bill, the people loved
FDR's dog! It was a real huggy, kissy thingy for the folks. Get a dog Bill. They'll love you!"

I'm more than ready to join Tolerant1@The.Brigade and make SURE
this doesn't happen again. ( We won't have to wear uniforms, will
we? Or march? --like April, not march ) . Where do we sign up?

aurator--Nothing like holding the real thing, eh!

Anybody know how much gold was actually confiscated by the US Gov in the '30's?

Auric Howdie. Yup I'm a buyin if there a-sellin. ( wonder what handle mr Gartman is using now? )

Gotta go - Salmon on BarbQ, 'sgotta be just seared-- like the goldbugs!

lateraurator

by paying off your bills and turning a good chunk of funny money into real assets like gold, silver and faster modems for your computer. Good luck all!

This is my first Kitco posting after a month or so of sidelines. I commend
you all on knwoledge and spirit.

I am looking for input on Canyon Resources ( CAU ) @ $1.00 and
Golden Star ( GSR ) @ $3.00. I like GSR's debt position and potential but am a little shy about their lack of revenue. As for CAU I purchased @ 1 1/16 and feel this stock has an established productive mine and a good opportunity in their new Montana site. It appears their EPS could increase 4-5 times even with gold at somewhat depressed levels.

Just like the U.S. depression made PM believers out of it's citizens so too will the asian crisis make goldbugs out of its citizens.

I say many harsh things. Many here have placed thoughts in front of my mind's eye. Given some reflection, having thought about it. It finally came to pass that some things changed within me and some did not.

Get Camdesuss!

For those of us who are still in paper gold assets here are some numbers
of the market cap of gold stocks ( $Billions )

ABX 6.340
NGC 4.798
PDG 2.875
HM 1.247
BMG 1.163
TVX 0.466
ECO 0.322
HL 0.275
AU 0.272
MDG 0.202
RYO 0.199
-----------
TOT 18.1 $ BILLION

HALF THE MARKET CAP OF MOTOROLA WHICH IS 35 $ BILLION!

If we all chip in, we can double these stocks really fast!

Not really...but there is a little something to be said
--perhaps--for getting the last laugh, having the last word and
paying the last installment. Thus far, I'm one out of three--the
last installment...

I admire your chutzpah! Glad you're on our side. Go Gold. And yes, by all means, get Camdessus!

I have Golden Star as GSC on the TSE with price to book of 0.75 but with negative profit margins and returns on equity. I think that this is a dangerous market for any finiancial asset even including gold or silver shares that are not profitable at todays prices and carry high debt to cash flow ratios. Stick with debt free investments in all categories if you have a choice.

Besides Prime resources PRU, consider Franco Nevada FN. This a market where debtors in any category could get creamed.

My friend, even if you get Camdessus, what are you going to do with him?

.... send him to Korea to dig for gold with Soros?

You already signed on by being disgusted with the lack of leadership and by having a knowledge of the horrible games Washington plays with people's lives.

Our uniforms are the clothes we wear everyday. The marching is done as we leave and return to our loved ones. Our weapons are the vote and well placed words. The battle field is the Court of Law.

Get Camdesuss!

Good night, it was fun.

It is not up to me. I think the IMF and the others should be brought before a Court of Law. IMHO they are breaking the laws of these United States.

Get Camdesuss is just one little cry for financial justice in the sea known as the Internet. squeak!

GSR ( AMEX ) & GSC ( TSE ) are one in the same. The last figure I received for this comapny indicated CA=25m CL=4m & no long term debt. The book was $3.05 and the price to book was 1.10. I sent for the company's most recent reports and am still waiting. The 4thQ 97 figures should be interesting. Thanks for the flag

Anybody here, seen my old friend Michael, seems the the good, they ski dumb. I just looked around and he was gone. Let's hold hands and light a candle for that degenerate user of teenage baby-sitters.

DJ:

I think we are at the point where further declines in the SE Asian currencies will be meaningless. In Korea, Indonesia, Malaysia, Thailand, Philipines and Taiwan the devaluation of the currencies has gone so far as to make gold unaffordable to all. Demand has dropped to near zero. The difference between zero and near zero doesn't really matter.

What matters now is the demand in those countries that have hitherto been unaffected by the contagion. China and India, two large consumers have seen the price of gold collapse. Demand in these countries will no doubt skyrocket. On the downside, demand can fall to nothing, on the upside there is no limit.

Once the currency crisis begins to abate in SE Asia you will see a stampede into gold. People are always chasing the last refuge. In SE Asia the psychology will be in place for at least two generations. They will never again be caught short without some physical assets. It will become dogma. It would not be surprising to see the issuance of a gold or oil backed currency in the near future.

Bernatz we sorely need your reports on the effectiveness of the dirt machine @ $280 gold and still urgent your unbiased opinion of Camdessus.

Today was another day of broad based sell programs that added conviction
to my belief that paper is moving from strong hands to weak. It is beyond
belief that the poor cannot see that the rich are setting them up for the
second time in 69 years! This time the vehicle they are using is the mutual fund industry. When the music stops they can simply blame those financial gurus known as mutual fund managers. It is sad to think that we live in a country where the elderly and the poor have been lead like sheep to the slaughter. Donot worry about the wolves my little sheep as they will not hurt you eventhough they are starving! The mutual fund industry has begun to unwind and once the paper is in the hands of the poor liquidity will dry up and the game will be over.
Think about it, out of the blue funds have decided not to release numbers on outflows and inflows of capital! Funds are borrowing money to handle the rapid growth of redemptions! Greenspan talks about deflation at a time when the U.S. is printing money and the need for demand in the treasuries is imparitive! People standing in line to buy 30 year bonds at a rate of 5.75% and they call it a flight to safety. Clinton talks about S.E.Asia as a bump in the road! Clinton talks about balanced budgets as though they were real! Oh yes the unwinding has begun and my only advice to holders of mutual funds is STARVING WOLVES LOVE SHEEP!

Ah, D.A. - the zero to near zero demand for gold in Asian countries is analogous to zero or near zero demand for gold stocks in the U.S.

This is in the surface only, there is underlying demand and time will show it.

the stock market CRASH IS NEAR ALOT OF PEOPLE WILL GET HURT FROM THIS ONE THE OTHERS ARE NOTHING THIS WILL RESULT IN ANOTHER DEPRESSION. 1930s that was nothing this will be cause more of a disaster than a NUCLEAR WAR ENJOY THE RIDE HAHAHAHAHA

I have spoken to family members, friends, nobody listens to me about getting out out of mutual funds. Such is life. I have given them all sorts of reading materials. Such is life.

D.A.
Is it a fact that the POG has collapsed in India & China?

In the "developed" Asia that's Aussie ( Come in Nick ) & NZ, the POG is showing resilience because of corresponding decrease in our $$ cf US$.

I'll leave you with these words:
"Money is the most important subject intellectural persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it is widely understood and its
defects remedied very soon." Robert H. Hemphill, former credit manager, Federal Reserve Bank of Atlanta

And this from a man we both admire: "All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation." John Adams, letter to Thomas Jefferson

G'night all. Keep the flame burning.

Aurator:

Up until now the Chinese currency has remained static with respect to the US buck. The Indian currency is down around 10%, doing better than Japan, and Europe.

THE BEAR HAS HAD A GREAT SLEEP AND NOW THAT HE IS FEELING THE GOOD WEATHER OF EL NINO HE IS GOING TO BE VERY HUNGRY TO SNATCH UP ANYTHING IN ITS PATH. MARK THE WORDS OF THIS COMMENT AND AS ABSORB AS IT MIGHT SOUND LOOK FOR THE DOW TO HIT 5800-6200 range this year a world wide pandemic is approaching and it has gobbled up asia and it is heading to NORTH AMERICA

There is one more thing left...

Get them on this board and they will learn fast.

Get your mutual fund holders to do "free switches" into cash, bond, mortgage and precious metals funds to reduce risk over stock funds. if they ignore you tough. It would be interesting to know how this group diversifies its assets:

my case

no debt
35% in precious metals stocks and funds ( Prime, Repadre, BGR Precious Metals )
20% global bonds
43% in US/Canadian real estate construction and renovation stocks
2% in International stocks

Another tale of animal heroics:

http://www.nando.net/newsroom/ntn/world/010698/world16_2585_noframes.html

And to all a good night.

though the spin doctors have lulled them asleep. The pictures of Koreans standing outside of banks hoping to rescue their life savings will be reproduced in America with the only difference being they will be lined up outside of mutual fund offices.

HANG SENG IN A FREE FALL DOWN 5.3% and falling buy PUTS ON EVERYTHING THE BEAR IS COMING

I post this, and the next one, just in case it's of interest.

Best wishes to all.

Let's hope that eventual returns on Au amply repay our patience.

p

From today's Times:

[[

Deflation fears plunge

gold to 18-year low

BY ALASDAIR MURRAY, ECONOMICS CORRESPONDENT

Korea reopens IMF talks

GOLD slumped to an 18.5-year low yesterday as fears

about deflation, coupled with a South Korean plan to sell

gold to raise badly needed US dollars, continued to haunt

the market.

Oil prices also tumbled to a two-and-a-half year low

because of faltering Asian demand, the mild US winter

and the imminent resumption of Iraqi oil exports.

Gold fixed at $281.80 ( 172.46 ) an ounce in afternoon

trading - the lowest since July 1979 - before recovering

slightly to close at $282.20. Analysts said the latest fall

came as investment funds short-sold gold again while

Australian mining companies have moved to hedge future

production.

Market sentiment was also damaged by the national

campaign in Korea to persuade citizens to sell personal

jewellery for dollars. Patriotic Koreans thronged banks

across the country to hand in the jewellery, which was

weighed and valued, before being melted down and sold

on export markets for dollars. Participants will be repaid

in the South Korean won after the gold is exported.

The campaign began on Monday and a further 6.8 tonnes

was handed in yesterday, bringing the total raised to ten

tonnes, valued at about $100 million on world markets.

However, the banks said they would no longer give daily

details of the gold collected because of fears it could

further unsettle the gold market.

The price of gold has come under renewed pressure after

comments by Alan Greenspan, Chairman of the Federal

Reserve Board, that with inflation under control, deflation

- a fall in wages and prices - could prove to be a problem

for the US economy in the coming year. Gold has

traditionally been regarded as an insurance against inflation

and reached record prices during the inflationary 1970s. It

enjoyed a brief revival after the 1987 crash and the Gulf

War but declined in value steadily for the past two years.

Analysts have been worried by signs that central banks,

which hold reserves sufficient to meet worldwide demand

for the next ten years, are considering disposing of their

holdings. The Australian Central Bank last year admitted

selling two thirds of its stocks - the first time a leading gold

producer had disposed of its reserves. The Swiss Central

Bank - one of the largest institutional gold holders - has

also hinted that it may sell 1,400 tonnes.

The market is likely to remain nervous before publication

of the Gold Fields Mineral Services report tomorrow,

which will provide estimates of supply and demand last

year and could reveal if any central banks have made

futher disposals.

In the London oil market, IPE Brent closed at $16.04 a

barrel having earlier touched $15.55 - its lowest level

since July 1995. The latest fall came as the UN confirmed

that it had approved a plan under which Iraq can resume

oil exports in return for food. Baghdad is permitted to

make exports totalling $2 billion every six months.

The oil market has also been hit by falling demand

prompted by the Asian economic turmoil and a mild

winter in Western markets, and analysts said there was no

sign of prices bottoming out yet.

]]

GC8G $283.2 @1:18:58 on quote.com. Looking quite nice thank you very much.

Good Night

Clinton is the fall guy, be the rumours true or false - I don't pretend to know - HE ( CLINTON ) is... IT..., like in hide and seek. The trouble is that America doesn't know what she's looking for - the movers and the shakers seen to that.

This one is also from today's Times.

Best '98 wishes to all.

p

[[

THE irony about the rout in the gold market is that the metal is

in short supply. Mined production and scrap recovery yield

about 3,000 tonnes per year while demand for jewellery, and

bar hoarding, totals about 3,500 tonnes annually. In theory, the

price ought to be buoyant but central banks are selling and

comments from Alan Greenspan about asset price deflation

have only speeded up the downward spiral.

Gold mining companies prefer to believe the spot price

collapse is a blip rather than a trend but are helping to speed

the decline. Most gold producers fix the price at which they sell

their production, often several years forward. Forward selling

by mining companies and by speculative funds has worsened

the fall in the spot price but it means many producers have

secured their immediate financial future.

That will afford them little comfort if they fail to shut down

unprofitable mines. Some 400 tonnes, about 20 per cent of

Western gold mining output probably needs to be cut.

Producers could use their hedged positions to cut output and

buy spot gold to meet contractual commitments but few

companies are so bold. The market could receive a further jolt

in May when the European Central Bank announces what role

gold will play in its reserves. Anything less than 10 per cent will

be a disappointment, and gold has fewer and fewer friends in

central banks.

]]

It seems strange to me that people can believe inflation has disappeared. My understanding of inflation is that it is an increase in money supply. The result of inflation in the bidding up of something when the new money is spent and this increase is price is mistakenly labeled inflation. Back in the 60's and 70's what the new money was spent on was real estate, gold and other commodities and on everyday personal expenses. In the 80's and 90's the new money has been spent on stocks and bonds and they certainly have responded upwardly. When stocks and bonds are out of favor if the banking cartel can keep the shell game going then the price of something else will get bid up. The question boils down to whether the government/banking alliance can keep the credit bubble expanding. The problem is in the mechanics of money expansion. It is loaned into existence. You go to the bank and borrow to buy a car. The bank puts your note on its books as an asset and ups your checking account balance by a corresponding amount. Your debt is the banks asset. The banks debt ( the new checking account balance ) is temporarily your asset and then the car dealers, but it stays a liability of that or some other bank ( It just gets transferred from one banks books to another as checks are drawn ) . When you repay the loan you must give the bank a check which means that the part of the bank asset gets cancelled and part of the bank liability gets cancelled. New loans are inflationary. Loan repayments are deflationary. In order for the money supply to go up, more new loans need to be made than are repaid. Of course this requires credit worthy borrowers. The real problem comes when the limit is reached and baring government intervention, the banking system ultimately collapses as it did in the 1930's. Even when government steps in to keep the banks from failing, the ability of those banks to expand credit is generally impared. You can see this happening in Asia. The banks made a lot of loans and correspondingly went into big debt themselves. Its a leverage game. When the loans the banks made go bad like they are now doing, the ability of the banks to continue is brought into question. That is why the money ( mostly bank debt ) in these countries is suspect and losing value.
Whenever money can be expanded with relative ease it will be. Whether the money is circulating paper, or electronic entires on a banks books it will expand ( because it is easy and profitable to expand ) causing a bubble, and eventually the bubble bursts because of the drag of debt. This is why gold, which is difficult to expand makes a much better ( certainly more honest ) money. It is difficult to expand, so in a gold is money economy, there is only gradual money expansion. Because production of other assets usually increased in a healthy economy there is usually a constantly falling cost of goods. ( Money supply stays constand while goods supply goes up results in falling prices ) .
I really don't know how this will all wash out, but it certainly seems we are in a crisis period. I know what needs to happen to restore economic health. We need to have honest money. We will not get honest money from dishonest people, which is to say as long as government has its way we will have debt for money until the economy is run into the ground to the point that even the politicians and their monopolist friends cry uncle. I think that we are all much better off to plan our lives in such a way that we give as little to the government/banking/monopolist group as possible. This means staying out of debt so we don't feed them interest. This means avoiding every national, state and local tax possible. ( The internet provides the means to escape to tax havens and avoid tax on investment and trading income. ) And of course personal action means having some real money ( gold ) upon which to live when the US banking system reaches the point of the Asian banking system and the US debt based money becomes suspect. The key is timing. I think we will have a nice rally into early June, 1998 ( double gold share prices from their lows of this or the next week or two ) , but I am not sure that we will not see these present low levels once more after the coming rally.

:
You callin' me kooky? That's fighting talk let me at im ( where's Up and at Em? - Front are you still back? )

Bumper sticker kitco:

"If you're lost in thought, it's probably because it's unfamiliar territory"

aurabond_James_Bond_gettingconfused@theshearingshed

Hong Kong -6.02%
Malaysia -4.28%
Philippines -4.02%
Singapore -6.22%

Tell me that this isn't a crash ahead of a depression in Asia.

HANG SENG 6% and falling look for 100+ fall tomorrow on dow ISN"T LIFE BEAUTIFUL

Tried. Such is life. They look at me funny when I mention gold. Such is life.

When it comes to debt they have no comprehension. They for the most part have been prepared quite well for their harvesting.

Maybe its just...such is life...

The matter of utter disintegration is a subject served up here frequently with, ahh, relish. A.Goose and all others, be very sure that a thousand years of legal precedent, the principle of private property and the presumption of innocence will not matter; "The Government" will simply come to wherever the money is and.../take it/.

Ave, Magister Voyans! "Adeste!" dico; linguam Anglicorum amo.

tolerant1
Interesting, for the first time for more than a decade, the other week I was with friends who were really listening to my take on deflation, POG etc. Either they realise that their paper fortunes are not as safe as they thought or I was more pursuasive than usual...Sure is a good education to be gotten at kitco

auratormurderingthelanguish

MAY BE ON INDIA, 10% down is not enough. It will be interesting if India's citizens line up to sell the precious for paper dollars.

Retearivs: Yeah me too, I hope he sees your post - he will if he does a search in Latin huh?

auramontanus

Selby, there is no denying that, currently, most of the action in the precious metal markets is professional ( rather than of the little guy type ) . However, I categorically know that the professionals respond to the velocity of price movement more than the actual price level. How do I know? From my experience in trading gold during '93. In that regard, professionals are no different than "the little guy." Thus, any significant change in the velocity will have as much psychological effect on the professional as upon the little guy. However, I do not think you can deny that the velocity itself will also ultimately entice the little guy when "he sees where the action is." Moreover, given the relatively small size of the precious metals market, it does not take a lot of "little guy action" to increase the velocity of the metals' movements.

Back in the days when I studied Economics, the main thing I learned in terms of economic analysis is that the slope ( velocity ) of the curve is more important than its position on the x-y graph.

In any case, my main point in preceding posts was to indicate that velocity is a very compelling factor...but it must be accompanied by
the appropriate arresting spin in order for the velocity to be sustainable. This is where the gold industry is in position to CHANGE THE PERCEPTION and promote exceedingly dramatic and positive spin to counteract the accumulated negative spin over the past decade or so.

Finally, with respect to the little guy, there are, in fact, cases where the little guys actions PRECEDE AND INSPIRE the professional reaction. For example, there is increasing evidence of rapidly increasing little guy action on the physical purchase end ( as opposed to the speculative investment side ) . This type of little guy activity can impact significantly the speculative markets.

Internetting with a friend in Toronto tonight, he informs me it is virtually impossible to find any stores in his area with decent size supplies of Canadian gold Maple Leafs. SOLD OUT!!! Apparently, there are a handful of Eagles BUT NO MAPLE LEAFS!! This is highly unusual. He knows because, as manager of his family portfolio, he regularly buys and sells coins on their behalf. Now this may simply be a regional shortage....or a harbinger of a greater pandemic shortage.

P.S. Shorty sends his fondest to you and the boys!!!!

The best method I have found so far to get them thinking is to put the actual object in their hands. I tell them it is not just a coin, you now hold freedom in your hands. It is a gift. Go, think, read, buy.

Hopefully this will work. Like I said "to get them thinking."

From there hopefully will come action on their part.

The herd is waking up - it seems - but not everyone will see things at the same time. Of course, some are fast learners, others never learn...

Whatever the case, Wall Street will teach them what Kitco can't do.

Myron Kandel on CNN still thinks the Dow will reach a new a high in the first quarter of 98.

Too many people want to be like Peter Lynch but without his homework and buy stocks through thick and thin.

The rest are "dollar cost averaging" courtesy of Jonathan Pond and the Wealthy Barber.

Interesting you mention getting them on the board here. I have run out several hundred pages in full text, handed, mailed it to them. Such is life. I get newsletters and give them to them. I am a walking, talking ad for metal. Such is life.

tolerant1 - do you remember Producer's story of a week or so ago? He gave a small gold flake from his mine to a young girl, and ten years later, the woman had never forgotten.

It's like when Auric bought his first coins, and noticed that an ounce of gold weighed more than an ounce of anything else. The history - the human lives holding the gold, passing from hand to hand, humans using gold as a medium, an honest medium between strangers. Ingot we trust.

As for paper..why, there's nothing to match it...

Interesting tidbit from the NZ treasury ( warning is from jaded memory --just trying to keep the flame alive, guys )

Our first minting of $2 coins since the first minting in 1990 ( each coin costs 6  ) contract given to a S African Company, a price led decision, it turns our that the new coins although they are "identical" to the first issue, do not work in over 60% of coin vending machines.

It's amusing to see what a seven dollar drop in the AU price does to the average investor...pessimism, resignation, despair, and capitulation resonate throughout this forum...gold speculators are so beaten down that a simple little "boo" sends sheer panic into their very being.

Absolutely nothing fundamentally changed today to warrant goldbug capitulation. Greenspan talked of deflation...he's done so numerous times in the past. Some Asians are selling gold...they do so every now and then. Big F__ing Deal!

Bottom line is this fellas: throw out your technical charts and your fundamental analysis...gold's ultimately scintillating rise is predicated upon three events which are simply unpredictable: either
equity, bond, or dollar collapse ( or varied permutations of these events ) .

It could happen tomorrow...or in a month...or in a year...that it will happen is inevitable given the over-inflation of Amercian financial markets. If you don't have staying power ( the financial ability
to hold a non-performing asset indefinitely ) , then you shouldn't be in this game. Go home and knit a sweater for your grandma.

WHen the "New Paradigm" myth collapses, today's "huge" seven dollar drop will seem like a joke measured against the double digit dollar leaps that will occur upon a daily basis. Gold remains the
only pandemic, alternative asset to the American buck. People will hand you bushels of dollars for your universal assets. End of Story. In one year, you stand to make back what you failed to earn over a decade ( Thank God I was alive to witness the last great Gold rocket back in the early '80's )

The cynicism and gloating of the Karlitos and the Large Green Boogers is irksome...but it is the understandable character trait of victors over the vanquished. They sense your futility, defeat, and
fear...and they feast on it. Turn it around...feel the power of your understanding and your immutable self-confidence. Make the Shorty McGee's of the world nervous ( and God knows, they should be! ) .

Stop whining, fellas...tomorrow's another day. CHANGE THE PERCEPTION! ( But first, go out and write yourself a nice little poem ) .

CBC Businessworld in Canada said a poll indicated that Canadian were splitting most of their retirement plan purchases over the next 60 days between equity and balanced funds.

Yes, and other stories as well. It does change the perception, the mind set. There is no question of the effect it has. When you put a real silver dollar in their hands it is fun to watch.

The thing that gets to me is they all eventually ask the same question within a few seconds.

"Hey, is this real?"

I then tell them to think about the question they asked and think hard about it.

farfel?

I have learnt not to read your posts, they concern me not at all. I do, however, object to your multiple posting as being a waste of bandwidth.


biteme!@_aurator

I agree. But I liken it to giving people a car in the US with a steering wheel on the right side of the vehicle. It is difficult to change perception. In addition there is zero promotion in the gold industry.

But I am out there plugging away.

In a previous post you mentioned that you have spoken to many mining CEOs on the issue of "Perception".

Well, some 15+ years ago I saw a movie with Jane Fonda ( Sorry, I forget the title ) of an economic collapse. This educated some of my friends!

Anyone remembers the title and the movie?

A similar movie centered around SE Asia may change the "Perception". If it is financed by a mining consortium, it has good actors, is not scary,
it will make wonders and make Perception and Imagination fly. It will help the balance sheet with some black ink too!

I tell you, they will make more money than digging gold at these prices!

You have the connections, speak to the CEOs, they may listen. At least see the movie. Any Kitco brother remembers it?

My neighbour asked me if I thought it was a good time to buy gold. I said show me a better investment of spare cash other than career tools? He still hasn't bought any. He is afraid it will go down but his balanced fund should do just fine.

A fellow worker close to retirement has close to 100% of his money in mutual funds and just bought some more AIC fund investing in mutual fund company shares. I asked him if he ever considered diversifying some of his assets into precious metals funds. He said "well I know you like them but I need a higher return and made a killing in the AIC fund the last 2 years straight."

Thanks for the quotes.

Aaaah...such are the deficiencies of the internet. Grin and bear it, my salty friend...we must all suffer the repetition of the ignorant, most notably the loquacious internet orators of our day.

Whew, finally finished it all. Yes, solid/real money. Truth!

Myrmidon...you cite a concrete and brilliant example of what I am talking about.

However, remember, I am but one voice...and you are not without your own power and influence. Why not internet and/or FAX your idea to various major gold producers. I guarantee you will get a response.

One of the best things I have come up with to promote gold and silver is the Olympics. I always make a point of saying, "you never hear them announce how somebody got 4 pieces of paper, now do you?"

No, go for the GOLD!!! Bring home the GOLD!!!

sheesh

Get Camdesuss! squeak!

I am not familiar with the film.

Yet, in the not too distant future, we will be driving both electric and solar powered cars...something far more radical than a right hand steering wheel. These impending changes will require a great deal of re-tooling and re-educating the public. The public will change and because their perceptions are changing on a daily basis. The media spins them in that direction on a daily basis.

The continuous spin, in essence, is as follows: aren't you ( the American Public ) tired of witnessing severe environmental deterioraton and suffering regular extortion at the hands of oligopolistic oil interests and Middle Eastern heads of state?

.

Hong Kong -5.89%
Indonesia -3.92%
Malaysia -3.40%
Pakistan -2.52%
Philippines -4.02%
Singapore -5.21%

In that movie Jane Fonda and Chris Kristofersen played. It was about gold and oil interests and a world economic collapse. It came out around 1981 when gold was hot, so it sold well. I am sure someone will remind us of the title.

I know that $100M makes today a good movie. I had a brief dialogue with Mr. Vronsky but the promos were limited to video suggestions which doesn't reach a lot of people. It was also mentioned KITCO T-shirts!!!!!

Well, lets get real. Investment is required, and returns expected. The 10 US majors can pool some money and get the returns!

and falling

I am not sure, but I think that the Olympic gold medal is not all gold. Either is gold plated or 14K. Please verify this info.

I have little doubt,
That if the herds of investors.
Decide that MF's and shares,
Are not where they want to be.

That what is about to unfold,
Will not be pleasant.
That the realities,
We perceive as normal.
Will change to the realities,
We wish to avoid.

To envisage,
What will become.
Is beyond
Most peoples comprehension.

To achieve a state of capitulation.
Amongst financial investments.
Will spin many a person,
Into a world,
They care not for.

Beware the stages of capitulation.
The death throws,
Of the financial morass.

Many will turn away from pieces of paper.
Many will look for some to blame.
Many will not wish to return.
Many will not wish to play that game.

Caution is invited.
But to what should we turn.
More pieces of paper?
Or something more physical,
From which we can learn.

These golden pieces of paper,
From which our riches could grow.
May well turn to paper,
That others will not want to know.

There could well be a state of denial,
From which the investing herd.
When looking where to go to next,
Will not want to return.

Choose wisely,
Your choice of investments.
As they may not be the same tomorrow,
When you go to redeem them.

There will be this stage of denial, of capitulation,
As we have seen from history before.
It will show in all financial matters,
Like never seen before.

First the financial burning.
Then chaos will rule supreme.
Then along comes Y2K
To make it all seem a dream.

All pieces of paper,
To which we hold onto dear.
May well be rejected, and not desired,
By all those with the fear.

Many of the companies,
To which we give our trust.
Could well become shells.
Of their former self.

Many loans will default,
Of that I am sure.
Many projects to be shelved,
As funds become no more.

Beware and think twice,
Of that which you choose to do.
Because in short time.
Life will not be the same.

AS WE WIND DOWN THIS FINANCIAL GAME.
( :o}}}}}}}}}}}}}}}}}}}

IMF=Improperly Managed Funds? - I like this term better.

Date: Wed Jan 07 1998 03:03
KO ( Asian Bull Market ) ID#270224:
Hong Kong -5.89%
Indonesia -3.92%
Malaysia -3.40%
Pakistan -2.52%
Philippines -4.02%
Singapore -5.21%

______________________________________________________________________


'Tis getting a bit messy out there. Historical lows on the
30-year Treasury, currency flight me figgers. It takes a bit
more than chump change, as Oldman noted, to move a market the
size of Treasuries with magnitude and velocity into uncharted
territory, the most liquid, dollar-denominated security globally.
But move it does.

Your turn for a poem now. Sharefin is mastering the art and is becoming a serious competitor.

lower and lower

In your list of indices you forgot the DOW! Make an intelligent estimate next time you post of the DOW and lets see the reaction!

sharefin ( Capitulation around the corner - to send us all around the bend ) ID#284255:
I have little doubt,
That if the herds of investors.
Decide that MF's and shares,
Are not where they want to be.

________________________________________________

They say that the poets are the unacknowledged legislators.
I wouldn't know about that, but I can say that this stuff serving
as a medium of exchange isn't working well as a unit of account
nor store of value. Funny, unit of account is the chief function
with this sort of thing. Funnier, when first things get misplaced
to second and thirds.

hey farfel

"change the perception" is not sexy enough
change the image
you got the gold
you get the girls

( well it gets some of them )

BHP is finding problems with Escondida.
MIM is finding problems with Alumbrera
Pegasus found problems with Mt Todd.

Perchance these problems stem from liquidity.
If the lenders stop lending.
And start to recall their loans.
Many, many projects will just stop.

Many, many, once viable projects will go to the shelf.
Many of these companies will fade away.
Disappear totally.

Gold share will suffer like all shares as the masses,
Change their phsycology.

They have the potential to fall just the same.
Also, they will suffer from a liquidity crisis.
Beware of speculating who will survive.
It would not surprise me to see 50% of mining companies to fail.

The companies that do survive,
Will be true gems, and do well.
But even the biggest can fold.
As many run and survive only on funding.

A liquidity slump will affect one and all.

Any company that has debt,
Or needs liquidity to run.
Has the ability to disappear.

What we perceive today,
And use as a measuring stick.
Will not be the same tomorrow.

And as this contagion spreads,
So to will the measuring stick change.

Myrmidon ( @ 2BR02B ) ID#345268:
In your list of indices you forgot the DOW! Make an intelligent estimate next time you post of the DOW and lets see the reaction!

____________________________________________________________________

Prediciction is so difficult, especially as regards the future,
which, like the past isn't here. I'm curious about the direction of
the bond market.

How can I compete?

Let's hope that AU mining company shares experience a slingshot rebound ( along with actual AU ) in the face of any deterioration in general equity.

For example, you can put the DOW UP by 5% ( 400 points ) and if you get some static say sorry, I meant down by 5%. The reaction is what we want....

Myrmidon - you did well remembering the plot.

Admittedly, gold equities are only paper claims and could collapse along with general equities...but they have already been knocked down to the floor.

It is a real perplexing question: if there is ultimately a flight of capital to precious metals, will this fact pump up the value of already collapsed gold and silver equities? Or will precious metal equities collapse along with the fall in general equities?

Impossible to determine until the phenomenon actually occurs. ( However, ultimately, I am inclined to bet that gold and silver paper will experience a slingshot rebound as value is perceived in the tangible hard assets ) .

In other words, there is bound to be some paper in this world that retains value...such as precious metals, utilities, food processors, etc.

P.S. Again, I love free-form poetry. Good job!

Yes, sam...you change the perception in every respect. Sex sells in this society...so why do TV ads not employ sex to sell gold!

You got it...send your suggestion to a gold producer or two immediately.

Farfel, how about if every miner marketed a bit of rock for a reasonable price ( that is gold content + 20 bucks for example ) of the prime rock. I have never touched, or seen rock with gold. Imagine what an excellent present it will make ( especially at Xmas ) .

I would love to have such an object. They can start with direct mail order to their shareholders. A few flakes visible and real will make wonders.

Date: Wed Jan 07 1998 03:41
Myrmidon ( @ 2BR02B ) ID#345268:
For example, you can put the DOW UP by 5% ( 400 points ) and if you get some static say sorry, I meant down by 5%. The reaction is what we want....

__________________________

Mr. Market knows all, sees all. Whatever he say, that be so.
As Kafka noted, in one's argument with the world, bet on the world.
Still, this bond thing has got my attention. Historical lows since
regular issuance of the 30-year Treasury initiated in 1977, surpassing
the low of 1993, a low set in a different environment, for different
reasons in my opinion. What in the devil can this mean.

That's exactly it! Part of changing the perception is allowing the public at large to actually see and feel the ore...because the ore is tantalizing and seductive.

Most people I know have not even held a gold coin in their hand...let alone the actual ore.

Why don't mining companies provide such substantive propaganda at their annual meetings?

Send in your suggestion and rattle the gold producer cage!!

Then start marketing those little stones to schools, universities, etc. something like Apple did with computers. Expand later on to gold pens and useful items - not womens jewelry since this is a different market all together. I would love to buy a video from Barrick gold showing their mines and the process of getting the gold instead of some pictures in an annual report.

You start with the 20,000 plus stockholders. It is all an issue of marketing.

Maybe because I am a marketing guy I am prebiased, but reality is that you need organized intelligent marketing to change the perception.

Nikkei net news has several pages specifically devoted to ongoing coverage of Japanese/Asian problems. Has many links to news articles on each respective page. May be useful for those interested in following things as they continue to unfold.

Nikkei.net site re: "Bank Brokerages failures"
http://satellite.nikkei.co.jp/enews/SPECIAL/failures/index.html

Nikkei.net re: "Japan's Financial Big Bang"
http://satellite.nikkei.co.jp/enews/SPECIAL/bigbang/bigbang0.html

Nikkei.net re: "Asian Market Turmoil"
http://satellite.nikkei.co.jp/enews/SPECIAL/market/index.html

I think the reason that gold is not a big hit with the public
is the perception that it is too expensive. Don't you just love irony.

Nick@C much longer absence will be dereliction of duty.

Myrmidon: IMF=Improperly Managed Funds Right!


And presenting for the first time in Cyberspace....

"The Land of the Free_____ HA HA"


....a merry sketch of irony, blasphemy and goldbuggery.....Part 8.....


When asked his opinion on the revaluation of Gold to $35.00 from the $20.67 that American citizens were "given" in exchange for their gold that was previously confiscated, Senator Carter Glass replied to Roosevelt on April 27, 1933:-

"I think it is worse than anything Ali Baba's forty thieves perpetrated."


to be continued......

Did you mean "The land of the naive.....?"

jcw ( Japanese news ( in English ) on Japanese/Asian turmoil ) ID#198170:

______________________________________________________________________

Thanks for the links, it's a reason I tune in to the 24-hour
gold channel. I don't think that the popular press does a particularly
a good job of reporting on complex stories, which most any story is.
To be alive in one's own time, I would hate to miss the witnessing
of the unraveling of the greatest financial delusion of all times.

The people of the Roosevelt era bought into his ideas because they were desperate. There is no desperation, yet, in the current mindset.

don't pitch it to farfel
pitch it to:
barrick
freeport-mcmoran
bema gold
ashanti goldfields
trillion
in this order please

One last question before I go to sleep:

The people in Korea who turn their gold in they are getting an IOU.
Is this promised payment in $US or in local currency? I hope that is not in local currency because by the time the get the payment they will be surprised!

May be the are protecting the price of their jewelry with puts on the Won!!!!

Anyone knows?

Late night trivia dept: Mr. Fisk, of Fisk & Gould infamy, in response to congressionally inquiry into his gold pyramid scheme
as to where the dupes money went, Mr. Fisk: "Gone where the woodbine twineth." Woodbine, a fragrant flowering vine planted around the
outhouses of the day to mask the smell.

Sometimes I think that even the crooks of an earlier era had
more class than today's leadership. Maybe that is ever so.

Trivia question: If the cowardly lion was "Cross of Gold"
William Jennings Bryan, who was the scarecrow and the tinman.

JCW, I want to thank you for the web-site siting for Nikkei. This
is a great help and I sincerely appreciate your posts. Well done.

Ersel: Quite, there is yet no despair in the land of the naf,

Yet, in the US there are appprox 250m people. The same no 250m are in Indonesia ( you want to wake up sweating at night?--find out how small Indonesia is and a little about Javanese Muslim Imperialism ) that have been affected by the SE Asian crisis, ask them about despair, ask them about POG. and then there's 125m in Japan, 80 m in Korea, the same number in Thailand ( ? ) have a look at the ( ? ) 1.2 billion in India---the list goes on. The good Old US of A, is not really ( and has never been, really ) the centre of the world....The despair has not yet washed on your shores.


( What shores? ) As they'd say at my local.. ( thinkaboutit )

I said some time ago here, when eyes were fixed on SadandInsane, SE Asia is the tinderspot. China is the Powderkeg. But where/what/who lights the fuse?


keeping the flame alight

and running out of steam ( Watt, Jamesaurator )

tgl are u Mr Gartman? I can't sleep for not knowing.

I read an article today..dont remember where..was just surfing ( was probably Reuters ) that koreans will be payed in won after the sale of jewelry. Gold was supposed to be sold for dollars to pay back dollar nominated debts and so reduce this agressive buying which drives currencies down.

As I understand the situation the main reason for USD$ highs and falling stock markets is that noone who has dollars wants to trade them for won, ringit, asian stock or whatever in this region.

Which of course is 1:0 to gold versus paper.

In case paper is no longer trusted you can pay in gold ( although it drives its value temporarily a bit down ) .

Geb

I thought the song text was a bit different

This land is my land
it isnt your land
if you don't get of
I'll blow your head off

For I have shot gun
and you don't have one
THIS LAND IS PRIVATE PROPERY

The government will get $s but what about the people?

Are they getting something now? If they get paid now that is OK.

The way I understood it is that they will get paid on the gold is sold.

It is a bit foggy, that is why I raised the question. Are they getting paid now or later and with what?

Ersel. Your gomt confiscated gold from its citizens. Class, political persuasion was unimportant. However,hmmmm I remember someone posted that the only citizens affected by the confiscation were middle economic brackets ( the poor didn't have any and the rich went to Cuba. well you get the idea )

Contrast this with the voluntary donation of gold by citizena in Korea and Thailand. It is too easy to put a western "slant" on this. Perhaps a closer analogy in War Bonds, the tremendous PR/Propoganda campaign to buy war bonds. Patriotism,,,, a common enemy ( BTW that's YOU ) ...united we can defeat them....Churchillian,eh Msr Vronsky? But, add the Eastern Patina of fillial duty extended to duty to one's country, born of respect of ancestors...it is a no brainer.. give up the gold if your are korean, actually, there'll be a justification, a citizen will be content to give more than half, but less than all ( conflict with one's own ancestors ) of the gold..who cares...?

Ersel ( 2BRO.....I'bite, Who were the Scarecrow/Tinman/ ) ID#2
______________________________________________________________


....lookin' for the link to post.

Gebernax,
you war monger you.;- ) ) And the difference between my version and your version is the reason the US will be drawn into a war with Japan sooner than I imagine.

'nite- passing the flame of truth, liberty and the american way to the upovers....

turn it in?
( repeat this 100 times out loud )
you'll have to pry it out of my
cold dead fingers

MacDonnell, Francis. 1990. ``The Emerald City was the New Deal: E.Y. Harburg and The Wonderful Wizard of Oz.'' Journal of American Culture. 13 ( 4 ) .

Rockoff, Hugh. 1990. ``The 'Wizard of Oz' as a Monetary Allegory.'' Journal of Political Economy. 98 ( 4 ) .


The scarecrow as farmers, the tinman the American industrial workers.

gold gold gold
guns guns guns
grains grains grains
greens greens greens
( yes but don't forget )
gin gin gin

January 7, 1998
Edit Page Features
The Optimum Price of
Gold

By JUDE WANNISKI

The $100-an-ounce decline in the price of gold in the past 14 months has
persuaded conventional wisdom that gold has lost its luster as a monetary asset. The sale in this period of 12 million ounces of gold by central banks--out of holdings of 11 billion ounces--has been part of that story. Those of us who believe the world is moving toward an international monetary reform with gold as its center have the
opposite view: Gold has once again superbly demonstrated its ability to
foreshadow changes in the general price level.

The precious metal has been doing this for thousands of years. It did not stop when, in 1967-71, the U.S. abandoned in stages its 1944 pledge at Bretton Woods, N.H., to maintain the price at $35 an ounce. When the link was broken and the dollar "floated," the dollar price of gold quadrupled to $140 by 1973. The worst inflation in U.S. history soon followed, as the Canadian supply-side economist Robert Mundell at Columbia University had predicted.

Modern central banking and the use of government debt as money has
eliminated gold's utility as a medium of exchange and sharply reduced its
role as a store of value. Its surviving monetary function is to provide the Federal Reserve, which has the task of determining how much money to create from day to day, a precise signal of money demand.

Stabilize Gold's Price

If, from an optimum given point, the dollar price of gold rises, it is a signal that there is surplus liquidity in the banking system. The Fed should then withdraw this surplus. It does so by selling interest-bearing bonds from its portfolio for the cash and bank reserves that pay no interest. If the Fed does this, it will tend to stabilize the gold price. On the other hand, if the Fed fails to withdraw this "liquid" debt, the
process we know as inflation is initiated. The banks will be forced to apply the liquidity to risky transactions.

Should the gold price decline from that same optimum point, it signals a
shortage of liquidity in the banking system. A shortage means the market is trying to finance sound transactions, but cannot. Now the Fed should buy bonds from the banks, supplying the needed liquidity. Otherwise, transactions that should be financed will not take place, initiating the process of economic decline called deflation. ( The Great Depression of the 1930s should properly be called a contraction, not a deflation, because it was caused by errors of tax and tariff policies, not of central banks. )

Throughout modern history, governments have frequently suspended the use of gold in order to finance wars. After wars, governments have always returned to gold to take advantage of its utility as a monetary signal. In doing so, they must face the problem of returning at the optimum price, which is not easy because it is a subjective decision. A lower price benefits creditors as debtors must pay back dollars worth more in real terms. A higher price benefits debtors at the expense of creditors.

During the "greenback" financing of the Civil War, the dollar price of gold floated to $40 from the prewar fixed price of $20.67. After the war, the creditors who dominated the Republican Party won the argument. They insisted on restoring the prewar price, but at least allowed the six
years up to 1879 for the debtors to adjust to the crushing burden this placed on them. Wheat, corn and wages had all doubled with gold, and the deflation forced a halving of these prices. After the Napoleonic wars, during which the British pound sterling price of gold had floated up by 40%, restoration of gold at the prewar price produced a sharp, quick recession that led to a populist revolt against war taxes. Britain also left gold at the end of World War I to finance its war debts with cheap
money. The sterling price of gold floated up 30%. In 1925 Winston Churchill's Tories restored the prewar parity in another boon to creditors that forced a sharp, quick recessionary adjustment.

These examples all pale next to the dollar deflation of the past 30 years. From $35, gold floated as high as $850 in 1980 as the Fed ignored its signals and created liquidity with reckless abandon. When the Reagan tax cuts increased the demand for liquidity that the Fed refused to supply, in early 1982 gold fell to $300 from its 1980 average of $600. The deflation produced the worst recession since the 1930s. The savings-and-loan industry, which had deployed the surplus liquidity of the 1970s in ever-riskier loans, collapsed under the deflation's weight.
Today gold is below $290, after having spent 1981 to 1996 in a range of $340 to $400. With this decline, gold has again shown that it can forecast deflationary pain. The worst has been felt in Southeast Asia, where the central banks added gobs of liquidity to the market in order to keep their currencies tied to the dollar in 1993-96. Why? The 1993 Clinton tax increase had caused a decline in the demand for dollar liquidity. When the Fed did not mop up the surplus, gold rose 10% in dollars, from $350 to around $385. The Asian banks were forced to push their reserves into uncollateralized bricks and mortar.

Alas, when the markets here began to discount the tax cut enacted last
summer, demand for dollar liquidity rose, but the Fed, again falling back to Phillips Curve thinking, was worried about rapid growth causing inflation. In refusing to supply the liquidity demanded, the Fed not only wiped out the 10%. It also initiated a new deflation, taking gold
down past $350--which I believe is its optimal price, because it appears to roughly balance the interests of debtors and creditors--to below $300. In order to deflate with the dollar, the Asian central banks had to withdraw liquidity from the banks and all the surplus brick and mortar, or rather the shaky loans made to finance them, came crashing down.
The economies now suffer further under the austerity strictures laid down by the International Monetary Fund.

For the Asians, clearly the optimum dollar price of gold to which they pegged is not optimal now. Nor is it optimal for Japan, which is valiantly trying to keep the yen close to the dollar in order to satisfy the Clinton administration and is crushing yen debtors in a ghastly
recession.

Is a gold price lower than $300 optimal for the U.S.? So far, the answer isn't obvious. Gold is at a level we have not experienced since 1979, which suggests the general price level will have to decline in order to equilibrate with gold. However, the capital gains tax was cut and it is unlikely we will see federal tax increases anytime soon, so it may be
that an adjustment to this low level can be managed without any net pain to the economy. As usual, oil and commodity prices have followed gold down, producing an early euphoria among consumers. As a second effect, a falling price level inevitably puts pressure on nominal wages.

There is no arguing that it does favor creditors over debtors, though. This is fine as long as you are a net creditor. In any case, an economy strengthened by the capital formation invited by the lower capital gains tax enables debtors to pay heavier debts. The nation's biggest debtor, the federal government, also bears the heaviest burden. As measured in ounces of gold, the national debt is 25% higher than it was a year ago.

A Monetary Guide

The gains to be had for the whole world in formally stabilizing the dollar price of gold are so great that if we just get it at some point between $300 and $400, the adjustments would not be terribly unpleasant to anyone, even if the price were not exactly optimal. If $350 were chosen, as Jack Kemp recommended prior to gold's decline this year, the Fed would target gold instead of interest rates as it works to eliminate inflation and deflation from the financial system. It would simply buy bonds from the banks to provide more liquidity when gold approached $345, and sell bonds, mopping up surplus liquidity, as it approached $355.

Once anchored in this fashion, the U.S. dollar would provide a reliable monetary guide to all other national currencies. The global financial maelstroms of the last 30 years would give way to a new century of calm, of the kind the Bank of England provided the world in the Pax Britannica of the 19th century.

Mr. Wanniski is president of Polyconomics, based in Morristown, N.J.

Silver Futures Rally as Market Refocuses on Fundamentals

Dow Jones Newswires

NEW YORK -- Silver futures rallied Tuesday at the Comex division of the
New York Mercantile Exchange, which some observers explained as a reaction to falling inventories.

Others said the rise more reflected a deliberate attempt by some speculative participants to force prices higher.

The March Comex silver contract rose 14 cents to $6.06 a troy ounce. On Dec. 24, the contract hit a nine-year high of $6.395, then fell as low as $5.80 on Dec. 31.

Refco Inc. analyst James Steel said that the market's focus has returned to fundamentals, particularly stock levels, after the expiration of the December contract on Dec. 29 removed the threat of a squeeze.

A squeeze occurs when those who have sold a futures contract have trouble
acquiring the commodity to deliver against it, and force prices higher.

"The market relaxed quite a bit after the December contract went off the board because the potential for a squeeze was gone. Now we're back to looking at stocks and assessing how tight the physical market is," Mr. Steel said.

Comex silver inventories have fallen about 89.7 million troy ounces since
early June to their current level of about 110.6 million ounces.

However, Dinsa Mehta, Chase Manhattan Bank's global head of commodity risk, argued that the rally wasn't related to fundamentals.

"Today's move was another attempt to create the impression of a fundamentally firm commodity," said Mr. Mehta, adding that the attempt was done by "a set of players. When looking at the long term, one has to treat with suspicion an overt attempt to muscle the commodity higher."

However, Ted Kempf, senior research analyst of the research unit CPM Group in New York, discounted the possibility that the market is moving higher as a result of a certain set or syndicate of players.

"People know the market looks attractive and they are acting in concert, which is what we expected to see," Mr. Kempf said. He said silver's gains, and its move away from gold, are because of the lack of supply relative to demand.

"Looking at the fundamentals of silver, it's extremely positive," Mr. Kempf said, adding that in his view silver has never been married to gold.

"Silver's always been divorced from gold. It is part of the precious-metals complex, and you can say that the complex moves together as a whole, but silver is much more of an industrial metal than an investment metal," he said.

Comex gold weakened Tuesday, with the February contract losing 40 cents to $282.30 an ounce.

Feb.gold up .70 @ 2-8-3

The Thai exchange ( SET ) was up a WHOPPING .04 ( .01% ) ---GO BRO!

Farfel
I feel what we are beginning
Is not so much, the demise of the sharemarket,
As the failure of the credit pyramid.

There seems to have taken place,
An abrupt about face.
In the way money is,
Lent or borrowed.

This change in psychosis,
This change in psychology.
Is what all the to-do is about.

If financial paper is to implode.
All companies that rely on its excesses,
Will find themselves in dire straits.

As the liquidity dries up
The company's debts will not be serviced.
This is a contagion - it travels.
Transfering itself from company to company.

More and more companies,
Will fell the squeeze.
More and more 'investors'
Will leave the cause.

Paper will feel a re-valuation,
As its investors re-write risk and reward.

~~~~~~~~~~~~~~~~~~~~~~~~
I could see 50% of OZ's mines disappearing.
As the valuations rationalize themselves.

The excesses we attribute,
To the way companies 'create' capital.
When removed,
Will prove their net worth.

To value 'current' values,
Is not to look beneath the surface.
It is using today's stick,
To measure tomorrow's values.

What needs to be perceived,
Is the levels of debt,
Equated to the flows of liquidity.
Valued against the,
Resultant 'value' of production.

All else is 'blue sky'
And that is what is being re-valued.


Myrmidon
A gem of an idea.
Our family has a love of paperweights.
And taking its pride amongst the many.
Is a beautiful orb of esquisite yellow.
With gold flakes floating through the centre.
Truly a delight to hold and behold.

My ESTRANGED lawyer brother ( Wills + estates ) who stole my entire ( but small ) inheritance many years ago,works on the Thai Stock Exchange trading-investing rich Amerikan's money and at least the money he stole from me is no doubt GONE---whatta damn pity....eh!---almost makes the Asian crisis worth it for me....ta ta

Koreans have collected personal gold items and jewelry by tons to help the country buy foreign currency

During the campain which begun on Monday estimatedly 10 tonnes of gold has been collected ( exceeding 100 mil US$ ) . However, this is only a bit better than nothing since the country has to pay about 40 billion US$ to it's creditors during next 3 months.

The possible gold sale of Korea combined with short selling of several international funds ( caused by fears of deflation ) brought the price of gold to 18 years low yesterday.

Korean markets rose slightly on Monday, January 5th when US financial guru Georg Soros announced that he is planning remarkable investments in the region.

Soros claimed tha the crisis can be overcome but it requires a complete restructuring of banking and financial sector of the region.

REUTER-DN-P

***I apologise for poor english but I tried to translate the article word by word from estonian language. So if you find the original you will probably have a good laugh.

The source however should be reliable, it's a newspaper belonging to Bonnier group ( Sweden ) .***


Geb

I move to a place ( Swan's Island ) where they are COMPETENT enough to run an ISP....

DENTON TX: Somehow, Dennis, I feel compelled to answer your criticism of my inclusion of astrology in my posts at Kitco yesterday. Perhaps it is the heartfelt concern, and civil manner in which you expressed it. Your quote from the Bible was very apt. Neither Astrology, nor science, nor philosophy, nor anything else upon this earth alone will replace faith in God. That is because God is the ultimate mystery and source of our being, and since neither science, nor philosophy nor astrology alone can explain these things, in the end we must all reconcile ourselves to our personal relationship with that source, however we conceive it. But casting a biblical quote dissing astrology at me is perhaps a tad unfair. The Bible says the same thing about faith in gold, yet you continue here at Kitco. I would not hurl a biblical quote at you for doing so. That is because, no matter what we believe, we have the right, and obligation, to pursue it in the expression of our souls and our lives. If we were all to be held to the Bible ( all of us who are Believers - and I AM a Believer ) we would ALL be instantly condemned. I don't defend astrology. I just do it. I don't sell it, I give it away. Considering the price you pay, it would be easy to pass by my posts and not care. I really don't understand why intelligent people get worked up over the astrological observations I make. It's not like I take up too much space at Kitco either, is it? There are many fine commentators at Kitco who can analyze the fundamentals and the technicals far better than myself. Should I just repeat what they say? Or remain silent? No, I have my own things to say. If they are different than most in their context, then consider it just part of the wonderful lure of Kitco that all possible disciplines are brought to bear here in the search for what the markets may do in the future. Notice I said "search," for who at Kitco is always right? You? Me? As for the endless stories I hear from critics of astrology as to how "astrologers" have led people to ruin in the markets, the same could be said of many other kinds of advisors and analysts. Yet there are also astrologers who have been more right than most, and are conveniently dismissed. That is because people react out of prejudice, and do not actually LISTEN to what is being said. People have been led to ruin by lawyers, doctors, priests, pastors, politicians, presidents. Should we abolish or deny these professions? No, Dennis, we are all human, and it would be a sad little grey world if we all thought alike and followed precisely the same little habitrails of philosophy and action. As for having to prove to you, Kitco, or anyone else the veracity of my astrological work, I don't feel the need. And I don't have the time. But if you do, you are certainly invited to keep score on me and report to the forum on what you find. If it becomes manifest that in actuality, I stink as an astrologer, that may not be so much a reflection upon astrology as it is upon ME. I never claim to be perfect. Or even good. I just say what I have to say from my own perspective, and folks can take it or leave it. I really didn't think it was so important. Certainly not important enough for people to get all worked up over and feel they must attack me for. But then I guess sometimes, in my humility, I underestimate myself. But I appreciate the manner in which you expressed your concern, and I hope my reply puts things in a more acceptable perspective for you. Saint Paul says we should get along with our neighbor, "if possible," and I certainly believe that. Wishing you only God's Blessings.

Can't hold on much longer...Sharks about...Jack's back hurt...S.O.S....Send help, sinking...PT 109...Paper Tiger January Ott Niner. May d...

Morning Ted, I reckon you'll be doing that swan song in a couple of months. If it turns out good for you we are all moving there. I would be nice to get a breather from the Taco Belt. Gold up $.80 whee!!

We all have some understanding of the problems in Korea. It's interesting to read their comments concerning the "squeeze" they're in as a result of the falling pyramid. The following is an editorial from the English language edition of a Korean newspaper yesterday.

Export Financing in Dire Need of Support

The government and the economic emergency committee repeatedly ask the financial institutions to provide capital to the export industry. However, such requests seem to have no effect. Exporting is the only solution to settle international loans and to remedy the foreign exchange reserve crisis. Yet, banks are reluctant to help the export industry because of their own problems of meeting the Bank for International Settlements' ( BIS ) capital-to-asset ratio standard. Despite the economic emergency committee's incentives for banks that increase their loans to corporations, banks that have achieved the BIS standards last year are more worried about the upcoming BIS inspection in March. Thus, banks cannot solely be blamed for their reluctance to advance loans. In the last inspection, BIS had reflected only half of the banks' foreign exchange and stock valuation losses. However, in the upcoming inspection in March, all these factors will be reflected in accordance to the agreement with the International Mone tary Fund ( IMF ) .

Tight monetary policy, which is also agreed with the IMF, should be reexamined in order to encourage banks to increase their loans to the export industry. Loans to the export industry will be hard to obtain if the agreed plan to increase the money supply by mere 9% is not altered. Apparently, the government wants to readjust the increase in money supply by 11 to 13%. However, if such plan is improbable, the government should work out a compromise with the IMF at least to increase the money supply during the first quarter of the year.

Korea should abide by the conditions agreed with the IMF. However, if the money supply reduction is so great that it hinders rational business activities and export, the issue must be reexamined. Ultra high interest rates for short term finances are inevitable in order to stabilize the foreign exchange rate. Yet, if interest rates remain at high levels, most corporations will no be able to survive. Even experts from the US and other advanced nations agree on this point.

If the aim of the IMF and international financial institutions is to receive loan payments from Korea, normal operation of Korean businesses is mutually beneficial. While the reforms should be pursued without fail, the government should seek compromises with the IMF to normalize cash flow in Korea

In an investment mode, wearing my short skirt and shaking my poms poms while cheering for a gold rally I post the following:

There is a man who has three girlfriends, but he does not know which
one to marry. So he decides to give each one $5000 and see how each
of them spends it.

The first one goes out and gets a total makeover with the money.
She gets new clothes, a new hairdo, manicure, pedicure, the works,
and tells the man, "I spent the money so I could look pretty for you
because I love you so much."

The second one went out and bought new golf clubs, a CD player, a
television, and a stereo and gives them to the man. She says, "I
bought these gifts for you with the money because I love you so
much."

The third one takes the $5000 and invests it in December, 1999 gold future options, doubles her investment, returns the $5000 to the man and reinvests the rest. She says, "I am investing the rest of the money for our future because I love you so much."

The man thought long and hard about how each of the women spent the
money. He finally decided to marry the one with the biggest breasts.

We'll design and market paisties made of Gold Eagles...eye catching...Focus...Focus. Studio.R and Tort...Changing the Perception. Now back to the Sea of Tranquility where das boat is sinking.

http://biz.yahoo.com/finance/980107/markets_precious_1.html

http://www.hfxnews.southam.ca/story6.html

Mornin ole buddy......

What will the DJIA do today? I'll start. Dow closes down 180 today. Arf, Buddy

http://biz.yahoo.com/upi/98/01/05/financial_news/pakistanc_1.html

To my Aussie friends:
I have to call Melbourne this morning ( just woke up ) , what time is it in Melbourne now???

Thanks
Sleepy

http://biz.yahoo.com/finance/980107/china_economy_1.html

http://biz.yahoo.com/finance/980107/china_currency_1.html

WSJ:
January 7, 1998

Interest-Rate Fears Sink
Hong Kong Stock Market

An INTERACTIVE JOURNAL News Roundup

Shares nosedived Wednesday, falling almost 6% on Southeast Asian
currency jitters, and fears of a Hong Kong interest rate rise.

The blue-chip Hang Seng Index fell 596.90, or 5.9%, to 9538.61. Trading
volume was worth 11.83 billion Hong Kong dollars, compared with
HK$7.63 billion Tuesday.

"Right now, confusion reigns. Investors are switching to cash," said Kent
Rossiter, senior institutional sales manager at Nikko Securities Co. He
added that clients are telling him that cash, preferably U.S. dollars, is king.

The volatile currency market hit other bourses as well. Taiwan fell 1.6%,
Manila 4%, Singapore fell 4.9% and Malaysia fell 1%.

Analysts said worse is to come.

"I think it'll continue to go down given what's
happening in Southeast Asia and the rate
environment in Hong Kong," said Tom
Monaco, banking analyst at Bear Stearns
Asia.

The Hong Kong market was rattled when most Southeast Asian
currencies plunged early Wednesday from levels late Tuesday, with record
lows registered for the Indonesian rupiah, Thai baht, Malaysian ringgit and
Philippine peso.

The Hong Kong dollar sharply strengthened Wednesday as local banks,
fearful interbank rates would stay at high levels through the weekend,
hoarded the local currency to lock in current rates, traders said.

Late in Hong Kong, the U.S. dollar was quoted at HK$7.7460, down
from HK$7.7500 late Tuesday.

Mr. Monaco said the three-month Hong Kong interbank offered rate is
above the prime rate, suggesting the Hong Kong Association of Banks will
lift deposit rates at their weekly meeting on Friday afternoon.

China-backed shares continued to get hammered Wednesday, plunging
almost twice as much as the overall market. The Hang Seng
China-affiliated Corporations Index, which tracks the red-chip companies,
dived 173.43, or 11%, to 1440.16. This follows a drop Tuesday of 3.7%.
Red chips are Hong Kong-listed companies controlled by mainland
government entities or with significant business interests in China.

Analysts say a combination of negative factors was behind the sharp fall in
red chips, including media reports that Beijing is set to tighten
foreign-exchange controls in a bid to stamp out illegal capital outflow from
the country.

The decline of Asian currencies to record lows this week caused Hong
Kong's interbank rates to rise and is fueling expectations more increases
are in the cards. Moreover, since forward premiums are rising as well,
banks are finding it tougher to find cheap Hong Kong dollar funding.

By the end of trading in Asia, currencies in Malaysia, Thailand and
Indonesia fell to new record lows, while Taiwan's currency hit an 11-year
low.

In a faxed statement, Malaysian Finance Minister Anwar Ibrahim said his
country's currency was "grossly undervalued" and indicated that Malaysia
will take action to defend its currency, the ringgit. The ringgit fell to 4.6850
to the dollar, a sharp weakening from 4.3355 ringgit late Tuesday and 2.5
ringgit six months ago.

Thailand's baht weakened to 53.35 to the dollar from Tuesday's 52.15. It
has lost 51.3% of its value since it was floated on July 2.

Indonesia's rupiah fell to 8,350 against the dollar, down from 7,275 before
Tuesday's budget announcement by President Suharto.

Return to top of page
Copyright  1998 Dow Jones & Company, Inc. All Rights Reserved.

http://biz.yahoo.com/finance/980106/china_usa_1.html

Aid Programs for Thailand, Indonesia Show Signs of Failure
By DAVID E. SANGER

As the United States has focused on rescuing South Korea, the emergency programs to stabilize Thailand and Indonesia have begun to
unravel, raising fears about the effectiveness of the International Monetary Fund's prescriptions for stabilizing large regions of Asia.

http://www.nytimes.com/yr/mo/day/business/

Ted--Here's a stupid idea. What if just one of those Asian countries said to itself, "What the Hell, it can't get any worse, let's go balls out for Gold and see what happens".

Mike Sheller- your 07:19 was verry good. As always I look forward to your
fine posts.

BTW- if you all ain't read the book "The Bible Code", a verry good read.

Tally Ho

Good post.
Our main interest in this forum is the financial implications of the Asian Crisis ( and its' ultimate impact on the price of gold ) , though the problem may easily expand into a major political row which could prove as serious as the economic implications. Obviously, serious political problems between Asia and the US will have a further negative effect on us all ( but maybe not on the price of gold! )

If one did, I am not sure we would know. No one seems to know who is selling and buying.
Plus, the market moves on old news - CB selling etc. which is'nt even fact some times.
They, China and others, may be buying now, who knows?

WATCH
If New Home Sales are down
with interest rates low and fallig, typical for deflation / depression?

Speed
The nation's biggest debtor, the federal
government, also bears the heaviest burden. As measured in ounces of gold, the national debt is 25% higher than it was a year ago.
By JUDE WANNISKI

Looks like they're doing the opposite~~~~~

Good Morning SDRer, I got up early to call Melbroune, but ... I'm to late. Never can keep track of the time zones.

Today is your gold day ... congradulations. It will definitely be a good day.

The Honk Kong Oracle has given another insightful and perhaps even alarming prediction of what currency turmoil to expect in Asia during 1998. It is definitely NOT a pretty picture. Milhouse gives his considered opinion on most major currencies and GOLD.

Gold will be the major beneficiary of the increasing currency
volatility wrought by EMU and the drive to inflate which is already underway in almost every country. The reason it will benefit is because it is the only form of money which exists outside the financial system. As such, it is the only truly effective hedge against inflation. Any method of hedging against inflation which exists within the financial system involves a payment risk. Also, even if your non-gold hedge is 100% effective, you simply end up with a larger quantity of paper.
http://www.gold-eagle.com/gold_digest_98/milhouse010598.html

http://www.herald.ns.ca/cgi-bin/home/loadmain?1998/01/07+194.raw

sharefin: Your comment reminded me of something. One reason given why gold is not suitable for a currency is that there is not enough of it to go around. One problem with paper/electronic money is that tendency for steady growth, so there is eventually too much of it. If we think of gold at the bottom of an inverted pyramid ( real assets ) , and debt/virtual money at the top, we see that the problem with gold is not that there is not enough of it, but that there is too much virtual money.

The outcome is obvious when the virtual money/debt pyramid collapses.

The U.S. must have the cheap labor of developing economies and its resultant goods and cheap oil for the continuation of our controlled economic growth. Otherwise, it's lights-out, hell-bent inflation. We must get these countries to "sign the note" we've presented them.
Korea, et al, have a difficult choice: 1.Default...isolate from "conventional" foreign capital and swing some deal with the Saudis for oil...gold for oil? 2. Sign the note, acquiesce to economic servitude to the West for the next ten/fifteen years. Workin' for the Man...no sovereignty.
China's pissed all over, probably Russia too, that, so far, the U.S. and its stooge, the IMF, are calling the shots. We are the greedy banker.

This is the best deal I've ever witnessed...Redeeming Asian-held bonds with freshly printed greenbacks, ink still wet, and the dollar goes up! Damn!...Greenspan is God.

This is the best deal I've ever witnessed...Redeeming bonds with freshly printed greenbacks, ink still wet, and the dollar goes up! Damn!...Greenspan is God.

This is the best deal I've ever witnessed...Redeeming Asian-held bonds with freshly printed greenbacks, ink still wet, and the dollar goes up! Damn!...Greenspan is God.

This is the best deal I've ever witnessed...Redeeming Asian-held bonds with freshly printed greenbacks, ink still wet, and the dollar goes up! Damn!...Greenspan is God.

This is the best deal I've ever witnessed...Redeeming Asian-held bonds with freshly printed greenbacks, ink still wet, and the dollar goes up! Damn!...Greenspan is God.

"We are told by reliable sources, which have been dead right in the past, that in Feb or March, the smaller Asian nations are going to go to a gold standard. The same source told us when gold was $380 an oz that the Fed would manipulate the price to $280 an oz. We unfortunately were not convinced. A move to the gold standard would be a natural course of events. As we can now see being pegged to the dollar turned into a disaster. If this happens you can be assured gold is going higher."

The IMF is a new paradigm of socialism. Instead of collectivizing
the means of production it is collectivizing the risk of investment, even though the reward is primarily private. It is the taxpayers in Calgary and Cologne who will bear the burden of over-exuberance in Seoul.

When inept banks and overblown stock markets are under the gavel and poised to be crushed by the blind justice of free market principles, the IMF steps in, clucks its tongue and says, Lets collectivize the risk, lets reward failure.

...But dont worry---the newly empowered Micheal Camdessus ( hes the head of the IMF in case you havent seen a newspaper in a while ) thinks that this problem can be easily solved by doubling the amount of funds available. The people of Seoul were right to boo the IMF--they just didnt know why.
C.DeHaemer, Taipan, Jan 98

are of interest; Editorial on page A22 re "Greenspan says the D-word" and right next to that an op-ed piece titled "The Optimum Price of Gold" by Jude Wanninski, President of Polyconomics in Morristown NJ.
Can anyone help with electronic posting ?

Okay...try no to flame me guys...kind of new to the options thing...I've found price quotes to Dec98 gold options...but like to see Dec99.

Any and all help much appreciated! Go GOLD!

Remember too, that China announced some years ago that their
currency would be back by gold.

China's forthright comments on US 'economic aggression' yesterday
allowed us a glimpse at one of the battles now being waged.

The solution to the asian debt crisis is for the dollar to go down.Its that simple.

But why are there no Pandas? Can anyone clue this novice in?

I had a hankering to have the gold coin of the country that believes

in gold!

JTF
There isn't enough gold to cover the exponential growth of money.
But they LMBA have done the concept justice with their use of paper derivatives in gold trading.
Also the CB's with their leasing.

Exponentialy leveraging the true value of the asset.
Comes the day they have to balance their books.
There will be a great reckoning.

AGoose
Sydney time here.
http://www.gold-eagle.com/quotes/goldcorner.html
I think you'll have to add 1/2 hr to the figure to get Melbourne time.

I am truly sorry for the multiple posts...my computer has had it with me, and likewise, I share its sentiments.

The Options after Dec.98 are not traded much and finding free published quotes on the net are scarce . Once in awhile Bolhs will have Jun. 98 Options but I have not seen them for a month. If you find a site please let me know.

in Sydney, Australia ( which is the same time as Melbourne ) . Sydney is 17 hours ahead of Dallas. Thus; when it is 9 a.m/ in Dallas, it is 2 a.m. ( the next morning ) in Sydney and Melbourne. I don't know where you are but
from Texas, the best time to call the East Coast of Australia is about
4.30 pm ( Texas ) which is then 9.30 am ( the next morning ) in Melbourne.
Hope this helps.

I've seen Bohl's site...and he does have info on Dec98. I guess that really the farthest I can reach out. Thanks for your help.

Thanks Avalon and Sharefin. I am in California. I will get it right tomorrow.

As it seemes to me, there are now three GREAT POWERS clashing in SE Asia region:

US Government
big banking organizations of western hemisphere
China

Historicaly:

During the cold war US government used every mean it could to defeat the Soviet/Communist hemisfere.

It included espionage, Korean and Vietnam wars, drugs for arms deals, political refuge programmes and ECONOMICAL AID. Just think about it:

* Marshall plan after Eastern Europe was "converted"
* very favourable trade terms with Japan, after China "converted" itself
* the same for South Korea after North Korea vas "converted"
* favourable credit terms to Latin America after Cuban crises
and so on.

The economical "beefing" of countries in interest was conducted several different ways:

* direct giving of money, arms, food or whatever
* financing via IMF, WB, several regional organizations
* AND BY GUARANTEEING PRIVATE INVESTMENT via tax exemptions, militar presense, AND PROMISE TO PRINT LOTS OF DOLLARS IF NECESSARY ( check FED related legislation

The strategy worked and so there is no Soviet block no longer. But like every war the Cold War was also exhausting.

Situation looks following now:

* US Government would like to quit using economic tools as weapons, not because they are nice people but because its expensive

* private organizations would like to get a firm hold of everithing which is theirs by the law

* China although liberized largely compared to 60-ties, is still a communist country ( actually it's really not relevant ) AND STILL LIKE ALWAYS HAS AMBITIONS BY FAR EXCEEDING ITS BORDERS

What happened:

The countries in SE Asia built their tiger economies all over region, based on cheap and diciplined labour, lots of low interest loans and favourable trade agreements with USA and Western Europe from 60.ties to present. ( China was so communist that could not do business with west by definition )

The capital chanelled via private institutions acted in the principle of maximum profits, since private institutions do not necessarily share the views of governments no mater are they noble or not ( we here are the living proof of it ) . So there was a lot of ineficient use of capital which under the favourable terms of US government was PROFITABLE.

Communist block disintegrated late 80-ties easly 90-ties

1994 China devalued its currency.

What changed:

US government no longer likes the idea of unjustified "beefing" of the region, or more precisely the reasons which made this system just and fine are largely gone.

As I said before, private business wants to collect every cent possible.

China is offering even cheaper labour ( and just as diciplined..maybe less skilled ) than the rest of SE Asia countries for both economic and political purposes.

An example: A chip plant in S.-Korea, built with borrowed money at say 10% interest, producing and selling chips with 15% net profitability, was well off. When prices falled, partly due overproduction, partly due cheaper products from compeating plant in China, profits went below the interest rate. I belive this is the case in most industries in the region.

* US government is no longer interested in notable progress in the region, not because they are evil, but because they have lots of problems of their own ( 5.5 trillion dollar debt for example )

* private companies still want to collect every cent possible

* China is still ambitious

So....where does it lead????..It depends on:

* how far is China willing to go for dominant position i the hemisphere. Will it go for futher devaluation of jyuan? It can do it, and if it does it on large scale ( say another 30% ) all stock indexes around it will remind the freezing point of water on centigrade scale.

* what is US of A willing to do to pervent Chinas dominant role in SE Asia?

* Will the private institutions clean up their act? and how much capital are they willing to and can write off without going bancrupt?

That there will be a world wide crash is almost evident ( call it inflation, deflation, market correction or whatever ) . The dimensions of it and therefore the price of gold depends on three questions above.

Today, Im going to find an astrology discussion group, and post messages about gold investments.

Great news, if it came about. But how will they finance the gold purchases?

gold up------- silver down.......must be a new paradigm!

; ) ------------drum roll.................................

And why World Economic Forum at Davos, Jan 29 to Feb 3 is so intriguing, particularly this year.

This gathering of the great is analogous to the English coffeehouse of the 18th century ( where Lloyds came into being ) albeit on a grander scale. If we work very hard, pull together, we might just be able to
glean some interesting information for ourselves and our casue ( s ) .

http://www.weforum.org/

Come on Korea, Gold is going up, sell some more Gold and push it back down.
Screw yourselves even more and sell the only asset that you have, that could save your a$$es in the end.
What are you waiting for Korea, sell all your Gold......

SDR
Folly, Frenzy and Fear, those Careless are
The fates that mould our destinies, and shape
The grave dishonesties, deceits, that mar
Our work, our very loves, our art
Stir the dark anxieties, the mortal pains
The dark and deadly pride that stains
The living dying heart.

We mime the random measure of their art
Act out the torment of their aimless play
Suffer all things with numb unfeeling heart
The less their willful torment day by day
Or wanton, toss to waste our life in play.

Only that man,
Who steadfast stands apart
And cries his manhood, cries aloud - I AM
Will be free of such dire fates
Only thus be saved,
Be his own man.

~~~~~~~~~
Lobengula
They could always use derivatives.
( :o}}}}}}}}

Southeast Asian Cuurencies Begin 1998 SHARPLY DOWN!

Maylasian, Indonesian & Thailand Currencies Plummeting... AGAIN

Monday, 6 January 1998: Southeast Asian Markets Continue to be POUNDED DOWN - THE DOMINOS CONTINUE TO FALL.

John Kutyn is undoubtedly one of last years most brilliant and perceptive analysts on the Domino Effect sweeping through Southeast Asia. His insightful take on currency chaos and stock market turmoil paint a grim picture of what the new year holds for the countries of that area... indeed what the ramifications are for the rest of the world. Following are a few of his random thoughts on the region. Additionally, he shares his opinion of the precarious condition of the Japanese Banking System, and what we might brace ourselves for in 1998.
http://www.gold-eagle.com/gold_digest_98/kutyn010198.html

Vronsky
I received an email from you today.
Strange thing is it didn't have my address on it.
It was addressed to:
AlanGreenspan@FRB.washington.dc

Crossed wires or what?

Wakes in the morning, adjusts his glasses, and looks at the price of Gold

Without much change, he goes back to sleep.

With much change, he gives a speech.

Weekends, he takes a break.

farfel: Ok we understand each other's view of Perception Change and we will have to give it the "ol empiricle" and see who is more correct in the next few years. With regard to the shortage of Maple Leafs in Toronto I can tell you 2 things. First it is not unusual to have problems finding them in Toronto in January. Typically they are given as Christmas gifts to new-borns and they run out of them annually. Second the Royal Canaddian Mint is busy turning out coins celebrating the Chinese New Year--you heard right, I just live here.

And the truth is that: All of our money is counterfeit. It is all artificial, false. It is all an imitation, made to deceive. And that is what this book is all about.

So our money was to be gold and silver coin. In the coinage act of 1792 they stipulated that the unit or dollar of our money was to be a certain weight of silver. ( The dictionary, incidentally, defines unit as a stipulated amount to be used as a standard. ) The gold coins of five, ten and twenty dollars ( the so-called half-eagles, eagles, and double eagles ) would contain gold having the value of five, or ten, or twenty standard units ( i.e. dollars ) or silver. In 1834, cognizant the values of silver and gold relative to one another had altered, Congress changed the amount of gold in the gold coins to make them conform to the standard unit ( dollar! ) of silver. In 1873, the standard unit was redefined as an amount of gold.. The silver coins did not equal the gold in value, but as a dollar of silver could be exchanged for a dollar of gold at the bank, it was not thought to be a matter of particular importance. However, in 1933, we were taken off the gold standard, and the citizens were told that it was a serious federal crime to remain in possession of their own gold. The government at about the same time changed the standard for the dollar to about half as much gold, but for Americans it was academic, as gold ownership was not permitted them. Silver coins were withdrawn from circulation in 1964, and redemption of silver certificates ceased in 1968. Congress has named no replacement for the gold and silver coins, and could hardly do so in view of the utter clarity of the Constitution in prescribing them as our money. Thus we are left with slugs and non-redeemable bills, and the term dollar has, of necessity, become meaningless as a term of money measurement when there is no money. The dollar, in truth, is a fiction of law.
Hein, All Work and No Pay

So--My statement was simply an affirmation of my basic agreement with the
good Doctor!

Sharefin@Beauty.for.sharing --Thanks! I needed that!

From January 5, 1998 Federal Computer Week:
"It's too late to concentrate on overall compliance of your information technology enterprise - the fact is, there will be problems and issues regardless of the strength of your overall approach and how long your plan has been in place.

http://www.fcw.com/pubs/fcw/1998/0105/fcw-opedkrsh-01-05-97.htm

See a few posts prior to yours re: WSJ "optimum price of gold" article.

But I still don't see that the Greenspan article was posted here ( or did I
miss that one too ! ) , Can someone post that one please ?

fundaMETAL

I agree with you 100%. y2k will be the triggger. We will start having problems by spring 1999.

Dow down 81. The curve looks steep.

I sure wish someone could forecast GOLD ??

Well it looks like we got to 7800 pretty quick ( may be there by the time I post this ) . What next??? Let us look around and see what we can see.

Brazil Bovespa Index ^BVSP 10:55AM 9985 -200 -1.96%
Canada TSE 300 Composite ^TSE 10:56AM 6616.10 -40.16 -0.60%
Chile IGPA ^IGPA 4724.20 -59.04 -1.23%
Mexico IPC Index ^MXX 10:56AM 4956.060 -77.340 -1.54%
Peru Lima General ^IGRA 10:56AM 1748.11 -2.70 -0.15%
United States S&P 500 ^SPX 10:56AM 957.88 -8.70 -0.90%
Venezuela IBC ^IBC 10:56AM 8399.78 -139.17 -1.63%

Brazil seems to be telling the tale, and its not good. I thinks we are going lower. Look quickly and you will see 7800 passing by.

Bankers Trust down again today. Over $7 down last couple of days. Does Bankers Trust have another P&G problem?

For the little amount they will get for grandma sans old gold
bracelet, my guess is that they will hold. $100,000,000 ain't goin
to fix anything. BUT if gold should sky rocket , the poor b@#$'s
will have something to back up their currency. Get the gold
before it sky rockets, their population is more likely to be
patriotic at this level than later.

A.Goose
Go and have a look at the Russel 2000.
RUT.X on quote.com.
On a one minute chart it looks classic.
Not often you have an indice look like that.
Next it should get steeper?

Anyone have any knowledge or insight into the performance of Canyon Resources ( CAU ) over the past couple of months other than tax loss selling and low price of gold? They also recently had a small secondary offering ( dilutive at best ) . Can it possibly trade below $1 for all the proven reserves it has?

SDR
At least we have plastic.
If only I had ran my ten cards up to the maximum.
I could have bought $100k of puts.

Just imagine the profits.
Away to beat my head against the wall.
( :o}}}}}}}}

To all gold/silver ratio watchers -

The ratio HELD in the low 46's and is now back up to

47.25/1 - If it gets above 49/1, I foresee fireworks !!

A low gold/silver ratio is associated with INflationary

times ( late 1970s ) - Ratio went to 100 to 1 during

disinflationary 1980's. For example, I could live with

silver at 6$ and gold at 600$.

I dont understand the Korean jewelery drama. Is all

their stuff bullion grade ? - I dont believe it - are they

going to make 12 K bars with half copper ?? I dont

believe this is happening - What is the market for gold

alloy ?

Wow! Now that's a chart, Sharefin.

428.84 and falling.

The dipters and buying the DOW at 7814 to 782x. Hope they are having fun. It is heading down again, only they don't know it. 7800 is the next stop, but it isn't the end of the trip.

A great site with knowledgible, insiteful international experts on gold etc.
http://www3.techstocks.com/~wsapi/investor/Subject-15208

Pardon of already posted...but it seems that the SE Asia countries do not appreciate the "help" from the IMF...implications??


NEW YORK ( CNNfn ) - Southeast Asian countries
have begun to balk at fiscal targets set as condition
for economic bailouts from the International
Monetary Fund, sinking currencies and dashing
hopes for a quick fix to the region's problems.
Indonesian President Suharto presented a budget
to his country's parliament Tuesday that exceeds
restrictions he agreed to in order to receive a $38
billion bailout package in October.
Suharto failed to set a fiscal surplus of 1 percent
of Indonesia's gross domestic product for the
1998-1999 budget. Instead, Indonesia's plan would
produce a balanced budget.
The budget is also problematic because it
assumes that the country's currency, the rupiah, will
be trading at an optimistic rate of 4,000 to the U.S.
dollar.
The news spooked the region's currency market
even more. The rupiah was trading at 8,200 to the
dollar Wednesday, its lowest level ever, as the
budgetary changes raised pessimism among traders.
Some analysts questioned the original IMF
guidelines, saying they may have been unnecessarily
strict and used unrealistic assumptions.
Indonesia may not necessarily lose its financial aid
if it fails to meet its budgetary targets, however.
The IMF releases its loans in portions. Countries
that borrow money must go through a review
process each time, and the IMF may use discretion.
"In some cases, the view of the Fund will be 'this
is not so far short of what was agreed that the overall
strategy of the program is in jeopardy,'" said IMF
spokesman David Holly. Indonesia's next review is
scheduled for March 14.
Indonesia is not alone in its defiance of IMF
strictures. On Monday, Thailand called for a review
of the restrictions placed on it when it agreed to a
$17.2 billion loan package.
Thailand was the first domino to fall in Southeast
Asia when it devalued its currency, the baht, in July.
Since then it has plunged more than 50 percent.
On Wednesday, the baht fell to a record low on
loss of confidence in the country's recovery. The baht
was trading at 54.50 to the U.S. dollar.
Thai financial officials stepped in after the hit to
say that the central bank would intervene to curb
speculation in the baht. The government would
probably introduce further regulation to make it
harder for non-Thai interests to speculate on the
currency.
Jim O'Neill, currency economist with Goldman
Sachs, said international speculators may not be to
blame anymore for Southeast Asia's currency
problems.
"This seems to be driven by local investors," he
said. "Any foreign investor that wanted to get out is
out."
O'Neill said that Southeast Asian currencies are at
an extremely attractive level and that anyone who
buys them now probably will be happy with the
investment in six months.
South Korea's currency, the won, escaped the
region's turmoil Wednesday, trading at around 1,745
to the dollar.
However, South Korea also is looking for a little
wiggle room in the initial IMF targets. The two sides
currently are in talks to revise some of the financial
restrictions South Korea agreed to when it accepted
a $60 billion loan package.
The country's finance ministry said it would
attempt to lower forecasts for economic growth and
raise inflation limits.
Other currencies around the region incurred
collateral damage Wednesday after cracks appeared
in the IMF bailouts. Malaysia's ringgit fell to a new
low of 4.7250/350 to the dollar while Singapore's
dollar dropped to 1.7850 against the U.S. dollar.
The U.S. dollar fell back Wednesday after
reaching 5-1/2 year highs against the Japanese yen.
By early morning, the yen stood at 132.20 to the
dollar.

MIKE SHELLER: As usual your 7:19 posting was a model of brilliance, equanimity, humility, and gentility. Whether one is a believer in astrology or not, your respectful words bring honor to the art. Now, if only we could ALL disagree with such grace. It has often amazed me how worked up people on this site can get when they disagree. This is CYBERSPACE for Heaven's sake! It ain't real!!! My rule of thumb ( that I TRY to follow ) is, if I don't like a post I either ignore it or ask for clarification before disagreeing without rancor. It is REALLY easy to skip over posters who tend to irritate. Anyway, kudos again! Like Professor Vronsky, you are a consumate Gentleman and Scholar!

The image I've posted is copy of a fax I received that shows stats on the gold holdings of all the countries who have more than a few ounces. Enjoy.

TO Ted: Better check your side. ( almost ) Everybody else seems happy.

Here's something else I found in today's email for the nostalgia buffs:

Roosevelt's Executive Order, April 5th 1933

"By virtue of the authority vested in me by Section 5 ( B ) of the Act of

October 6, 1917, as amended by Section 2 of the Act of March 9, 1933..., in

which congress declared that a serious emergency exists, I as President, do

declare that the national emergency still exists; that the continued

private hoarding of gold and silver by subjects of the United States poses

a grave threat to the peace, equal justice, and well-being of the United

States; and that appropriate measures must be taken immediately to protect

the interests of our people."

"Therefore, pursuant to the above authority, I hereby proclaim that such

gold and silver holdings are prohibited, and that all such coin, bullion or

other possessions of gold and silver be tendered within fourteen days to

agents of the government of the United States for compensation at the

official price, in the legal tender of the Government. All safe deposit

boxes, in banks or financial institutions have been sealed, pending action

in the due course of the law. All sales or purchases or movements of such

gold within the borders of the United States and its territories, and all

foreign exchange transactions or movements of such metals across the border

are hereby prohibited."

"Your possession of these proscribed metals and/or your maintenance of a

safe-deposit box to store them is known to the government from bank and

insurance records. Therefore, be advised that your vault box must remain

sealed, and may only be opened in the presence of an agent of the Internal

Revenue Service."

Having been there, done that.. Asians DO NOT buy junk jewlery like us JOE 6 paks. It's mostly 18k to 100% gold bars of various sizes.

CB world gold holdings:

Bart, Shat Image?????

Wasn't the name of Jane & Chris' excellent trading adventure movie, "Rollerball"?

I mean What Image??

I would have fixed the brakes on his chair.

Get Camdesuss!

sharefin: Funny you should mention the LBMA as a way of pyramiding "virtual gold". Did you see my 00:29 post today? I think I finally understand what ANOTHER meant when he/she said that we gold bugs will not like our gold rally. I must admit that Allen ( USA ) was the closest to this of all of us. Now both ANOTHER and Dan McIlvany ( Jab 1998 newsletter ) have both stated that gold might skyrocket up hundreds of dollars in several days when all the CB gold loans, and producer forwards finally unravel ( gold corner ) .

To repeat my reasoning -- the countries of the world, and their central banks have tried al least three times this century to suppress the price of gold. Each time they suceeded for a few years, only to lose control, and the price of gold rises anyway. Most of this was done with simple gold sales, not with the amplifying effect of virtual ( derivative ) gold.

Now, however, the gold price is controlled by the central banks, and by the OTC gold market using derivatives. The explosive growth in the gold trading at the LBMA -- over 1000 tons a day, reflects this. Using a physics/engineering analogy, what has happened is that without selling one ounce of gold the price of gold can be manipulated -- the stimulus/response curve has been massively amplified.

What does this mean? We are now all trading virtual gold, which has been massively pyramided using derivatives, not the real gold the CB's used to use to suppress the value of gold. The logical consequence of this is that if we do have a gold "corner", this time the price of "virtual" gold could rise up hundreds of times faster than the real gold would have risen in the past before the CB's started paying with gold derivatives in a big way. ANOTHER was right after all -- we gold bugs may not like our next gold rally, because the price of gold may go up so fast that we not be able to see it rise!

Does anyone see the fallacy of my argument? Another ( no pun intended ) way of looking at this is that a derivatives expert may be able to estimate just how much "virtual/paper" gold is being traded out there. The virtual gold pyramid must be many times the value of real gold assets. We will be able to get a lower estimate of how much the real gold price will rise by the ratio of ( virtual gold ) / ( real gold ) . It might be a real eye-opener! Then when the gold corner arrives, we might have some idea of what to expect.

If I am right about this -- and we have an explosive gold corner -- afterwards, the US dollar and real gold will never be the same again.

I have read that numismatics were exempted from the April 5, 1933 confiscation order. Was this also true of all jewelry? As it is a tried and true method of preventing one from saving another store of value than the dollar, one suspects it may be used again if confidence in the dollar wanes.

Given the specious nature of the pronouncement, he really should have made it on April Fool's Day.

Brazil Bovespa Index ^BVSP 12:03PM 9898 -287 -2.82%
Canada TSE 300 Composite ^TSE 12:04PM 6603.60 -52.66 -0.79%
Chile IGPA ^IGPA 12:04PM 4717.77 -65.47 -1.37%
Mexico IPC Index ^MXX 12:04PM 4907.510 -125.890 -2.50%
Peru Lima General ^IGRA 12:04PM 1740.78 -10.03 -0.57%
United States S&P 500 ^SPX 12:04PM 956.56 -10.02 -1.04%
Venezuela IBC ^IBC 12:03PM 8347.81 -191.14 -2.24%

All these indexes are down from my last posting.

In November 1995 Robert Leuver, head for many years of the Bureau of Engraving & Print in Washington, and now head of the American Numismatic Association said that it was not physically possible to print enough extra money to replace the US money supply.
Right now BEP runs 24 hours a day. There is no excess capacity.
BEP has about 34 presses, which are manufactured in Germany and are sold through Switzerland to sovereign nations. BEP prints about 9 billion currency notes a year. Almost 50% are $1 bills.
Leuver says that in a crisis the BEP could run paper through offset presses and add zeros. Very few $50 and $100 bills are being printed today: 4% of the currency in each case. People cant maintain payments with $500 or $5000 bills unless we have mass inflation. In that case, todays bills will circulate at a premium: "real money".
The paper used in US currency is special. It is produced by only one firm. The BEP cant just order up to 10 times as much paper. It cant install 5 new plants in a few weeks. There are physical limitations on what it can do.
There is no way that the Federal government could supply enough currency in a emergency to carry on normal business.
Most of the money in circulation is made up of ones and fives. There is no way to supply higher denomination bills during a bank run, and no way to meet the demand with only ones and fives. The BEP is operating at capacity, in a maintnace mode. It cannot respond to an overnight demand for vast supplies of cash.
Some have always said: "The Fed will simply create cash to keep banks open" The key is not what the Federal Reserve wants to do in a bank run. The key is what BEP is capable of doing.
Nobody really knows what money is anymore. M1, M2? The fiduciary forms ( M1,M2, MX ) of money are all abstractions, all based on banks. Furthermore, just about everything has been monetized and linked together -derivatives. It is a series of promises to pay that must be broken in a panic: massive bankrupcy.
In the transition period from fractional reserve banking to whatever replaces it, cash will be king ( than gold and silver in a reconstruction period ) . Gold and silver will be used in large , organized markets. For a time there may not be any large organized markets.
The public says what money is. People accept cash, they recognize it. You dont have to explain it. MOST people wont and dont have silver and gold. You may have to explain to most people what a gold coin is. These coins are so unfamiliar to most that they will serve as money only when there are developed markets. In the interim, fiat money will be king. Cash is money. In a complete crash, none of the Ms will be money except the cash component. For daily transactions coins and small bills will be used.
A rush to cash means a shrinking of the structure of production, That means recession/depression. As people get confused and scared, they seek to buy the most marketable commodity: money. We get the downward spiral;: more demand for cash, lower prices, more confusion, more demand for cash.
When the stock market breaks, we will see a cascade effect.
Here is what may take place.
It will hit the stock market first. Stocks will fall as people sell out ( See Michael Eisner )
Smart money will move into bonds ( W. Buffet )
Long rates will drop.
Mortgage rates will drop.
From bonds , money will move to T-bills, CDs, MM funds
Money will move into savings and checking accounts.
From these money will move into cash.
It maybe chaotic.
When the stock meltdown occurs, all those financial institutions will face the day of reckoning. They will have to but back the puts at the agreed price. They will go bankrupt. At that point, we will see the beginning
of the end.
When the banks close, the entire structure of prices will change, overnight. When people cant get access to their money, they will not be able to pay.
The longer the crisis continues, the greater discounts for cash. We will see, almost overnight, the greatest transfer of wealth in peacetime in this century. It will flow from financial wealth to consumable wealth.
Gold is a commodity. So is silver. In a depression their value will drop. It may take a lot of time before gold is perceived by the PUBLIC as money. It will be used for large purchases.
Silver coins maybe. But how many people know that a silver dime is worth 4 times what a clad dime is worth? Not many. So in the initial stage of deflation cash will be king.

Adopted from Gary North's monthly newsletter.

The first shudders of dread are becoming evident as the well conditioned and
comfortable western psyche of Joe Public begins to perceive the seriousness of the
Worlds financial situation. The cries of those who saw this Wolf approaching as long
as 30 years ago were lost in the thunderous sound of all those easy-money Bulls
stampeding on Wall street. Now it is clear that the wolf ( or should I say Bear ) is at the
door. The Big question for us Goldbugs is ...Will the Big Yella resume its ancient safe
haven role? As we are very much creatures of habit I am betting it will. To me Golds
long hibernation is just about over and I find Golds technical action of late at least
encouraging.

FWIW ABX gave a buy signal ,16 15/16 stop

Allen ( USA ) : Any comments on my "virtual gold" pyramiding posts? I think you really were the most successful in unraveling ANOTHERS mysterious comments about the relationship between gold and the dollar. If the CB's lose control of the gold derivatives market, I think we will have the explosive gold rally that ANOTHER was warning us about. It sounded unbelievable at the time. Now -- I am not so sure. It is just a matter of how much more "virtual gold" is out there, relative to the amount of "real gold".

JTF
Seems like the same problem that many equities would face if their holding were sold.
Imagine every one trying to get $120 for MSFT.
Absolutely impossible.
I saw somewhere that the Mkt cap of Coke was greater than the sum of the French share market.
As in all investments the holder of the paper wins or loses.
Maybe it's the banks turn to lose.
Sometimes it's the house who loses.
Who really knows?
So long as there are buyers and sellers.
The game continues.

ALL_Since inflation is strictly a monetary phenomenon consider the following:

-most countries are increasing their M3 in excess of 10%, while many are printing above 20%

-Japan is expanding their M3 base at an incredible rate of 1% per day!!! for the last few weeks ( the YEN is going a lot further down against the $ since US printing rate is still less the BOJ's )

-US M3 expansion is now running at around 10% and increasing!!

THEREFORE, if the supply of the fiat money is going up faster ( actually a lot faster ) than the supply of real assets ( GNP ) , then one can very roughly estimate the TRUE inflation rate as follows:

US TRUE inflation rate is therefore M3 growth rate - GNP growth rate ( 10%-2.5% ) and we get a number of 7.5% !!!

Now consider the fact that the US M3 growth rate is accelerating since the presses must run overtime to satisfy the need to manipulate/save the world's monetary&paper markets and you can see where US inflation is headed. UP!UP!UP!UP!

Conclusion: Buy gold/gold shares. The historical inflation adjusted gold price is now at $425.

Frank Veneroso estimates that gold price should be at about $600 to bring to gold market to equilibrium due to the 8,000 ton shortfall.

"...by SUBJECTS of the United States..."!!!!!!

That should have opened their eyes!

Also, would like to take this opportunity to thank you for
this board. You are performing a public service of a rare
and special kind. We all thank you.
Cordially,
SDRer_A

You are absolutely right to draw attention to the "explosive" potential of a massive gold price move. The sequence of events in 1980 showed us all that if you were not invested when gold was out of favour, you would not manage to get invested on the way up. In Far Eastern trading we saw bullion move $100 IN AN HOUR. Gold mining stocks normally move 3-5 times the percentage move of gold----you could not buy anything in any size whatsoever, completely stuffing those who had decided to wait until they were sure the market had clearly turned.

Gold mining shares were the 1980 "virtual gold"--the moral being that you may have to suffer a bit first but, eventually, if you have the guts and the money, the potential gains are incredible. Its been a long time coming, and I feel sorry for those who are stale bulls, but the writing is on the wall: buy low, sell high and when the ducks quack, you must feed them.

http://www.usagold.com/Daily%20Quotes

Shek: It will probably be like a snowball type of thing. It will start with earnings being hurt here due to Y2K remediation and hurt there and then everywhere. I recently read somplace that the SEC is now requiring companies to make comments about their Y2K exposure, probably in their annual reports. The Y2K effect on earnings will be understated, of course, but it's going to open some eyes. I'm watching for two things: Articles on earnings hurt by Y2K remediation efforts and an increase in the awareness of this situation on this board by those that follow the stock market.

All: Where did the news about the lowered earnings for those 3 US banks come from? Did someone hear that or read it? I have not been able to find any articles on the subject. I've personally seen CitiBank and BofA mentioned as banks having large exposure to Y2K and I'm wondering if the lowered earnings might be due, in part, to Y2K remediation efforts.

fundaMETAList

JTF, lobengula: The behavior you describe is more likely of market tops. What we should be seeing now or shortly is a nice quiet turn up after years and Years and YEARS of a bear market.

fundaMETAList

FundaMETAList,

Check out this article by Ed Yardeni.

http://www.yardeni.com/y2kreporter.html

Bart
I too, "THANK YOU" most graciously.
For allowing me the priveledge,
Of sharing your bandwidth.

Wednesday January 7, 11:35 am Eastern Time

Brazil shrs sharply lower, hit by declines abroad

SAO PAULO, Jan 7 ( Reuters ) - Brazilian shares were sharply lower in the early afternoon, weighed down by falling markets abroad amid
continued anxiety over Asia's financial stability, brokers said.

``We are still feeling the impact of nervousness in Asia and its effects worldwide,'' said a trader at Indusval brokerage.

The Bovespa index ( .BVSP ) of the 51 most traded stocks was down 2.46 percent, off 251 points, at 9,934 points at 1410 local/1610 GMT.

Market turnover was 368.9 million reais ( $332.3 million ) .

http://biz.yahoo.com/finance/980107/brazil_shrs_sharply__1.html

Of course it has already headed lower:

Brazil Bovespa Index ^BVSP 12:58PM 9829 -356 -3.49%

It looks like the shorts and longs are having a little fight today. Take a look at the action on gc8g. volume is better than I have seen in awhile. I don't think it looks good for gold shorts today. This may be the start for a nice little move. Don't you just love the smell of terfied gold bears in the morning.

fundaMETAList
I heard that the Australian Stock Exchange was going to introduce a new law.
To wit:
That all companies on the stock exchange must issue evidence that they are Y2K compliant to stay on the exchange.

I have not seen the facts merely heard the story.
I wonder the criteria that they will set?

They also ran a 1/2hr documentary on local tv about the subject tonight.
More and more they are voicing their concern.

Mike Sheller kicks off the New Year with both a warning list of potential hotspots around the world, as well as his campy tribute to magazine horoscopes ( HEY-HEY, check out what the stars hold for YOU in 1998 ) . However, the serious business comes first, as he takes a look at some national horoscopes ( from Cambodia to the USA ) for some clues to future activities, which may affect the financial markets:
http://www.gold-eagle.com/gold_digest/astro123197.html

Donot worry my little sheep starving wolves donot kill fat little sheep.
The outflows are winning the war of the mutual fund mania as shares move
from strong hands to weak! For the second time in 69 years the poor have been lead down the path to the hungry wolves. My advice to all Mutual Fund Holders is, WOLVES LOVE TO DINE ON SHEEP AND THE FEAST IS ABOUT TO BEGIN!!!!!!!!

I was born 4 years before this order. I read it for the first time in
1960. It was just a document. But after 38 years of experience, it is hard to restrain myself. He knew that an American with gold in his pocket could not be stopped.This was an act of rape. He was nothing but a first class revovling SOB.That's all for now.

I know remediation costs are up -- my hourly rate as a programmer has risen 50% in the last four months without changing jobs. And even now I am considering a position in a different company which uses a different skillset ( one in shorter supply ) that will make that raise 100%. And after years of downsizing, rightsizing, RIFs and general mainframer-abuse, I say show me the money! For the pointy-haired-managers of the world and their idiotic fanatasies about replacing IBM big-iron and its attendant geeks with client-server and PC weenies, I'll be backing up my U-haul rental truck to your bank vaults and shoveling bullion with a backhoe! You want 10 years of maintenance done in two years, with the corresponding rise in stress levels, missing family time, and lack of sleep? Open your wallet. The dinosaurs are back, and boy are we hungry.

I don't get it, someone, somewhere must have put the squeeze on Korea to pry physical gold out of the little hands or else they wouldn't be allowed to play the paper money game any longer.
The Koreans need dollars to pay their loans so why do they not ask the population to sell dollars, this would boost their currency, right?

Is it coincidence that the day after Soros "advises" the new president there is a govermental request for the peoples gold ( a not inconsequential holding of 2,700 tons, equivalent to the Swiss central bank holding ) . Why was there not a request for the people to sell dollars, selling gold at a this cheap price is lunacy, they have obviously been forced into doing this.
It seems that if they were to sell dollars and buy gold they would be in much better shape. I think the merchant banks in Korea got caught up in the deceitful web of the gold derivative market and the LMBA always wanted the physical gold at all costs...this way they get it dirt cheap.

JTF:

The large amounts of derivative instruments in the system do add leverage but do not alter the equilibrium price. What they do serve to do is to increase the speed at which price seeks its new level.

In the event that gold begins to move higher it may do so surprisingly fast. A good portion of the first leg may be accomplished in a few hours.

I do not believe their will ever be an effective corner in the gold market because the amount of gold in circulation is simply too large. Unlike other commodity markets which can be cornered by one or two players, a gold corner would require governmental kind of money. Additionally the price/demand elasticity for gold is not favorable. Huge price increases relative to the price of other goods and services in the world will bring out huge supplies. This is not say that gold could not double in value from these levels, but a squeeze resulting in $1000 gold seems out of the question. For these levels to be reached the price of all other goods and services in the economy would have to be skyrocketing. The only way this would occur is if there was hyperinflation in the US. While strong inflation is a possible outcome in the current environment, hyperinflation does not seem likely.

The price of goods, equities, etc are out of line. Gold by moving up in price would only be realizing its true price in relation to the previous items.

Just bought 100 more Philharmonic 1 oz 999.9% pure gold coins ( $297.85 ea. ) and a Dec. 99 270 put for $650. Downside risk is 11% and have until December 1999 for gold to trade above $304.35 oz. to break even.

Monex at 800-949-4653 ext. 2854 Art Levine beat Blanchards price by $7.00 oz. It doesn't get any better than this.

Call him what he was along with the rest of his ilk. A traitor, plain and simple.

A.GOOSE- some one posted this before

http://www.business.u-net.com/~mirage1/clox.htm

I got this neat little program. It really helps me with world time zones. You can have seven clocks on your computer that show the time in seven world times zones and label them with the city of your choice. You can get it for free.

Wednesday January 7, 9:28 am Eastern Time

Echo Bay Sees Charge for Restructuring; To Cut Jobs, Idle Mines

ECHO BAY MINES LTD. Sees $14M Charge for Restructuring to Improve Cash Flow

Jan. 6, 1998, Echo Bay Mines Ltd. ( AMEX:ECO - news ) said it will take an estimated charge of $14,000,000 against fourth quarter
1997 earnings for costs relating to actions it is taking in response to 18-year lows in the price of gold.

ECO said it is reducing the number of executive, administrative, and clerical staff based in the Denver corporate office by about 40%
to a total of 37 people and also said it is suspending, temporarily, operations at its Lupin gold mine in the Northwest Territories and
scaling back operations at its McCoy/Cove mine in Nevada, until the price of gold improves. Mining activities will be limited to the
higher-grade portions of the Cove open pit. Mining is being discontinued in the smaller, higher-cost McCoy pit. Remediation work on
the Cove pit wall is being postponed at least until the second half of 1998, pending an improvement in the gold price. There will be a
reduction of about 20% of the 450 employees at the site. ECO noted that Lupin and McCoy/Cove are its two highest-cost mines,
having operated at a loss for some time.

ECO stated that the temporary mothballing of Lupin and scale-back of operations at McCoy/Cove is expected to reduce 1998 cash
operating costs to $240 to $250 per ounce of gold produced, compared with its full-year 1997 target of $265-$275 per ounce. ECO
noted that total gold production is expected to be reduced by about 25%, or 175,000 ounces of gold per year, until gold prices
improve and that with the actions announced today, 1998 production targets are 500,000,000 to 525,000 ounces of gold and
7,000,000 to 8,000,000 ounces of silver.

ECO also plans to reduce its 1998 new project expenditures budget to $3,000,000 from $21,000,000 and its exploration budget to
$6,000,000 from $11,000,000, pending an increase in gold prices.

Together, ECO expects these actions to reduce 1998 cash expenditures by an estimated $30,000,000 to $35,000,000.

With the company's current gold hedge position, ECO said it will realize a minimum average of $338 per ounce for its entire planned
1998 gold production. ECO noted that the current cash value of its gold and silver hedge position is $51,000,000 ( $24,000,000 for
1998 and $27,000,000 for the years 1999-2002 ) , including $22,000,000 for an interest rate swap that approximately halves the
interest rate paid by the company on its $100,000,000 capital securities through March 2002.

ECO reported a loss of $0.74 per share, including a $0.55 per share charge, on revenues of $79,544,000 for the 1996 fourth quarter

Let me get this straight.
If I'm a taxpayer a bond issued by the government is an obligation by me and all of us to make good on this debt right?
So the stock market is about to crash so common "wisdom" says put it into bonds.....hmmm now I have just bought my own debt back?

What a ponzi scheme....nothing plus nothing always equals nothing.

Meanwhile the stockbrokers, bankers and gov. bureaucrats all take a cut as it spins through the system. Is there any beef left in the sandwhich?

The question is how long can such a fundamentally flawed system last before gaping holes open up...and the paper game collapses once again?

It's not if it is when.

D.A. - it is looking more like the 'fight' will resume until it's ( eventual? ) pattern making scenario concludes...and then we will see a true 'sell' siggy. I will own your winker before you own one of mine...maybe ;- ) .

Silver will act as Farfel ( i think it was farfel ) says. If gold doesn't get of it's hind quarters ( ass ) we will see some companies dumping SI to make some money ( or whatever they do ) . That 7.00-8.00 mark you seek may not happen....but, of course, we all know that. Admitted, this is one of the better chances. I still hold my SI spread ( paid for ) and am w/w for the rally to lengthen my profits. I will still consider putting on a new put spread on a rally. I believe I can turn it into a 'free' one anyway and wait to see what happens.

btw...

Thank you Farfel, you have added some good 'stuff' to this Kitco-clan. You are insightful and have a fun way of presenting your ideas. The hat is off.................. ( bowing ) ...

DentonTX....shame on you. Refer to Mike Shellers Disclaimer...... ( Mike?? could you reprint? I have lost it in my notes ) . Dent, do not git on the net and tell people how much money you lost by NOT doing your OWN homework and 'relying' on someone elses 'system' to make you lose money. Be responsible for your own follies with regards to 'investing' or 'speculating'. in other words.......quit crying.

All - I do not think that God, Guns, and Gold mix well. There is too much contradiction. And it gets a little too kooky and there are many other sites for kookiness. I am a secular gold guy...right George?

away...to await the rally........and the wink.

feelinit

Re Bart's post and earlier questions. Numismatic Gold coins were NOT confiscated in 1933, they were exempted. This is one of the primary reasons you want to consider "St Gaudens" and "Liberty" coins as your coins of choice.

Many have objected to the "premiums" for such coins, however, keep in mind that in a Gold bull market, the "premium" historically goes ub substantially faster than the price of Gold, thus giving you a larger gain and a mile form of safe leverage.

In Gold market declines, such as what we've seen the past few months, the "Saints" resist dropping below a certain level. Indeed, they have maintained their price with NO drop in value in the face of a $40 drop in Gold price from the $325 region or so.

"ST. Gaudens" are getting tough to find. I don't have a lot in Gold, but what I do have is exclusively in common date "Saints". They're not making any more of these coins, and they're getting tougher and tougher to come by. Supply and demand, and the added safety from confiscation, coupled with the leverage of the Numismatic value gives you several reasons to consider these.

watched the concluding segment on PBS re Cecil Rhodes and how he
conquered Africa at the turn of the century. Wasn't lobengula the African chief he dealt with ? I missed the first segment of the show but what I did see was fascinating.

D.A.: Your post makes sense -- all of the gold traded cannot be "virtual", given the diversity of the gold market. Physical gold must still play a major role in the actual price. And -- you would know how much physical gold volume is out there to be traded daily much better than I.

I do find your comment that the rate of rise could be very fast interesting, so part of what I am saying might still happen. But not ANOTHER's scenario of a total market meltdown if gold climbs to the stars. Also -- the CB's probably would never suddenly give up -- they just would let gold rise relatively slowly, and then try to shake out the "speculators". When do you plan to go back into the gold market? I am wondering if I should keep most of my powder dry until after the market correction, with the exception of silver.

fundaMETAList: I was not suggesting that we have a gold corner right now -- that is very unlikely. I would agree with you that the highest and most rapid rise in gold price might well be in the final blowoff of a gold corner.

maintenacne of a safety deposit box is known to the government by bank and INSURANCE records". My emphasis on the word insurance.
Several points; Back in 1933, what information was reported to the
govt. by insurance companies and is this why the concern over the
Y2000 bug because so many people will be "lost from the system overnight ". If we're not in the system, they cannot keep track of us, can they ?

Yet another reason for Numismatic Gold. Dealer is not required to report the sale or buyer below certain levels.

Yoy got it!!!. In my mind if things were objective, he would be also a first class candidate for Nuremburg, had he lived.

Great strategy !!!

Kiwi: I find your post intriquing. Bonds are supposed to be a place of safety during deflation, because interest rates should be dropping. But what if 1/3 to 1/2 of all the bonds are owned by foreigners, who decide to sell them? Then bonds are not that deflation hedge anymore, and interest rates could go up.

Short term notes and treasury bills sound safer, don't they?

The old rules about safety in buying bonds may not apply if too many of them have been created.

Hey dude, it's not Saturday ( I know this because it is the same day of my weekly bath.....whether I need it or not ) . Have you broken another self-imposed-ban to the GoldBugs? Shame on you :-^ ) .

away...to the grind



It's either $5K or $10K, I'll check tonight when I get home and repost.

Here's an area where there is indeed a Govt. bias against Gold and precious metals. The new capital gainds tax cut law, reduces rates on assets held over 18 months to 20% from 28%, but guess what? For GOLD and other PM's, even those that qualify for IRA's, the max. captital gains tax rate remains at 28% !!!!

Same holds true at lower income levels where 15% rate ultimately becomes 8% etc. for Equities, Real estate, etc , investors, only PM investors will ocntinue to be penalized with the higher rate ( for assets hels over 18 months, shorter duration capitla gains are all taxed at same higher rate )

A strong bias against Gold investors to penalize them for gains made in the metal ( which as we all know, are hard to come by as it is! )

Try using FULL TEXT......you moron.

away...to shake my head at people who live in Cape Knumbskull.



go abx.......DOH!

The exclusion of posts till Saturday, is in reference to editorial comment of a philosophical nature, and/or anything that could be construed as adversarial type commentary. I shall refrain from all such throughout the week. Posts of an "informative" nature are exempted.

See senate bill "LGB9801a" to determine that I am in full compliance with the law.

Shek: Thanks for the site. It's not on my list so I'll be sure to check it out.

sharefin: If the exchange does indeed make that a rule I predict 2 outcomes:

All companies on the exchange will be forced to determine their Y2K exposure ( finally ) .

A new cottage industry: Faking Y2K Compliance R Us

fundaMETAList

Ok country music fans around the world.Sing along now......

Testing..testing..two---eight---oh----

Seems...they can't push gold below......

They tried..and tried again..but it won't go...

Testing..testing..two---eight---oh....

: Yup, just a secular guy in a secular gold woirld.

aurator ww

Platinum up $8.00...love to see one of those $20.0 uptick finale's.

$280 does seem to be a strong support point. Makes it tempting for a "player" to start thinking Gold shares, particularly when said player believes Equities in general are headed substantially lower in the next few months. ( Gimme that DOW 6700 so I can get back in the game! )

Hep -- Right on. Feb gold now successfully testing 284. Next we should see 286-287 Feb basis. Silver hanging in there with a so far successful test of the 6.0 - 5.95. Don't let 'em break!

FWIW ABX target 17 1/2 or if not reached today ,tighten up the stop
17 1/4

Dollar and bonds undergoing a bit of 'profit taking' today. We'll just have to see the extent of it all. As for the S$P, much further drop and you'll have to hold your nose!

http://www.sec.gov/

It being Feb 08 down here already, and Country Music already mentioned, perhaps it is not too far off topic if I remind y'all that today is Elvis' birthday, oh yeah. It is also BJ's. B.J. just loved her Maple on a chain and Elvis says;

"I ain't nothing but a gold bug"


auratorswinginghiships@work_Oh_Yeeeeaaaahhhh

To light a fire under the gold price, is ABX or ECO to unravel their hedge positions. ie lock in a big profit for their shareholders and give a clear message to the market that they think gold id headed up. ABX is in a good position to do that, much better than buying back shares...

Rumors are Warren Buffet is selling all his bonds.

bonds have got to hold in here or another big selling wave could crush them

bond spreads are collapsing, Amen, Amen.Amen.

Clearly this is the worst day for 30 year bonds in 6 months.My impression is that MASS liquidation is occuring

I have gold Stocks and want to buy coins. Someone mentioned $20 Liberty. Any advice on price range for these or best place to buy? Thanks

sharefin: G'day, any news from old man on his bond position, Didn't he buy up large?

Just mentioned the dollar used to be backed by gold, silver coins. WHat?

I use Jefferson Coin and Bullion - 800-593-2585 - ASK for Russ Savage, solid, decent, honest fella. I use them exclusively.

FWIW

You boys missed the point. I wasn't crying because I lost money in the market in 1972. Shoot I lost more money than that listening to this site and the newsletters that I take. In fact that doesn't even bother me. What does though is when someone mixes a religious system with financial prognostication, thereby giving credibility to it.

I feel like many here that your religious beliefs are your own and do not necessarily play a part in what we are trying to do here. I will say something when I feel that someone does misquote the scriptures. I do believe that I have knowledge in that area and hate to see people misinformed. On gold I claim no knowledge whatsoever and look to this site for information gleaned by more knowledgeable people that myself.

I would feel that I had not serve you if I did not point out the astrology goes all the way back to the towel of Babel and has been used by many leader up to the present time. It is a false religion and has led many to their own destruction. Having use it myself I know what I believe about it.

I do believe that Mike has much to contribute without trying to sway us on his religious system.

Lets get back to the basics and try to understand what makes gold move in either direction. This is difficult enough it seems without this diversion. If you boys want to sell your system based on astrology then I will get me some rock and cast lots and give you the reading of the day. Hey, my system is simple and easy to use. Just close your eyes and let them fly.
Dennis

Take me out to the show.

Buy me some Gold shares and coins in a sack,

I don't think we'll ever look back.

So we'll root...root...root...for the Gold team,

And if we don't win whose to blame......

Cause it's one---two---three strikes yer out,

At the Old...Gold...Gaaaaaammmee..........

*****************************************************

Seriously though now.......yes,it does appear to have strong support

there.I don't think equities will crash,but they will not the happy

place to be in general in 1998.Gold and telecom is my bet..good luck!

Not THE Hepper....I get by with a little HEP from my friends........

Thanks. What do you think is a good buy at the moment.

I suppose there are two possibilties,

Collector's coins which command a premium over their Gold content and coins that are simply related to the gold price eg Krugerrands.

Your advice appreciated

Aurator
Don't know.

Tis the season for whipsaw.
Ouch my saw neck.
Looking over ones shoulder when surfin the Tsunami.


Just caught this one on Avid
~ ~ ~ ~ ~ ~
I know I am taking a wild stab here but today could be a major commodity bottom. Look at all the charts. I would buy commodities and place stops below todays lows, copper, gold, oil, natural gas, heating oil, lumber, corn, soybeans, wheat. I am going to take a shot here and buy across the board.bbl

You said a mouthful! The next 24 months are going to be very interesting!!! I worked in Rochester, NY about ten years ago. They called me and want to pay me about three times my previous salary to come back!

Denton -- What makes the price move? Price does! The lower the price, the less investor demand. Now start sending it higher and watch those same investors get aboard, driving further price increases. No different than any other markets. The question then becomes, 'what initiates the first decent move up that generates that investor interest'. Quite a circle jerk, ain't it?

the BOND-BOMB has gone off........you were warned......

my june 112 bond puts are kicking butt! donald_a is the man!!
how about-it sdr-er---how're those 116 puts doing?!; )

WHO SAID the asian contagion would not impact our shores? WHO???
what frigging politico-economist-new-age-wacko smiled and denied
the implications? gold is so close....very close to being set-free
from its' taskmasters.........it is un-raveling and bald-headed al
is fixing to blow everybodies minds!!

the paper-tsunami has hit the us shore-line......casualties are
mounting.....the damage to the economical infra-structure is
catastrophic.......another possibly larger wave is expected
from asia as the paper-for-lunch-bunch choke en-masse on their
almost exclusive diet of poisonous, ink laden cellulose......

soon to be at your local hazardous waste disposal site.......

look at the VOLATILITY IN ALL THE PAPER! VOLATILITY IN ALL PAPER--
time for another bond-bomb-------

-the sky has fallen and the bond-bomb detonated.....allaboard....

cherokee!; ) ---driver-of-the-smoke-signal---fatimm------ALLABOARD!

From a previous post, I remeber someone said that gold objects d'art were excluded from confiscation. As a custom goldsmith/artist I will cast your fine gold into a unique Steven Pollack original for $100 plus shipping.

I will work up some original designs for a variety of gold weights and post them on my website. Any interest?

Steve
http://www.familyjeweler.com

I read they only collected 10 tons.

I say this with conviction:

Ask Russ, tell him where you're at, he will not lead you astray.

There are many here who probably can better answer your question.

O'tay, now that is out of the way. I would buy bullion coins first, American pre 1933 coins next. Get a comfort level of each. If you buy silver, buy a bag of junk silver coins and let it sit. It ain't an investment, it is financial nuclear winter insurance.

Also look at Helvitias and Sovereigns - it is touch to cut up a one ounce bullion coin.

Last but not least, ask Russ.

I think it's a great time to buy. What do you guys think?

Talk of gold and silver brings out many other subjects. Post on this forum and you are bound to get a bloody lip once in a while. O'tay, in my case, more than once in a while. Alright, weekly. Would you believe daily.

Enjoy the fray. gulp, a shot of tequila to ya.

My take on ANOTHER ( THOUGHTS! ) posts is that ( probably ) the Saudi's made a move to gold quite some time ago. They had been content to use LBMA paper as a gold proxy, but found out that it was beginning to look more like any other commodities market ( to much paper, not enough gold ) . They then began to go for the physical.

These folks are not dumb. They recognize that the Oil/US$ playing field is destined to failure. They have thought about this for a while and figured out a way to stabilize the paper world using gold. They recognize that paper money is just a proxy for trading goods and services. It is a medium not an end. The problem is the medium is getting trashed, thus making for possibly severe difficulties for those whose wealth is too closely confined to the medium of paper. On the other hand they also recognize that paper is essential since it has good features which allow for world-wide development of economies, etc.

My understanding is that there are a number of scenerios which will play out at some speed before the final act of declaring a 'gold for oil' pricing policy. One of these is the crisis in Asia. If it goes to fast then they will throw the switch. ANOTHER used the figures 'oil for US$10 per Bbl or ( 0.001 ) ounce of gold per Bbl ( US$10,000 gold ) '. I had wondered about his use of that price level. Was it just for convenience sake that these numbers were quoted? Or is there something more here like a trigger level? We are seeing oil drop like a rock, now at US$16.90/Bbl. I wonder if the price drops to US$10 per Bbl what would happen???

Anyway, he seemed to indicate in the posts that 'paper gold', which includes the derivatives you are thinking about, will be 'burned'. It seems that he is thinking that this oil producing state will simply declare a new pricing policy in gold and THAT will completely destroy the paper gold markets.

There were some things written talking about a rapid rise in POG being another possible trigger for this 'oil price in gold' policy.
My sense is that he sees a sustained rise in POG to be indicative of contention over physical supplies which would precipitate this policy statement. Also ANOTHER mentioned in his last post ( s ) that if the POG stabilized 'over the next few weeks' ( starting mid Dec ) we could see this 'policy' happen. There was a word or two about sometime around Christmas or the new year. Also the indication that those who 'are waiting for the next delivery date' will be 'to late' ( Jan or Feb? ) .

From these statements it seemed imminent. We are seeing a very rapid deterioration in Asia. Oil is dropping. Gold has stabilized. We are into January.

What he has stated is plausible to me. Is it true? I don't know. But it seems clear that this policy declaration might literally come "out of the blue". A true external event to the markets. If it ever happens then it WILL be completely startling and WILL utterly transform the entire financial reality of this world-wide system.

It may even put a chock under the wheels of this run-away freight train. Maybe. When is Ramadan over???

ANOTHER ( THOUGHTS! ) will you speak with us again? Tell us what things are looking like from your vantage. Thanks.

Has there been or is there a correlation between longevity, degree of growth during a period of economic expansion and the depth of recession that would immediately follow the growth? In other words, does a severe recession normally follow an extensive and dramatic expansion period?

sharefin ( Avid chatter - YOUR Commentary, "Rumors are Warren Buffet is selling all his bonds. Bonds have got to hold in here or another big selling wave could crush them. Bond spreads are collapsing, Amen, Amen. Amen."

"Clearly this is the worst day for 30 year bonds in 6 months. My impression is that MASS liquidation is occurring."

Of course we cannot be sure Buffett is dumping his paper bonds, but for the moment let us assume it is indeed true. Since Buffett abandoned the stock market many months ago at higher levels, and since stock markets around the world are falling like dominos, it is HIGHLY UNLIKELY he would jump from the frying-pan into the fire. This does not beg the question, but SCREAMS it: WHERE WILL HE PARK ALL OF THOSE BILLIONS??????!

T-Bills immediately leap to mind. However, the rationale Buffett would be using to dump T-Bonds, must also apply in some degree to T-Bills, albeit for far shorter duration. Therefore, Buffett would most likely NOT put a major portion of his rapidly building cash position into MORE PAPER. Consequently, it is very difficult NOT TO CONCLUDE that the shrewd financial-fox is snapping up gold at 18-year lows, and gold mining stocks at multiple year lows.

HEY, he has NO OTHER ALTERNATIVE... unless, of course, he wants to vie with Mother Teresa for Vaticans next nomination for Sainthood by lending his billions to the very bankrupt Southeast Asian countries. This is hardly likely, as he would then be buried in class-action lawsuits from his shareholders, claiming senility and reckless abandoned use of company assets.

If the rumor Buffett is dumping his paper bonds surfaces as fact, rest assured the legendary shrewd financial-fox will have already stuffed his very deep-pockets with all the gold he can carry... and then some.

Hey Dork---when I'm having problems I can't access this site--PERIOD--so stick the "FULL TEXT" thingy up yer arse....Lakers SUK!...go gold!!

All, wish to buy Aussie gold stocks. Any suggestions?

STUDIO.R ( @All... ) ID#93232:
Has there been or is there a correlation between longevity,
degree of growth during a period of economic expansion and the depth of
recession that would immediately follow the growth? In other words,
does a severe recession normally follow an extensive and dramatic
expansion period?

_______________________________________________

The latest book by James Grant of Grant's Interest Rate Observer
deals with precisely those points in The Trouble With Prosperity [1996]
for 315 pages, basing his reasonings and presentation of evidence on
the musings of the obscure Austrian economist Wilhelm Ropke whose
insights and clarities dwelt on the seeds of ascendancies and
descendancies sown in the inverse, examining those mechanisms.


The title, The Trouble With Prosperity is a play on its contents.
The subtitle is The Loss of Fear, The Rise of Speculation, & The
Risk to American Savings.

Wednesday January 7, 3:15 pm Eastern Time

Fed's Meyer seen shedding light on deflation idea

WASHINGTON, Jan 7 ( Reuters ) - Federal Reserve Governor Laurence Meyer was expected to shed new light on the debate about the
possible dangers of deflation for the U.S. economy when he delivers his quarterly economic outlook on Thursday.

Fed Chairman Alan Greenspan last weekend devoted large parts of a speech to the American Economic Association in Chicago to the
dangers of a broad fall in prices. He declined to say whether he thought a cycle of deflation was imminent but warned it could be at
least as destabilizing as inflation.

Analysts noted that his remarks might hint that the central bank has shifted somewhat from its traditional obsession with the dangers
of inflation. But several Fed governors this week appeared to tone down the deflation talk by stressing that they were still very much
concerned about an uptick in inflation.

Meyer's fellow board member Susan Phillips, laying out her expectations for the current year in a speech in Chicago on Tuesday, said
U.S. inflation was subdued but continued to pose the key risk to the economy's seven-year old expansion.

Fed governor Edward Gramlich, in an interview with Reuters on Tuesday, also said it was unlikely the United States was at risk of
entering a cycle of falling prices.

In previous speeches, Meyer has repeatedly insisted that tight labor markets pose the biggest danger to the economy.

He is seen as one of the most inflation-wary members of the central bank's policy-setting council and is a firm believer in NAIRU, the
non-accelerating inflation rate of unemployment, which holds that inflation will rise if unemployment falls below a certain level.

Meyer has said NAIRU may have fallen to around 5.5 percent. U.S. unemployment is currently running at a 24-year low of 4.6
percent.

Fed policy makers next meet to discuss interest rates on Feb. 3-4 amid widespread expectations they will leave the key fed funds rate
unchanged at 5.5 percent, the level at which it has been since last March.

Most economists believe the financial crisis in Asia will tie the Fed's hands by dampening U.S. growth and keeping a lid on inflation
this year.

Meyer was scheduled to give the speech on his outlook for the economy to an audience at the Economic Strategy Institute in
Washington at noon EST ( 1700 GMT ) .

You did well. In the last 15 minutes you bought hand over fisk to move the Dow from ( roughly ) 7816 to 7902.

Be ready tomorrow. More opportunies will be available for your heroic efforts. But next time MAKE IT POSITIVE. -3.98 will not be tolerated.

Brazil Bovespa Index ^BVSP 2:15PM 9879 -306 -3.00%
Canada TSE 300 Composite ^TSE 4:22PM 6590.60 -65.66 -0.99%
Chile IGPA ^IGPA 4:22PM 4712.60 -70.64 -1.48%
Mexico IPC Index ^MXX 4:15PM 4942.910 -90.490 -1.80%
Peru Lima General ^IGRA 2:02PM 1730.87 -19.94 -1.14%
United States S&P 500 ^SPX 4:22PM 964.00 -2.58 -0.27%
Venezuela IBC ^IBC 1:27PM 8273.77 -265.18 -3.11%

Trouble is a brewing.

points, 30 yr bond at 5.793 %. Been trying to post this for 20 minutes.

According to Quote Com, the Dow was up 80 points in the last 20 minutes of trading and up 60 of that in the last 10 minutes. Sakakibara ( "Mr Yen", Japanese Finance Minister ) in Washington for "talks". Latest rumour is that an "agreement" has been reached to "do something" about Asian currencies. They certainly "did something" about the Yen!

Quote Com at http://www.quote.com/cgi-bin/jchart-form
( type "INDU" in if it isn't already there )

G'Day from Kalgoorlie,

Aye, I think it is a case of... "when they ( Soros ) has got you by the balls, you hearts and minds, and GOLD, will follow"...........

My friends, never underestimate the wounded animal. If you ever did any hunting you should know. Yes, the paper bull is wounded but it wont go "quietly into night". Kitco site is great and dangerous at the same time. Its great because it points to events and factors which are ignored ( many time purposely ) by other media, and these events will shape the future of financial market. Its dangerous because we easily fall into thinking that the market would react to these events right away and out wishful thinking takes over the reality. This euphoria may not be healthy to your financial well-being.

I just ran through the post from this morning predicting Dow falling 180 point, strong hands selling to weak hands, Gold starting its upswing. ( well, strong hands of today are mutual funds and they play it like a fiddle. Sell in the morning buy back the late afternoon. At the end of the day its a wash but they made money ) .

All those things will happen, however, not yet! Be patient, things are looking up but it will take longer until they are accepted by investors outside the goldbug comuninty. It wont surprise me if gold slides down some more ( though 280 support did good in the last couple of days ) and Dow goes over 9000 again. Weve been through this more than once, so if you can, just hold on. The time will come, its just not here ( yet ) . $US better drops more ( much more that it did today ) to start this rally.

Something happened in many markets today and "astute" traders and investors did notice!

This is the last reminder and let's talk about it in 6 months!!!

HERE IT IS, READ CAREFULLY!

The most severe inflationnary periods always occur when it seems to be under control. In the current deflationary talks and rumors when the media, analysts, average people and even the so called shrewd investors stating their opinions and reasons of a current deflationary outcome makes me believe that we are already in an inflationay mode which will continue to intensify in very subtle way.

Really, when such a consensus is reached by almost "everybody" that deflation is knocking at our doors, it is a fantastic and explosive opportunity for only a minority of traders and investors to realize that "everybody" is becoming complacent about what they believe is taking place and it's time to look in the opposite direction.

Nothing is what it seems to be and always beware of the obvious!

To me, too many people from every walks of life now agree on deflation. It is the perfect and most favorable environment for inflation!

Most commodities have now also reacted to the deflationary analysis, rumors and opinions. In a few weeks at the most, they will slowly start to move up and leave behind the majority of people who will continue to bet on the downside.

G'Day from Kalgoorlie,

Aussie gold stock, when compared to North American stocks, are cheap. With a bit of research, there are some very good buys.

You may wish to check out the following:

1. J Gutnicks companies, in particular Johnson's Well Mining

http://www.ausgold.com/index.html

2. Local "gossip" via

http://www.hotcopper.com.au/Default.htm

3. Australian Stock Brokers via

http://www.minmet.com.au/links7.html

4. Ongoing stock, exploration and mining news via

http://www.oberon.com.au/Paydirt_Online/index.html

5. Australia Stock Exchange via

http://www.asx.com.au/

6. General Aussie exploration and mining scene

http://goldsheet.simplenet.com/

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

Gold is key or the big boys would'nt mess with it. When the little boys
find out it's key---WOW. A matter of merchandising. You show a concept
that has a lot of potential. email me and maybe we can refine it into
facts. Thanx. email is devoto@w3link.com Happy hunting.

Just off the phone with a tired "bear" who laments the dramatic buyback in the Dow today. He is at the end of his rope and is ready to join the bullish herd.

What is the mainstream perspective? CNBC spoke of the tremendous rally today as a harbinger of an even greater boom tomorrow.

You can see the glass is half-full or half-empty. It all depends on how you spin the perception.

The peripheral perspective asks, "Where is the much publicized January Effect?" The simple fact is that the Dow fell today...and has fallen consistently this early part of the month. What do these facts augur?

The peripheral perspective says that today, in a notably unusual development, the dollar fell, the bond market fell, and the Dow fell...the three imperative ingredients for a stampede to precious metals! In fact, lo and behold, gold and the XAU rose today ( also aided by one trading house making a dramatic about-face in its gold position ) .

The peripheral perspective asks, "Why is Fidelity afraid to reveal its mutual fund flow pattern to the public? What margin of cash is left in the mutual index funds? Did a hefty portion of it get used up today in order to create the "illusion of a rally?" What is the available, immediate liquidity in the mutual index funds?

Again, I ask the following salient question, "Why do gold producers and gold investors do such a lamentable job in spinning the peripheral perspective to Wall Street, the CB'S, and the American investor?

CHANGE THE PERCEPTION!

Today I bought 100 Philharmonic Coins for $297.35 ea. and a Dec. 99 270 put for $650. The Dec. 99 is not a very liquid market and could not get current quotes so I looked at yesterdays Dec. 98 270 puts and saw they were trading for $640. I then put in an offer for $650. or better to get a response and was filled immediately. Now the Dec. 98 and Dec. 99 have a year spread between them and I could not believe I got filled.


What is going on here? Why are Dec.98 and Dec. 99 puts selling at the same price? Did I pay to much?


100 Philarmonic Coins $297.35 ea. $29,735.
1 Dec. 270 99 put option ( 100 oz. ) 650.
$30,385. Total

My downside risk is now 11% and break even is $303.85 oz. until Dec. 1999

When gold rallies to the $340 area I should be able to pick up a Dec. 99 310 put for less than $400 and then I will have no downside risk plus a Dec. 99 310 put and a Dec. 99 270 put AND 100 OZ. GOLD.
I get paid if gold falls below $270. or rises over $310. and anything in the middle is a push. Hmmmmm What am I missing here?

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

Gold: Rose 4,110 troy ounces to 480,756

Silver: Fell 15,158 troy ounces to 110,604,972

Odds are increasing daily that Silver is now in a new "era" not seen for many years! People are now starting to get accustomed to the $6 area and if it succeeds to maintain this level, it will probably overshoot to much higher level ( probably higher than most expect ) before stablilizing around $7-$8 dollar until Gold gets out of the doldrums and then it will move up again. Look at your charts and see the difference with previous brief upward spikes! Things look different this time.

Aren't there other ways to get the funds capital numbers?

Maybe there is a large flow in IRA accounts to money market funds. Maybe gold? Mine went to gold but I could not discern an uptick after the transaction a few days ago. Sorry I missed yesterdays bottom but glad to be wrapped in my gold blanket.

The Hong Kong Oracle has given another insightful and perhaps even alarming prediction of what currency turmoil to expect in Asia during 1998. It is definitely NOT a pretty picture. Milhouse gives his considered opinion on most major currencies and GOLD.

Gold will be the major beneficiary of the increasing currency
volatility wrought by EMU and the drive to inflate which is
already underway in almost every country. The reason it will
benefit is because it is the only form of money which exists
outside the financial system. As such, it is the only truly effective hedge against inflation. Any method of hedging against inflation which exists within the financial system involves a payment risk. Also, even if your non-gold hedge is 100% effective, you simply end up with a larger quantity of paper.
http://www.gold-eagle.com/gold_digest_98/milhouse010598.html

Miro compares the Dow to a wounded animal, then points out that it always takes a wounded animal some time to expire. Moreover, the wounded animal never goes quiety into the night but puts up a fight for survival.

When I talk about changing the perception and gold producers/investors taking a more activist role, I am not simply talking about taking new approaches in extolling the virtues of gold ownership.

Above and beyond that, the gold producers/investors must actively prod the wounded animal into final submission...in fact, if they spin perceptions correctly, they can deal the animal a quick, fatal death blow before it has any chance to get up again.

In that sense, I take issue with Miro's analogy: he implies that the Dow
animal will continue struggling indefinitely until it collapses from exhaustion. That is only true if gold producers/investors stand by idly
and wait for the animal to die. Again, this is the problem with the entire gold industry...it is reactive, not pro-active.

I beleive the bottom is in for Canyon Resources at a buck a share. I have closely followed the company for the past few years, and am comfortable telling my own father to purchase at these prices.

Look at the price graph over the past three months. Since mid-November the price has been FLAT at just above $1 per share. Meanwhile gold steadily declined to today's $282/oz dragging down with it many of the other mining shares. Even year-end tax loss selling and the company's additional stock offering failed to crack the one-dollar level. My guess is that some institution has done the math and willing to buy all shares that come available at one to one & 1/16. The total shareholder's equity is ballpark $57 Million while the current market capitalization is only $41 Million.

Canyon is well protected against the currently low POG due to its forward sales in connection with European bank gold loans used to finance the construction costs of the California Brigg's mine that reached commercial production early last year. For the next three years a fair portion of production can be sold at $405 to $443/oz. The company's policy is to sell at spot prices ( which I applaud; to avoid the insidious effect that forward selling has on the POG ) , but circumstances worked out rather well by chance in this case. Canyon is well insulated from falling gold prices, but won't be overly punished by a run-up in POG.

After posting profits in Q2, the company reported a loss in Q3 due largely to retooling expenses to improve the performance of the tertiary crushers at the Brigg's mine. This will result in lowering the cash cost per oz. to ballpark $235/oz for future production.

Canyon expects to submit the EIS for their 8 Million oz McDonald project in Montana by mid-year. Expected cash cost per oz. is $175. With the re-election of a pro-mining Governor and an overwhelming defeat of of an anti-mining initiative on last year's ballot, the stage is set for the most favorable permitting atmosphere in memory for a mine of this size in Montana. Further, Canyon has a very good track record in Montana, having recently completed closure and reclamation at the Kendall mine, for which the company received the "Health of the Land" award from the Dept. of Interior. Environmental organizations typically win those awards, NOT mining companies. Well done!

Whoa...I just checked the chart and saw that Canyon traded briefly at 15/16. Perhaps I know nothing at all.... ( ! ) ?

For the time being, my personal aquisition of CAU is complete as of late December--barring an unforseen fire-sale on top of THIS fire-sale. I am now focusing my energies on converting my American greenbacks with their presently incredible purchasing power into physcal gold with its remarkable staying power. At these prices I am buying my lifetime supply of the yellow stuff...three orders thus far--started at $287/oz... 'Roo's, Leaf's, and Harmonickers. I'm actually hoping the price trend continues a bit to better facilitate my additional acquisitions. Buying ANY amount now rather than waiting for the ultimate bottom gives much peace of mind. I sleep better at night having established the start of my physical collection. I recommend this remedy to all insomniacs....

All that is gold does not glitter,
Not all those who wander are lost;
The old that is strong does not wither,
Deep roots are not reached by the frost.

Themissinglink: you can still get most of the numbers from Fidelity mutual fund home page, though the information is about 1-2 month old. It would require a bit of monitoring but it's all there
Go to
http://personal32.fidelity.com:80/funds/fund_data/fund_data.html

pick up any fund and it'll give you current net worth ( at this time from 11/30/1997 ) and holding which shows % of cash, equity, other convertibles, etc.

E.g. Fidelity Magellan has a net worth of $63billions with 6% in cash. This means that the fund holds about $3.5 billion in cash.

Today, despite the fact that Magellan is focused on technology stocks, and Nasdaq went down about 1%, the fund went down only 0.17%. This shows a heavy trading which came out just about right.
As I said, wounded bull won't give up easy!

site and there is an additional message there, that is not yet on the main board; How does that work ? Also, where is everyone ?

Was just on cnnbc & made 4 recos: Big cap--Newmont & placer Dome.

Med cap-- TVX & Kinross. I own Kinross & think it's a better bet than the lumbering behemoths. They have lots of cash & have recently made some srategic investments in promising jrs.

FWIW Tomorrow either go down through 280 or gold will bounce and try
to penetrate 284.50.Xau went for a ride to 70 and will test 68.
Stand aside.Go short or long what the dif?Happy trading

LGB, would you mind dropping me a line ? I have some questions I would like to ask you about silver. - TIA redoubt7@aol.com

If someone from Australia could convince the government and producers from selling gold forward, maybe we could get a little run going....
watching the Spot gold market go down everytime Australia opens up

I have rolled the dice

we have seen the lows

$10,000 would be nice

but only Cherokee knows

Come on dice, baby needs a new pair of shoes!

Allen ( USA ) : Thanks for your 15:17 post. After D.A.'s comments I think the situation is clear that "paper gold" does distort the gold market, and allow more rapid fluctuations, but does not amplify markedly the range of prices that gold can rise or fall, because a lot of physical metal is still traded. That is fortunate, because we have enough problems with inflated paper to worry about grossly inflated "paper gold" as well.

I'll freely admit to you that ANOTHER's thoughts drive me to distraction sometimes, because just as I think I know what he/she is getting at, he/she says something the I cannot comprehend. My guess is that is because we are only getting part of the story, and the rest ANOTHER does not know or is guessing.

It does make sense for the Saudis to want gold, as they are a very conservative group -- with a much higher tendency to gold buggishness than the average european. Non-Americans as a rule also see our American problems much better than we, so they know better than we that the dollar's days are numbered, unless we change our tune. I think it was one of the German Chancellors that said the Americans drove him to distraction, but we were the only Americans he had!

In retrospect I don't think we will have the gold price explosion that ANOTHER refers to where the price of gold rises hundreds of dollars in several days, despite all the derivatives trading, because we still do not have pure derivative only trading of gold. It will also be much harder to truly corner the gold market than the silver market. I think it was only attempted once in the last 100 years - Jay Gould?

Allen -- did you see sharefins post this AM about several SEAsian countries going on the gold standard by approximately April 1998? I think this is what we need to watch --- as country by country exits the "dollar standard". Logical for this to happen first in SEAsia given what they are going through. If I was from that part of the world, I would be buying gold as soon as I had a job again, and could afford it. Also -- as you say, we must be alert to a possible shortage in the physical supply. At these prices, it may not take much longer for the gold sellers to competely disappear.

Vronsky,
I follow your posts with interest ( as do many ) and while I may not be as optomistic as you on the POG in the near future, I would point out that the Korean government has asked its citizenry to donate their GOLD in order to buy US bucks and try to meet some of their debt obligations. Even more interesting was today's run on those same US dollars that Koreans are donating! If our government ( Canada ) were to ask for the same type of sacrifice, I would donate my gold LAST if at all. Gold can and will always be a liquid asset, irregardless of what the big cheeses at the CBs say! Keep on posting!

Mo in To

Dow/Gold Ratio = 27.93

Vertigo - tried to enter a long post about coins but my machine ( or this server ) sent it into hyperspace. Contact me and I'll try to give you some direction

Silverdolr@webtv.net

XAU/Spot Ratio = .247

Silver/Gold Ratio = 46.84

I found the attached article interesting but confusing.

http://biz.yahoo.com/finance/980107/belgium_gold_1.html

Could this practice of selling gold and then receiving a portion back from the EMI be part of the reason behind some European CB gold sales? Also does anyone know if this practice will continue once the EMU is formed in May.

The headline read: "Most Currency Futures Fell In '97;Yen, Australia Dollar Hardest Hit" do you think this may have something to do with them selling most of their gold reserves in Australia? HMMMMMM

Gene Inger correctly asserts that the growing strength of the US dollar will eventually come back to haunt the American economy. ...every upward tick in the Dollar puts more future pricing risk into the domestic manufacturing sector versus foreign market competition.

Overall Inger remains bearish on the stock market.
http://www.gold-eagle.com/gold_digest_98/inger010798.html

Has anyone here dealt with SW International Trading in Phoenix???? If so I would appreciate any comments.

Also, I see alot of talk here about buying the Philhormonic gold coins. Why, are they better than Maple leafs, Kuggerands etc.

The Austrain Pilharmoniker gold bullion coin is 999.9% pure gold and has a face value of 2000 Austrian Shillings ( $160.US ) . It has the highest face value of any coin minted and is the best selling coin in Europe. You can view this coin and others at:
http://www.goldline.co.uk/

Incredible! They could'nt even get into their safety dep boxes without the presence of a fed agent. And yet, the great majority of Americans sit in front of their TVs, fat & complacent, absorbing all the pap,trivia & propaganda, directed at them by a corporate/govt manipulated media & think that they are living in the greatest democracy in the history of mankind. Ignorance truly is bliss.

http://www.yahoo.com/headlines/980107/business/stories/dollar_2.html

As was once the case I belive commodities are once again stearing the marketplace. There was a time long ago, well not that long ago when the commodities market was a way of assessing the situation. With the current state of I dont know but have to say something in the Guru strata running att all ends of the spectrum as to what really is going on. CNN is running "Crisis in Asia" as a backdrop to their In Asian Economics programming. How tabloid can you get? With one WallStreet guru after another seeing the possibility of finally after 5 years getting it right it seems most people are leaving commodities out of the picture. I have found that there are more than one on this site that have thoughts along the same axis. Yet I wonder if, when the turn comes in aluminum, gold, copper etc, without assuming order of merit, how many will be there to get in quick. Not too many I think, yet then I might be out on my bike and its a strong headwind in the face....

Test, this is only a test. Please do not be alarmed. Proceed to the nearest bullion dealer and purchase gold before it is too late. Sorry no cash, checks or credit cards accepted.

All:

The events in SE Asia are coming to a crescendo. The currency of Indonesia has fallen another 20% tonight and is now down better than 75% from its levels of the summer. This kind of destruction of wealth is going to cause massive political upheaval and probably war if something is not done shortly.

For whatever reason the world has seen fit to stand by and allow a country of 190 million people to become economically isolated by letting their currency be destroyed. At these levels it is clear that the entire economy is bankrupt at least with respect to relationships with the outside world.

The total foreign debt of Indonesia is said to be on the order of $100 billion dollars. Since at these currency levels there is no possible way of servicing this debt, let alone paying it back the attention must now shift to who are the ones holding the debt. According to a piece at Morgan Stanley this morning the debt is held about 40% by European banks, 10 percent US, and 25% Japan with the rest spread out.

I believe that the Indonesians are allowing the currency to deteriorate to absurb levels so that they have a stronger negotiating position with the creditors. They can say that they are following the IMF prescription and yet throw up their hands in exasperation. When presented with the alternative of having their banking systems hammered by huge defaults or the rolling over of loans at favorable rates the creditor nations may opt for refinancing.

The US has been surprisingly silent on this affair but it may be because its banks have a relatively small exposure. 10 billion dollars would be an enormous hit but would not threaten the solvency of the big money center banks.

When it is all said and done the likely outcome is a massive printing of money. This money will be used to pay back the banks. We will probably see all sorts of new laws going forward to make sure this kind of thing does not occur again. It is becoming increasingly likely that there will be an emergence of commodity backed currencies in the emerging world.

These are very strange times indeed. Hopefully this will get sorted out without great bloodshed.

This is a seriously sick site. Sigh!

Indonesia's currency is being hit again tonight. However, I have concluded Indonesia's exceptional situation is warping my currency curve, and they are probably in paralysis over there, so even as their situation gets worse, it is having minimal effect on gold. If I back out the effects of the last few days in Indonesia, the world currencies aren't all that out of line with the price of gold. If this is true, gold is free to move either way. The next couple of days should tell the tale.

( Silver of a few cents in overseas trading, to around $6.10 last I looked. )

I can finally put in a post! Still can't read much though...

I read Wanniski's piece in the WSJ today on gold. I think it illustrates why we can never go back to a gold standard.... Here it is in cross fore format Jude vs Karlito....


Jude wrote:
Gold has once again superbly demonstrated its ability to
foreshadow changes in the general price level.

Karlitos response:
Actually, gold has been totally out of sync with the general
price level. Inflation continues to rise in the US, albeit at a
lower pace, the price of gold has fallen outright. Were
gold a true measure of the price level then as the price of
gold dropped from$800 to $280, the price level should
have made a similar drop if Jude is to be believed and
yet, the cpi has increased by just over 100% since 1980.


Then Jude wrote:
Modern central banking and the use of government debt as money has
eliminated golds utility as a medium of exchange and sharply reduced its
role as a store of value.

Karlitos response:
Just the point I have been trying to make here at Kitco for the past
several months. At least Jude is more of a realist about the current
status of gold.

The Jude wrote:
Should the gold price decline from that same optimum point, it signals a shortage of liquidity in the banking system. A shortage means the market is trying to finance sound transactions, but cannot. Now the Fed should buy bonds from the banks, supplying the needed liquidity. Otherwise, transactions that should be financed will not take place, initiating the process of economic decline called deflation.

Karlitos response:
This is where Jude loses it, its also points out why gold can no longer be used as a basis for making monetary policy. As gold slips its central bank moorings, its price can only drop. That, in turn, forces the Fed to be in a state of constantly trying to liquify the economy to keep the price of gold up. The result will surely be an acceleration of inflation. Secondly, such a policy rule puts the control of US monetary policy in the hands of the central banks of other countries. Why should the US Federal Reserve ease credit policy just because the Argintines decide that gold is a bad investment for them. That would be totally insane. Or better yet, why should the Fed tighten if the price of gold were to rise as a result of a short squeeze. Again, the result could
only be disasterous for the US economy.


Then Jude wrote
When the Reagan tax cuts increased the demand for liquidity that the Fed refused to supply, in early 1982 gold fell to $300 from its 1980 average of $600. The deflation produced the worst recession since the 1930s. The savings-and-loan industry, which had deployed the surplus liquidity of the 1970s in ever-riskier loans, collapsed under the deflations weight.

Karlitos repsonse:
Total nonsense. Gold peaked in the fall of 1980, its collapse had nothing to do with Reagan, or his tax cut. The economy was headed for a severe recession, the decline in the demand for all commodities is a part of any recession, thats what brought the price of gold down. Reagans tax cut actually gave gold a brief bounce in 1981 and into 1982. It was the Dole tax increase of 1982 that brought interest rates down, and allowed the economy to recover, putting a stake through the heart of gold.

If the drop in the price of gold created such a problem for the S&Ls why
did it not create a similar set of problems for the regular banking sector? The reason is simple: the problems of the S&Ls stemmed from the ill-conceived manner in which they were de-regulated in 1983.
Having worked on a number of S&L bankruptcies I think I can speak to this issue with some authority. The S&Ls went south because the Feds deregulated the asset side of their balance sheet while continuing to regulate the liability side. They guaranteed the deposits but let the
S&Ls loan their money wherever they wanted. Its a little like someone giving you $100 to go to Vegas and telling you that if you win, the winnings are all yours, but if y ou lose, Ill make your loses good again. Well a lot of the S&Ls made bad bets and the US taxpayer ended up bailing them out. The price of gold was totally irrelevant to this process.

Deflation in the 1980s? Not by a long shot, the pace of inflation slowed but the price level continued to rise. There was no deflation as was the case in the 1930s.


The Jude wrote:
Today gold is below $290, after having spent 1981 to 1996 in a range of $340 to $400. With this decline, gold has again shown that it can forecast deflationary pain. The worst has been felt in Asia, where the central banks added gobs of liquidity to the market in order to keep their currencies tied to the dollar in 1993-96. Why? The 1993 Clinton tax increase had caused a decline in the demand for dollar liquidity. When the Fed did not mop up the surplus, gold rose 10% in dollars, from $350 to around $385. The Asian banks were forced to push their reserves into uncollateralized bricks and mortar.

Karlitos response:

Someone should tell Jude that gold was above $450 for most of 1987 and the first half of 1988.

Asian central banks adding liquidity? The biggest threat to world economic stability today are the Hooverites running the central bank of Japan. They make the little old ladies of Threadneedle Street look downright expansive. Keynes, were he alive today, would have been scathing in his contempt for the Japanese central bank.

The Clinton tax increase pushed up the price of gold, oh give me a break. The Bush tax increase of 1990 was about 4 times greater in its revenue generation and came at a time when the economy was in decline and gold went south. The Clinton tax increase took the froth off the economy, pushed the budget into balance, and kept inflation from getting out of control. To argue that a modest tax increase creates a significant increase in the price of gold while ignoring a large tax increase that was followed by a decline in the price of gold seems selective at best.

How is it that a $35 rise in the price of gold in 1993 created chaos in Asia today when a $150 rise in 1986-8 only resulted in a boom in Asia? The Fed wasnt mopping up reserves then either Particularly since it was still offseting the ill-effects of the 1987 market crash. Again, Jude is being very selective in his economic history.


The Jude wrote:

Alas, when the markets here began to discount the tax cut enacted last summer, demand for dollar liquidity rose, but the Fed, again falling back to Phillips Curve thinking, was worried about rapid growth causing inflation. In refusing to supply the liquidity demanded, the Fed not only wiped out the 10%. It also initiated a new deflation, taking gold down past $350--which I believe is its optimal price, because it appears to roughly balance the interests of debtors and creditors--to below $300. In order to deflate with the dollar, the Asian central banks had to withdraw liquidity from the banks and all the surplus brick and mortar, or rather the shaky loans made to finance them, came crashing down.

Karlitos response:

First, the tax cut as a share of GDP hardly registars, total tax revunes as a share of GDP continue to rise, so wheres the cut?

Secondly, if the tax cut were real, it would have stimulated the US economy, pushing up the price of gold. Gold has fallen in price as more and more central banks are slowly abandoning the yellow metal as a reserve asset.


Jude wrote

The gains to be had for the whole world in formally stabilizing the dollar price of gold are so great that if we just get it at some point between $300 and $400, the adjustments would not be terribly unpleasant to anyone, even if the price were not exactly optimal.

Karlitos response:

Somewhere between $300 and $400, seems like an awfully wide margin for error, particularly when Jude just insisted that a $35 change in the price of gold set off the current chaos in asia.

Why $300, why not $3000, or maybe even $8000 as the good Mr. Puetz has forecasted? And why set the price of anything when there is a market to do it for you. This would end in tears just as attempts by central banks to peg their currencies to the US dollar also end in tears.

Given the realitve smallness of the gold market, pegging the dollar to gold would open up US monetary policy to manipulation by any central bank with large gold holdings, not something that is in the best long run economic interests of the US.


Then Jude wrote:

Once anchored in this fashion, the U.S. dollar would provide a reliable monetary guide to all other national currencies.
The global financial maelstroms of the last 30 years would give way to a new century of calm, of the kind the Bank of
England provided the world in the Pax Britannica of the 19th century.


Karlitos response

The world currency system is already anchored to the dollar. We already have Pax Americana. Returning to a gold standard would do nothing to help this situation and more than likely would greatly hurt it. What is needed are market reforms, and particularly banking reforms in Asia to clean up the mess that exists there.

January 7, 1998
Former L.A. Times executive gets 4-year prison term

LOS ANGELES ( Reuters ) - A former editorial business director of the Los Angeles Times who pleaded guilty to stealing nearly $800,000 from the newspaper was sentenced to four years in prison Wednesday.

Charles Boesch, who worked at the Times for 34 years before he was fired last July, was also ordered to pay $778,550 in restitution. Boesch pleaded guilty in December to one count of grand theft.

Prosecutors said Boesch stole the money by approving payments for freelance articles that were never published, then funneling the money into his own accounts.

Boesch, 53, allegedly gave some of the stolen money to his former son-in-law, Michael Wayne Coburn, who has pleaded no contest to charges stemming from the theft. Coburn, 27, faces up to three years in prison when he is sentenced April 7.

IMF = IMPROPERLY MANAGED FUNDS

FRB = FREQUENTLY REQUESTED BAILOUTS

CBs = CREDIT BROKERS

PMs = PITIFUL ME!

********* I AM JUST TRUYING TO "CHANGE THE PERCEPTION" **********

As a dealer for many years the best advice is not the price so much as the delivery....if I'am not going to deliver does $200.00 a oz. sound good to you......be carefull out there? KNOW YOUR DEALER REAL WELL then its easy PS BUY GOLD AND LOTS OF IT

During the last six months of currency chaos and stock market
havoc - both which continue as I speak - the average citizen of
the average country of this Southeast Asia, who had the foresight of converting his currency into GOLD, would now be about 76% RICHER - reflecting the average increase in gold's value in the five besieged paper currencies.

Five charts showing the explosive price rise in Asian currencies will indeed convince even the most skeptical that only GOLD is providing a safe harbor for local investors. The regional gold price trajectory is literally ORBITAL.

Regrettably, most Asians must RELEARN the universal and timeless truism: GOLD IS THE ULTIMATE STANDARD OF VALUE, and paper is just paper!
http://www.gold-eagle.com/gold_digest_98/oracle010798.html

Dammit Karlito, analytical, fact based, deductive reasoning, intellectually honest, historically accurate posts are NOT welcome here!

Havn't you figured that our by now? By the way, you're right on about Gold going the opoosite direction as inflation. When compared to most important goods, real estate, services, oil, etc. Gold has lost more like 70% to 90% of it's value since 1980, rather than the mere 50% that would be indicated by dollar/Gold ratio.

I know it's take roughly 10 times the number of ounces to buy the same house I live in, as in 1980.

Great post Karlito......

PRECIOUS METALS AUSTRALIA LIMITED

http://www.reflections.com.au/PMA/index.html

The Company's Windimurra Vanadium Project near Mt Magnet has

the potential to be the world's largest and lowest cost producer of this

strategic metal. Unfortunately, when the project was poised for

development in 1992, vanadium prices fell to their lowest levels in ten

years. The vanadium price has since tripled and has held above US$3/lb

of V2O5 ( vanadium pentoxide ) for four years, and the project is now under development as a jouint venture between PMA and Glencore AG of Switzerland.

A comparison with gold equivalent is:

...............................Actual Project............Gold Equivalent

Mineable Reserves..... 44 million tonnes.....44 million tonnes

Stripping Ratio.....12 ore/1 waste.....12 ore/1 waste

Grade in-situ.....0.56% V205.....3.6 g/tonne gold

MetalRese

I believe 99.999% pure is what you meant to say

D.A. - I couldn't agree with you more on your take on Indonesia. The Company I work for does a lot of business in Indonesia and needless to say things are not going well now.

What is interesting now is the blame game. A few months ago, the sentiment we heard was that Suharto and his crony capitalism was to blame for problems. Today the sentiment is that the IMF and the U.S. with its high dollar are to blame.

Defying the IMF and the US is the more politically astute way for Suharto to go as it'll show he'll stand up to the powers and force creditors to refinance.

We too pray it will be sorted out without bloodshed.

PRECIOUS METALS AUSTRALIA LIMITED

http://www.reflections.com.au/PMA/index.html

The Company's Windimurra Vanadium Project near Mt Magnet has
the potential to be the world's largest and lowest cost producer of this
strategic metal. Unfortunately, when the project was poised for
development in 1992, vanadium prices fell to their lowest levels in ten
years. The vanadium price has since tripled and has held above US$3/lb
of V2O5 ( vanadium pentoxide ) for four years, and the project is now under development as a jouint venture between PMA and Glencore AG of Switzerland.

A comparison with gold equivalent is:

...............................Actual Project............Gold Equivalent

Mineable Reserves..... 44 million tonnes.....44 million tonnes
Stripping Ratio.....12 ore/1 waste.....12 ore/1 waste
Grade in-situ.....0.56% V205.....3.6 g/tonne gold
MetalReserves.....543 million lbs.....V205 5 million oz gold
Operating Costs.....US$1.61/lb V205.....US$175/oz gold
Output.....3,700 tonnes V205/year.....77,000 oz gold/year

Whilst the current mineable reserve is 44 million tonnes, the geological resource is the order of 300 million tonnes. The bye products are iron oxide and titanium oxide. The iron oxide may be converted to PIg Iron in due course, and should this take place would result is in an increase value to the project the order of $2 billion dollars ( potential ) .

It's a RIPPER...............CHECK IT OUT via an Australian Broker:

http://www.minmet.com.au/links7.html


BUY, BUY, BUY.................

Aye, Haggis

Indonesia -6.7%
Philippines -5.2%
Hong Kong -3.8%

What a boring world!

Not on my coins. It's says 999.9!

FWIW Aside of the 280 and 284.5 breakout points.Xau shortterm are 69.5
and 70.3.The first 15 minutes will give a good handle which way we are
going.Things look to become very lively tomorrow.Happy trading and good night.

There is either great truth or great distortion in the gold market. If it is truth that we see in depressed prices, then gold has little value, especially in times of crisis. Somehow that doen't seem right. Perhaps there is great distortion. And maybe even a little manipulation. Hmm....

hey guys what do you think about PDG....cash costs around 220 and theyre hedged at 450 for a very long time......

Nearly all Asian markets being mercilessly pounded down - only the Nikkei hanging on by a thread held by the Bank of Japan. Gold soaring in all Southeast Asian currencies.

If you arbitrarily select dates for an investment category, you can make
anything look bad. If I arbitrarily measure stock market performance by selecting September 3, 1929 to September 3, 1954, I would
be forced to conclude that stocks were a horrible investment because they had returned nothing for 25 years. That's not objective, unbiased
or very smart.
However, judging from your posts, I have concluded that your criterion
for judging whether or not someone is objective, well-infomed and capable of sound reasoning is that they agree with you. Not exactly open
minded of you.

Bart -- Sorry to see the site having 'access' difficulties. Not good. What's the problem and how might we help? Just tell us.

D.A. -- Asian default; payoff 10 cents on the dollar; Sounds pretty damn rational to me! The question will be what kind of sovereignty they have left after the fact.

Feb gold should test 283.8 numbers I think. Probably tonight. Just watch for breakage. Those not yet in might get your feet wet with fairly close in stops. As I mentioned earlier, Mar silver would break with numbers below 5.95. On the upper side, it currently needs to break above the 6.13 - 6.15 area to begin to see the light of day. Unless breakage of 5.95 comes to pass, I consider silver to still be a GO!!

S&P/stocks made a very late day 'comeback'. Nothing new in what the paper hangers will do. But nothing has changed. Still have to watch for breakage of the important trendlines; Either up or down. So far it has worked between them. Stay in 'tuned'. My vote is for down. Tomorrow may be the day that 'speaks' in this regard. All then depends on what then happens Friday/Monday! Watch the currency sh_t too! Times may be changin'! HAR!

Grains are NOW time to buy!!! Perhaps a 'few' other items too!

Vronsky: Millhouses summary of what to expect in 1998 seems one of the best written articles I have ever seen about the currency crisis. It certainly pays off to have a "birds-eye view" from Hong Kong. He convincingly argues that Hong Kong will do well generally, but will do best if it floats it currency. His comments about the US dollar continuing to rally -- as well as the US market make sense -- but if the market continues to rally there is the markedly increased risk of a massive market crash, as AG well knows. Millhouse' argument that the SEAsia crisis was precipated by money leaving Europe due to worries about the ECU is also plausible. Perhaps it was a combination of the China devaluation and ECU fears that pushed the dollar up so much.

What didn't consciously occur to me, and clearly makes sense, is that the American politicians will want to deflate the US dollar to match the other deflated currencies, or enact protectionist laws in 1998. Both of these events will be inflationary.

Thanks again for making your excellent site available to us. It certainly complements the Kitco site!

come on guys...???

The Dollar, the Dollar, the Dollar............

The Crash of 1987 confronted YOUR US Government ( US is short for Useless ) with the question: Which do we consider more important - averting a recession OR preserving the value of the Dollar?

When it came to the CRUNCH, the ACTUAL response by YOUR US Government was unequivocal. By the middle of the second week after Black Monday, the Dollar was cut loose from its moorings, and by the end of the week the news was official - the Dollar moved obediently lower, and a second selling climax in the stock market did not take place. The mistake of 1929 had been avoided.

Now YOU can have a strong Dollar, but as things progress YOU will have a problem. International trade, by definition, is international. It takes two to tango..............or can't you dance!! An over-strong Dollar will cause YOU problems, or can't you see beyond today and the end of your nose?

GOLD is required within international trade to achieve a balance, and to keep the bastards honest! The Dollar cannot do this.

Aye, Haggis

Market Turmoil Raises Fears of Debt Moratorium
By Michael Richardson International Herald Tribune

SINGAPORE - Currencies in Indonesia, Thailand, Malaysia and
the Philippines tumbled to record lows Wednesday, bringing closer
the specter of large-scale corporate defaults and layoffs, and
dragging down stock markets from Southeast Asia to Europe and the Americas.

The currencies of the four countries have now hit record lows on
each of the trading days of the new year, with no end in sight,
despite signals from financial officials that they would intervene to
protect their currencies.

Analysts said that the downward spiral in currency values was
undermining confidence in the ability of governments to restore
stability.

''We have seen a major wave of foreign capital flight from Southeast
Asia,'' said Simon Ogus, chief economist for Asia in the Hong Kong
office of SBC Warburg Dillon Read. ''Now we are seeing domestic
capital flight. People just don't trust their policymakers in sorting this mess out.''

Some bankers and economists said that if the downward currency
spiral continued, Indonesia and Thailand - the region's two most
heavily indebted nations - might be forced to declare a moratorium
on repaying private-sector debts, which total more than $150
billion, to save many companies from going bust. Much of the
money is due to be repaid this year.

But other analysts said that as plunging local currencies made it
increasingly costly to repay dollar loans, companies were simply
refusing to honor their debts to Japanese, European and American
banks.

The banks could do little, they said, except negotiate easier
repayment terms because complex bankruptcy provisions in
Indonesia and Thailand make it very difficult for creditors to seize
assets.

''At current exchange rates, very few companies would even be
trying to pay their debts back,'' said Seema Desai, regional
economist for Schroder Securities Asia Ltd. ''It has become a
market-imposed debt moratorium. Creditors can either agree to roll
over their loans or face outright default.''

http://www.iht.com/IHT/TODAY/THU/FPAGE/turmoil.html

What is being destroyed this time, in addition to the lives of
millions, is the belief in paper. Noone yet realizes this, for it is faraway--exotic, subtle and yet, inexorable. As they fall, the fiats,
one after another, humankind will begin to question the "Pricers"
and the wisdom of ignoring value. IMHO

Karlita, LGB -- Yup. But yesterday will remain as something in the past. Today begins now. Today is now day zero ( 0 ) . Today is from where action towards the future starts from. Therefore, stop with the old BS and GET with it!

Doctors in Europe are prescribing a new medicine
which greatly enhances someone's memory.

It is called the "memory pill", soon to get FDA approval in USA.

For those who bad mouth the purchasing power of gold, a few of those
memory pills will do wonders.

... Taken for a week 3 times a day, will remind you that the DOW
peaked at around 1,000 in 1966 and did not break above this number for 14 years. Inflation averaged 8% over that period.

Get the pills! So recommends "Myrmidon"!

Thanks for the info. I was unaware of the enviro award. I have only followed the company for a couple months but liked what I read. As you stated, the flat stock price in the face of POG fluctuations is a good indicator. Any info regarding the company being purchased by a large cap company?

OK Nigel, here's my thought. Placer Dome should be great for a trading play. If you want it for a solid long term hold it is one of the strong mining outfits I would pick. I actually already own it at prices less than it is currently trading at. I currently am staying away from the smaller exploration type companies with weak staying power. Some may be good for a quick trade but in this environment most will have to go bust before the sustained rise in gold prices can occur. I'm not a big speculator anyway. Good luck. Thanks for an opportunity to post. I am kind of new here.

WHAT'S the DEAL HERE! Are we the only inflationists around here???

Damn! Everybody has bought in to this deflation stuff. Didn't they ever hear of Guttenburg? ( sp? ) Ooooopps! I forgot, we have computers now!

The highways are jammed with commuters going to work. Hmmm. I guess everyone is working for free? Doom and gloom everywhere! But guess what folks? Prices of SERVICE related industries have been doubling at roughly every ten years. This works out to about SEVEN PERCENT INFLATION PER YEAR. O.K. O.K. No one is listening...

To be totally un- P.C....

"I see, it all comes back to me now", said the blind man to the deaf wife as he spit in the wind...

Earnings surprises? Hmmm... What about all of those lovely stock options promised to the employees of those high tech/software firms?

Dooooooh! To quote my buddy, Homer..

Howdy Ted!

Good night all.............

Karlita -- Anchoring ANYTHING to the 'dollar' is like hanging a sheet out of the basket of a hot air balloon for an anchor! HAR! Be my guest! I'm sure that the rapidly approaching mountain is just an ILLusion.

Gold acted good today, crisis in Asia and gold went up! I don't believe gold will become worthless, every US$ the government creates finds a home somewhere in the world and right now people want the US$ to shelter their wealth via US bonds or just keep a pile of dollars under a mattress. People don't want dollars per say, what they want is a safe harbor for their capitol and right now they see the US$ and US Treas Debt as that safe harbor. Shake that perception and everything changes as capitol will transmute from US$ to something else. Gold has to be one of the preferred forms of capitol preservation if the US$ starts to lose its value. If you lost wealth via your nations currency and then have reason to believe that the US$ is going under too, gold will look very attractive.

All the "experts" I see on TV or selected in the press always assume that the US$ will never be challenged as a preserve for wealth, i.e.: become as undesirable as a Korean Wan or Indonesia Rupia, it is one of the givens in life as far as there concerned. This is like walking through a jungle with blinders on. Hey! I don't see any lions, tigers least of all any bears!! I for on am willing to think the unthinkable, the dollar will not keep it reserve currency status and will experience a very sever erosion of value sometime in the not to distance future.

Notice how the experts are talking about the dirty "D" word? They're not stupid, tell the masses not to worry about deflation and they will think about deflation, not inflation. Hummm, maybe they are stupid! The Authorities wish to assure the people that not everyone is going to die. If I heard that one as a gold bug I would think I'm one of the selected!

Bless the Fed They are going to save us from deflation by printing up lots of new dollars, US$ production is now showing up in the Fed.'s balance sheet, it can be seen in Barron's. With deflation coming to us from Asia, I would say that the American people would demand that the Fed would fight Deflation with every printing press at its command. Like the old USSR it seems the American Government too refuses to allow the bankruptcy of any major national institution no matter how corruptly it have been managed, this is not good for the dollar, the politicians are in control and all to many people are trusting politicians who can't think past the next election.

I notice that the devaluation of the Asian currencies are much commentated upon on CNBC and else where, no one really speculates on why, they just comment that the Won is pulling a 29 inch mercury column of vacuum and sucking in all the capitol it can to Korea. Never do they comment that exchange rates are no more than a best guess of what the ratio of Wan/US$ ( or You name it/US$ ) will be in the not to distance future by the currency players, of which central bank will inflate its money supply to worthlessness first with the US$ always the denominator of the formula ???/US$. What I question is where does it state that the US$ has to be in the denominator when calculating the value of other currencies? The worst nightmare scenario of Washington is to have the US$ removed from the denominator and placed in the numerator like it was with a gold standard. 20US$/one oz au. The ultimate problem is one of denominators and numerators and what goes where, no more and no less.

I'm reading Will Durant's " The Age of Reason Begins", it covers from 1550 to about 1630 in Europe. Nothing ever changes, the first line of defense of an indebted government is to inflate the money supply. This little trick was discovered thousands of years before the Spanish Armada sailed off to conquer England in 1588 but Phillip the II of Spain could figure out the scam himself even if he did not know what the Romans did to their coins. Its simple, when in trouble and you can't raise taxes, fake paying your bills and inflate as required. If there is one constant theme in history it's inflation cause by a government over its head in debts and impossible commitments. The peasants wont figure it out until the King is safe in his grave, but his kid can have a few problems later on. Lewis the XVI lost his head over his father's and grandfather's debts but then he and his wife did life the good life too. I think a new age of Reason will begin when people learn to value government less and gold more, we will see that day come in our lifetime. It will not be as easy a change on the country as the when people went from having faith in gold to government as they did in the 20th century. I'm a firm believer that history is not a spectator sport, we are all players in this game of life, there is much to learn by reading history. The dollar is going down and gold is going up and there are going to be a lot of pissed off people running around that are going to want heads to roll when they figure it all out. If you come across some money and are fortunate enough to be able to keep some of it, I would not bring it to the attention of the world in general. To live modestly and not draw attention to your wealth is a survival technique in times of trouble. Durant has such great tidbits of wisdom in his books, last night he offered this one to me: "A wise man keeps his thoughts to himself when surrounded by fools". No more investment advice from me to the fools. Those who get their news from Dan Rather instead of reading the likes of Durant, I'll will leave to there own destinies. They don't want to buy until something has gone up to near its top and wont sell until it has come down near its bottom. If you refuse to learn from others mistakes you will be doomed to learn from your own. I can not save the world from it self, a fool must suffer their follies. Those mutual funds look so yummy, an easy 30% a year forever and ever, just like Tokyo real estate.

" In the end they valued their security more than their liberty so they lost both" This is from Gibbons "The Rise and Fall of the Roman Empire" and could apply to the US. We have given away so many of our freedoms to Washington for worthless promises to protect us from our risks. " There is nothing new under the sun". That quote is from the Old testament in the Bible, I think it was in "Ecclesiastes". I have been doing a lot of reading lately, the TV is off in my house after CNBC stops its market coverage unless there is something good on A&E or TLC I'm reading.

I just don't see the "News" as news. I think to be successful in investing you have to get the big picture, Durant, Gibbons and history is a better source for today than CNBC, NBC, ABC, cBS et all.

The problem with your thesis is that it doesn't jive with reality.
The fact is that central bank gold reserves have been relatively stable
at about 33,000 tons for 28 years. Net central bank sales in 1997
were 350 tons--that's it. The problem is that you spend too much
time soaking up the hysterial rantings of the talking heads. Gold
is not being demonetized and the central banks aren't liquidating
their reserves. 60% of the monetary reserves are held by the U.S.,
Switzerland, Germany, Italy and France. None of these countries
has any plans to sell gold. The Swiss may sell some after 2000 if
the proposal can win a referrendum ( currently loosing in the polls ) .
You hear only about the sales: Australia, Belgium, Netherlands, and
Argentina but you don't hear about the 15 central banks who were net
purchasers in 1997: the two biggest Russia and China.

The Asian currency crisis has underscored gold's utility as a monetary
reserve. It has risen in price against every paper currency except the
U.S. dollar. Eventually it will rise against the dollar too. The fallout from this crisis is only just beginning to hit the U.S. We will
import the deflation in the form of a massive increase in our trade
deficit. If you recall the trade deficit is a subtraction from GDP.
The trade deficit will eventually sink the economy and the dollar.
Flight capital will then go to gold.

G'Day from Kalgoorlie in Western Australia

It is locally rumoured that Delta and Acacia are having discussions concerning a possible merger. It is further reported that Placer Dome has its eyes on both Delta and Acacia.

Very good assets.

Delta Gold - http://www.deltagold.com.au/

Acacia Resources - http://www.acacia.com.au/

Placer Dome - http://www.placerdome.com/

Aye, Haggis

Peregrine: Share sale hit by Asian financial crisis
FT THURSDAY JANUARY 8 1998
By John Ridding in Hong Kong

Peregrine, the Hong Kong-based investment bank, is
discussing a revision to the terms of a share sale to Zurich Group, the Swiss financial services company, following the deterioration in Asian financial markets.

The announcement follows a sharp fall in Peregrine's share price, which lost 14 per cent yesterday before dealings were suspended. It also comes amid reports of a delay in a rights issue by an Indonesian company thought to have received loans from Peregrine.

http://www.ft.com/hippocampus/v774d2.htm

Hong Kong Hang Seng ^HSI 11:30PM 9110.46 -428.15 -4.49%

Yes, I said they make this pronouncement everyday and by golly they do. This situation is very sad as I have pointed out. Asia wake up - Buy gold, sell bonds. Tell your friends in Asia to declare bankruptcy ( like most Americans do ) and restart their engines. If you keep following the advice of the West, you will be serving new round eye masters for the rest of your lives.

Wednesday January 7, 9:06 pm Eastern Time

Japan to act for stability in forex markets--MOF

TOKYO, Jan 8 ( Reuters ) - Japan is ready to take appropriate action for stability in foreign exchange markets, a senior Ministry of Finance
official said on Thursday.

Haruhiko Kuroda, director-general of the ministry's International Finance Bureau, said: ``Our stance to take appropriate action for stability in the
foreign exchange markets remains unchanged.''

http://biz.yahoo.com/finance/980107/japan_to_act_for_sta_1.html


Sakakibara's one-hour meeting with Greenspan in the afternoon started minutes after another high-level Japanese official -- Economic Planning
Agency Director General Koji Omi -- left the Federal Reserve Board building where he held a 50-minute talk with the Fed chairman.

http://biz.yahoo.com/finance/980107/japan_usa_2.html

Excellant SDRer:

"What is being destroyed this time, in addition to the lives of
millions, is the belief in paper. Noone yet realizes this, for it is faraway--exotic, subtle and yet,
inexorable. As they fall, the fiats,
one after another, humankind will begin to question the "Pricers"
and the wisdom of ignoring value. IMHO"

from your
Date: Wed Jan 07 1998 23:32
SDRer__A ( ) ID#288155: