Did tsclaw ever disclose excatly which stockhe was referring to last night. And if not why not do it now tsclaw? After all, if you've already loaded up what harm could be done by letting your Kitco buddies getting on board?
"Date: Sun Jul 05 1998 01:30
tsclaw ( @ gagnrad ) ID#327123:
Don't take me serious. I did sell all my AU stocks last week but only
because I wanted to invest the money in another high risk stock. I've
been trading stocks since 1960 and haven't found one this good till now.
Just a hunch, but I think I'll be back into AU stock before they move
much. "

Sign of weekness in the US bond market -

another crack in the plaster.

http://www.nypostonline.com/business/2770.htm

weakness. Yeah.

See ya tomorrow.

Get our teeth fixed - or pulled to prevent problems later.
Get new eyeglasses - maybe stronger prescriptions than you need now if your myopia is worsening - cuz their won't be optical labs in 5 years.
Maybe get one of those eye operations - RPK or whatever.
Stock up on sunscreen - no surgeons or ORs for cancer removal.
Got any food or food additive allergies? Best find out which ones. Best not stock hundreds of pounds of wheat if you can't tolerate it.
Get those "optional" skin treatments done or prescriptions filled for warts, psoriasis, etc.
Been putting off the hernia or back operation? Get it now or never! Same goes for any other condition that could be debilitating later.
DON'T get any vasectomies or tubals, etc. You may find that having kids is the only way to assure your own survival - just like in the old days.
Find out about genetic abnormalities that you may pass to any children you may have. Best to know now and not have kids later than to have to deal with problems when there is no medical support for such defects.
Stock lots of condoms - AIDS/HIV will be rampant due to rape etc.
Stock as many birth control pills as shelf life will allow. Rape will happen more often than we like to think. Think seriously about modern or old herbal medicines that induce an abortion. Kids at the wrong time could be fatal to all involved. Young teens especially may have to abort since childbirth without hospital support could kill them.
Got any compunctions about eating meat or killing dogs ( or people ) ?
Best get used to omnivorous diets now. Maybe even try bbqed dog.
I can't recommend practicing war - but at least seriously think about how you are going to handle the bast*rd that will kill you for a stock of milk & beans or the dog you have on the bbq. No it is NOT optional to give the SOB your food because without it you & your mate and baby will starve to death.

it right. They are quite proud of their web site, which they claim will be the nucleus of a "virtual community" but they are also seriously trying to find the land on which they can build an entrepreneurial city-state.

Entrepreneurial city states that become wealthy through trade and inventiveness have been creating fabulous wealth for their citizens for 3,000 years, with Tyre being the most financially successful ancient example.

City-States never last as long as Nation-States, at least as independent entities. Venice is still with us, but it is a shadow of the city it was during its independent period. We are getting the opportunity to observe first-hand the strangling of a city-state that has lost its independence now that Hong Kong has been absorbed into China.

Oceania is a wonderful concept, but a ship, or a bunch of offshore platforms, are not defensible. I think the defensible port, with a benign neigbouring nation state is still the only realistic option. If Laissez-Faire City ( named after Ayn Rand's fictional city ) can get off the ground, the only competition it will have is from Singapore, with its neigbour Malaysia. Of course, there is defenensible and there is defensible. Both Singapore and Hong Kong fell to the Japanese.

- Steve

C'mon Squirrel! Did you have to make that last post just as I was about to turn in for the night? You sure now how to spoil a person's sweet dreams!

The Europeans distrust of each other is FAR outweighted by their distrust of USA

Thanks Steve! Now I can dream sweet 'golden' dreams again. BTW - Are you planning on coming to the Kitcoite dinner meeting in TO at the end of this month when we all gather to greet Reify on his brief stopover in Canada?

re: your survivalist thoughts. Having babies isn't all *that* dangerous! Here in Ontario midwives have been legalized, and lots of women have their kids at home with no physician present. There's risk in having a baby, but then there's significant risk in driving around in your car.

- STeve

July 6, 1998

Japan can expect new political turmoil after polls

TOKYO, July 6 ( Reuters ) - Regardless of how Prime Minister Ryutaro Hashimoto's ruling Liberal Democratic Party ( LDP ) does in Sunday's Upper House elections, Japan is heading into a new period of political turmoil, analysts say.

Political analysts are divided over the outcome of the national contest, widely regarded as a virtual referendum on Hashimoto's handling of Japan's economic woes.

"Since the end of World War Two, no other Upper House election has played such a decisive role in determining the fate of Japan than Sunday's elections," said Terumasa Nakanishi, professor of political science at Kyoto University.

"Like it or not, an ineffectual government could even deepen economic instability in Japan and trigger a fresh, and more serious, crisis in Asia," he said.

LDP officials acknowledge they are fighting a bruising battle because of the economic woes. "The opposition is virtually non-existent. But if the economy worsens, voters are going to turn their backs on us," Kajiyama said recently.
http://www.freecartoons.com/ReutersNews/JAPAN-POLITICS-LDP.html

coming to the get-together, but have no details. Could you e-mail them to me? ( ross@phm.utoronto.ca )

Might be worth keeping in touch with this Laissez-Faire City-Stete, eh? So far they are only asking target countries fore a 50-year lease on the land, cognizant, I suppose, of the fact that a City-State can never exist independently for very long.

- Steve

Please keep everybody advised as to time date location .etc. etc.

Thankyou

http://www.ecis.com/~alizard/y2k.html

I forgot a meat grinder and other similar contraptions to reduce tough or hard to eat food to a consistency that near-toothless people can eat. Be a shame if you are old, toothless but still full of spunk and wisdom - only to die of starvation.
Also you should start getting used to eating food that is not quite right. Most modern folk are too picky about blemishes and smells. I swear I have become resistant to most stuff my bachelor cooking has imposed upon me. BUT - I have also learned what I can't get away with - such as smelly milk, meat, and rancid flour or brown rice. Sometimes cooking the heck out of the meat works. But only experience can tell you when to char it and eat it or when to toss it before it tosses you. We have a street person hereabouts who browses the trash cans for left over sandwiches, snacks, etc. You can bet he has learned what to eat and what not to eat.
Sounds terrible doesn't it! Did you see any documentaries on the depression lately or talk to old timers? They made meals for their families from what they could scrounge in other people's garbage. It was either that or starve.
Now are you all looking forward to eggs, toast and orange juice this morning. Happy Golden!

Give me an E-Mail address and I'll be happy to fill you in. I'm not going to start placing other than PM stocks on this forum.

Believe we are going to meet July 29 or 30th. Probably late afternoon/early evening so that everyone can make it! Time and date not finalised yet. We'll all talk - before, during, and after!

tsclaw - Its always the same - as above!

But there are enough examples among my friends where neither would have survived if it wasn't for modern medical miracles. I am afraid that with each passing generation we are having more of these miracle deliveries.

BUT ALSO - it was not the birth that I feel is most threatening.
When a couple or small group are hanging on by their shoestrings they may find that supporting a young mother and baby could be too much. Also if a couple or group have to keep moving - a baby may not be a good idea - especially in cold climates or bad weather. And if there are 2-footed predators about - the smell of babies is distinctive ( and their ill-timed cry could be fatal to all ) . It may be best to put off kids 'till things stabilize enough to support them in safety and security.

If confidence in Gold had not been decimated by the fear of European central bank sales and then compounded by the Ausie Gold sale just before the the Asian melt-down started, the hundreds of billions in currency that fled from these countries would likely have gone into Gold rather than the the US$, ( the All-Mighty Buck ( AMB ) ) . This flight of capital looking for a "safe heaven" has served to over-inflate the value of the AMB and continues to spread unabated todate. This has created a viscious cycle which feeds on itself and increasingly compounds the problem, i.e. the higher the AMB climbs, the more these currencies devalue causing a further exit of capital to the AMB, driving it still higher.

Another problem is that the more the AMB rises in value, it impacts the currencies of other countries that were initially unaffected by the Asian contagion and thus the problem spreads as it has been with clockwork regularity lately, the latest victim being the South African Rand.

A third problem is is that since the AMB is the standard currecy for trading in all commodities, this over-exuberant rise in its value has served to decimate commodity prices and by default the economies of countries that are dependent on resource exports, thus more capital fleeing these countries seeking the AMB. When does all this end?

It is apparently clear now that the American has no intentions of intervening to put an end to this massive robbery of wealth from the most vulnerable nations in the world. If he had such intentions, he would have offered the Korean a fair price for the Gold he collected from his citizens back in January. That would have given Gold some credibility and would have put the brakes on to the over-valuation of the AMB but instead the American continued to focus on a strong $ policy coupled with threats of interest rate increases in the face of non-existent inflation in his economy, puting even more pressure on the melting currencies around him.

The only way to put an end to this disaster is for the affected nations to band together and devise a plan for reinstating Gold's credibility as a universal form of currency, a store of value and wealth, something that has been universally accepted by mankind since the dawn of civilization.

the only game in town. If the "fix" that everyone seems to think is in doesn't work this time, it is inevitable that people in Asia, and elsewhere, are going to start looking around for somewhere else to put whatever remains on the table. Gold ( and silver ) are about the only other place there is."

http://www.the-privateer.com/gold6.html

SQUIRREL, MOONEY, & STEVE in TO, Just logged on to find you guys discussing childbirth. My wife, as you know, is an ER doc and has in her residency and career delivered several hundred babies. Consequently, when our first one was due just over 8 years ago, we decided to have her at home. Great midwife, and a wonderful experience all around. ( The only exception was that instead of it being free through my wife's HMO, it cost us $2000 - however that was money well spent! ) Women, as you probably know, have been giving birth for many centuries - well before the advent of hospitals and the medical profession's turning childbirth into a medical emergency. True, some types of birth ( breech, prolapsed cord, transverse lie, etc. ) necessitate medical intervention but for the most part a healthy woman can and should give birth just as God and nature intended her to. BTW, the only reason we didn't have #'s 2 & 3 at home was that Mrs. Strad developed gestational diabetes and due to state laws and insurance prohibitions, no midwife will touch a "difficult" birth. Instead, we just waited until our kids were ready to arrive. #2 popped out after a mere 45 minutes at the hospital - essentially a home birth, since they didn't even have time to hook up an IV. BTW, after #1 arrived my wife was interviewed for a big piece in the LA Times on Midwives, as a doctor who had opted to employ a Midwife for her own delivery.

Goodnight All - tsclaw, I'll check mail in morning. Thanks. And Goodnight Glenn wherever you may be.

Year 2000 hype is relentless.
http://www.examiner.com/skink/skinkApr19.html
~~~~~~~~~~~~~~~
Girding Grid for Y2K Power
http://www.wired.com/news/news/politics/story/12959.html
~~~~~~~~~~~~~~

Two views over the same fence...

Gotta get some shut-eye but couldn't resist saying hello! Also curious. Would you say that during the time your wife gave birth and also hit the LA papers with the child-bith story you were, sort of, well, ...dare I say it?... Playing Second Fiddle to Your Spouse? ;- )

http://dailynews.yahoo.com/headlines/ap/technology/story.html>http://dailynews.yahoo.com/headlines/ap/technology/story.html
?s=v/ap/980704/technology/stories/bugged_snapshots_1.html

You'll need to re-splice the url.
A global glimpse???
~~~~~~~~~~~
Experts Fear 2000 Computer Glitch
http://dailynews.yahoo.com/headlines/ap/technology/story.html
?s=v/ap/980704/technology/stories/bugged_by_millennium_1.html

You'll need to re-splice the url.
The millennium computer bug could threaten irrigation along the Nile. Airlines may have to suspend flying some routes. Venezuela's coordinator for year 2000 computer problems says his country is ``in an emergency.''

The United States, Britain, Canada and some other countries have devoted billions of dollars preparing for 2000, when computers with dates in their programs could go haywire.

But an Associated Press survey of businesses, government agencies and information technology researchers in 16 countries suggests many nations are only now waking up to the problem.

Computer experts warn that when 2000 clicks in, many countries could face widespread power outages, transportation foul-ups and telecommunications failures because of confused computers.

No one knows exactly what will happen. With last-minute fixes - and luck - disruptions could be minimal. But experts are pessimistic.

Edward Yardeni, chief economist for the international investment firm Deutsche Morgan Grenfell, predicts a 70 percent chance of global recession at least as serious as during the 1973-74 oil crisis.

``If we have everything fixed in the United States but there's major disruptions in Europe and total calamity in Asia and Latin America, we're going to be affected in a very, very adverse fashion,'' Yardeni told The Associated Press.

Experts say laggards include Germany, Japan and Russia, major players in a closely intertwined global economy that is due for a shock when an unknown number of computer systems and integrated circuits lose track of time.

Early software engineers sowed the seeds for the year 2000 problem when, for economy's sake, they decided to express years with just the final two digits rather than all four.

When the century comes to a close, many untreated computer systems will then interpret double zero to mean 1900, potentially turning bank ledgers and business records into gibberish while elevators, assembly lines and other machines shut down, unable to comprehend the new date.

Even if the United States, the world's most computerized nation, gets the problem fixed, the globalization of economies makes everyone vulnerable to failures outside their borders.

Sever a key link - power, finance, telecommunications, medical devices, transportation - even for a few days and the implications are dire.

The airline industry promises planes won't fall out of the sky, but radar and air traffic control glitches could make it unsafe to fly over some nations.

The 258 member airlines of the International Air Transport Association have just pooled $20 million to help needy nations get their air traffic systems ready for 2000.

Still, some airlines may have to ground some planes that first week of the new millennium if they don't consider certain routes safe. Carriers remain unsure whether their insurers will cover year 2000-related calamities.

Telecommunications are also a worry.

``I think it's going to be nearly impossible to make a phone call from the United States to Korea, Indonesia, Malaysia, maybe even Japan'' in the first days of 2000, Yardeni said.

A survey of 113 countries by the U.S. State Department found that telecommunications companies in 33 of them were having problems with year 2000 fixes and that 29 others were unaware of or had not begun to address the problem.

In most of the world, computer programmers will have to perform triage - fixing mission-critical systems and taking secondary ones off line.

Capers Jones, chairman of Burlington, Mass.-based Software Productivity Research and a leading year 2000 researcher, estimates the global cost of revising software at $1.1 trillion. That doesn't include embedded computer chips in everything from VCRs to offshore oil rigs that must be inventoried, checked and fixed if necessary.

Egypt is among nations still in the information-gathering phase. It is trying to assess how to ensure power is not lost in the Nile basin, the country's lifeline where 24 million people work in agriculture and depend on electricity for irrigation.

``This is a system which is regulated very, very carefully,'' said Bayoumi Attia, a senior planning official at the Ministry of Public Works and Irrigation.

He predicted ``a mess'' if the power grid shut down for more than a few days. A month-long outage would destroy crops, he warned.

At an Asia-wide workshop in Thailand in June attended by experts from national statistics agencies, representatives from China and Nepal said awareness was so low in their countries that many people thought the 2000 bug was just another malignant computer virus.

Even where awareness is higher, other issues have taken precedence: Programmers in much of Europe are distracted converting business and government computers to deal with the 1999 start of the European Union's single currency. Asia is consumed by financial crisis. Russia is trying to stave off economic implosion.

A survey by the Gartner Group found that half of 6,000 companies in 47 countries will not have at least 20 percent of their mission-critical systems fixed and tested in time for 2000. Most were small companies likely to be suppliers of larger companies.

That's where the cascade effect comes in. Just because a company is prepared doesn't mean its key suppliers or trading partners will be.

An estimated $3 trillion is transferred electronically every day on global markets, where a computer glitch can be costly. The London Stock Exchange is thus demanding stringent year 2000 compliance of anyone with whom it does electronic business.

Have your computers fixed by mid-1999 or you don't trade, it insists.

In Japan, the world's second most computerized nation, officials of three major banks - the Bank of Tokyo Mitsubishi, Dai-ichi Kangyo and Sakura - told the AP their year 2000 projects are running on schedule.

But a computer expert in Tokyo, Yoshiya Fuhita of NRI Information Systems, said he believes Japanese banks ``are in a dangerous state.'' The country's financial sector lags well behind the United States, spending just one-tenth as much on software fixes, he said.

Although technology analysts say Germany is also well behind, a top German interior ministry official, Eckart Werthebach, said regular checks of mainframe computers will ensure that pensions, for example, are paid on time.

One of Russia's most sensitive industries seems not even to understand the issue.

``We don't have any problems yet,'' the Atomic Energy Ministry's spokesman, Vladislav Petrov, said. ``We'll deal with the problem in the year 2000.''

In the developing world, money and political will are typically lacking.

Venezuela's government, for example, has not even begun examining its computers to assess what repairs are needed.

``We're in an emergency,'' warned Edgar Martinez, the country's year 2000 coordinator.

Martinez fears a paralysis lasting at least a week, including widespread power outages, a halt for Caracas' subway and computer failures that could wipe out pension payments, academic records and payrolls.

``We're going to have all kinds of problems,'' he said.

Forecast for Third Quarter 1998

* Resistance to U.S. Power Grows

The main feature of the international system remains the intensifying
resistance to American global power by secondary powers. This pattern,
described in both our Annual Forecast and our Forecast for Second Quarter
1998, is both inevitable and the defining characteristic of the global
system today. Since the collapse of the Soviet Union, the international
system has been in extreme imbalance. A single power, the United States,
suddenly found itself in an extraordinarily powerful position. Relatively
insulated from international pressure, the United States was not
constrained to act in either a consistent or predictable fashion. The
result was inevitable. U.S. foreign policy was shaped by domestic
political considerations or fell into the hands of politically influential
business interests who worked to shape foreign policy to suit their needs.
Since there was no overarching strategic imperative at work to limit their
interests, U.S. foreign policy became particularly sensitive to these
pressures.

From the standpoint of the rest of the world, U.S. policy has become
peculiarly erratic. It requires a deep understanding of the political
process in Washington to predict U.S. policy initiatives and responses.
The American response to crises and processes seems random and
unpredictable. As a result, resistance to U.S. global domination has been
spreading and intensifying on a global basis. It remains a fragmented
resistance, not yet coordinated due to a lack of a single unifying power
willing to challenge the United States. Nevertheless, its spread and
intensification has been marked in the last quarter and we expect this
trend to continue to intensify with increasing inter-regional coordination.

During the last quarter, resistance has increased in several areas and over
several issues. The growing crisis in Kosovo, for example, has been defined
by Russian unwillingness to allow the United States the right to
dictate policy in an area it regards as within or close to its own natural
sphere of influence. The nuclear tests on the Indian subcontinent
represented direct challenges by both India and Pakistan to U.S. policy, as
neither power was willing to subordinate its own national interests to the
American sponsored nuclear regime. Saudi Arabia has pulled away from its
traditional relationship with the United States. China has taken every
opportunity not only to resist American blandishments over human rights,
but also to make it clear that they are pursuing an independent foreign and
defense policy. Resentment and resistance to the United States, coupled
with an almost sublime American indifference to this sensibility, has been
the dominant theme thus far this year and will continue to dominate in the
third quarter.

It should be remembered that this deterioration of American political power
is inevitable. A unipolar world is untenable unless the dominant nation is
overwhelmingly and indisputably powerful, which the United States is not.
The paradox of the American position has been that, as the world's only
global power, the United States is too weak too exercise an absolutely
definitive authority but too powerful to evade responsibility. As powerful
as the United States was and is, that power is far from sufficient to allow
Washington to impose true global hegemony. As a result, the United States
finds itself with a peculiar responsibility for virtually every event in
the world, without having the resources to influence more than a small
handful. Apart from irritating the world for its seeming indifference and
inability to act, this weakness has created space for secondary and
tertiary powers to assert their own, regional interests. This last quarter
saw a good deal of this, and the next quarter will see even more.

We are also seeing a search for patronage on the part of these powers as
tertiary powers seek secondary powers for political, military and economic
support. Three nations seem to be increasingly undertaking this role.
France, for one, has been particularly aggressive in challenging American
power. For example, the French have been flirting with the Saudis at
precisely the same time that Saudi-U.S. relations are worse than they have
been in decades. Another power is Russia which, following its defeat by
the United States on NATO expansion, has been resisting American policy in
the Balkans and the Middle East. We expect them to increase their
opposition to American power in Central Asia in the near future. Finally,
China has made it clear that it regards itself as a major regional power,
and that it expects the United States to treat it as such. These three
powers serve as the focus of potential anti-American coalitions in the
future. We continue to expect continued cooperation between the three over
the coming months, to the consternation of Washington.

* U.S. Economic Strength Continues Unabated

This ongoing geopolitical process is taking place against the backdrop of
unparalleled American prosperity. The United States is, without a doubt,
in an economic golden age. Given where the international system was ten
years ago, it is odd to say that American economic power is today greater
than its political power. Nevertheless, it is true. The most dramatic
feature of the international system is the robustness of the American
economy. We do not expect the American economy to weaken materially.
American exports represented only about 8.5 percent of Gross Domestic
Product in 1997. Total exports to Asia represented about a quarter of this
total. If the U.S. lost twenty percent of its exports to Asia, this would
represent a loss of less than one-half of one percent. Assuming a
multiplier effect of decreased sales to Europe due to the Asian decline, it
is still hard to believe that a complete disaster in Asia would slice more
than one percent off of America's GDP. Since the economy is growing faster
than this, the worst case scenario would be that Asia will cause a slow-
down in the American market. In an odd way, the lack of Asian leverage on
the United States is due to its own policy of aggressive exports and
protection against imports. These policies mean that the U.S. is not very
vulnerable to Asia's problems and not likely to do much to solve them.

Even the worst case scenario is counterbalanced by a benefit to the United
States from Asian troubles -- capital flows. As Asia has melted down,
money has fled Asia. This includes not only Asian money, but U.S. and
European money being held back or pulled out. This money has tended to
gravitate toward safety, which is represented by the American capital
markets. This process is not over by any means. The tendency of the
conventional wisdom to underestimate Asian problems has meant that many
investors have tried to hold tight to their positions. Successive crises
have shaken loose more and more of this money, but there is plenty left and
it is flowing toward the U.S.. This makes up for lost trade in very
positive ways.

Fleeing Asian money has facilitated new capital formation. This means that
while labor shortages are a real problem, interest rates are
extraordinarily low for this stage of a business cycle, and the Federal
Reserve Bank has had no problem maintaining a positive net reserve
situation. We see no reason to expect the U.S. economic expansion to end
in the next quarter or even this year. Thus, our prediction in our 1998
Annual Forecast stays in place: "The United States has become the safe
haven for investments as well as the lender of last resort on a global
basis. As Asian economies weaken, the flow of money into the United States
increases... This flight to safety will serve to cushion weaknesses in the
American markets and limit the negative phase of the U.S. business cycle."
It has worked thus far and will continue to work.

* Asian Economic Crisis Catches Up With China

At the same time, the Asian economic calamity continues unabated.
Predictions that the worst is over have consistently been proven false. We
wrote in our Second Quarter Forecast that, "The region appears about to
enter phase three of the crisis. The first phase was the long, slow
deterioration of the Japanese economy. The second phase was the sudden
implosion of the Korean and ASEAN economies. The third phase will be the
intensification of the Japanese crisis and its spread to China." This
continues to be our view. We have certainly seen the intensification of
the Japanese crisis. We have not seen the problem spread to China as yet.
More precisely, the problems have spread but the consequences have not yet
followed. As we pointed out in a recent Weekly Update, we remain convinced
that the pressure on Chinese exports will force a devaluation of the yuan,
which will, in turn, trigger economic crisis in China.

China, of course, is working diligently to avoid this. One of its
strategies is to encourage a continued inflow of Western investment. In
order to achieve this, China must create the illusion of invincibility.
Part of this requires that economic statistics be presented in such a way
as to encourage investors. China, for example, has emphasized the
continued growth of industrial production at pre-crisis levels.
Unmentioned has been the fact that inventories in China are soaring, as
unsold products pile up. By emphasizing industrial growth over other
variables, the Chinese are leaning on the one variable they can control, in
the hope that Western investors will continue to pump in hard currency with
which the yuan can be supported.

The other part of this strategy is an extremely aggressive foreign policy
stance, in which China appears to be utterly self-confident and even cocky.
China is doing everything it can to maintain the illusion of the robustness
of the Chinese economy. It has worked so far. We do not believe it can
work indefinitely and we believe that Japan's problems will take down the
Chinese economy in the coming months. We see Chinese management of
Clinton's recent trip to China as part of this strategy. Clinton, by
affirming Chinese power and treating China like America's senior Asian
partner, helped minimize China's risk in the eyes of Western investors.
Now, Western investors already exposed in China are certainly hoping that
the Chinese can pull of their strategy. This is the origin of the heavy
pressure on Clinton to minimize friction with China. The hope is that
China will invest its way out of its crisis. We do not think it will work.
We expect China to join the rest of Asia shortly.

* Economic Failure in Russia Foreshadows Death of Liberal Experiment

Russia has already joined Asia, for all intents and purposes. The Russian
economy simply does not work. Outside of a handful of major cities, Russia
is in the grip of a depression of unprecedented proportions. Now, the
Kiriyenko government is struggling to hold together the fabric of Russia's
urban economy by keeping the banking system afloat. They cannot succeed.
The rates of return on investment nearly a decade after the fall of
communism simply cannot sustain the development of Russia into a modern
democratic society. As we put it in our 1997 Annual Forecast: "The
Russians have given away their empire in return for very little. The
people that Westerners speak to -- English speaking intellectuals and
businessmen -- are not the gauge of Russia. The vast hinterland, with its
mid-sized and small industrial cities and its farms, is an impoverished
disaster. Reforms have created disorder and confusion and have increased
corruption. They have provided precious little rewards beyond uncertainty
and poverty."

Yeltsin's selection of Kiriyenko reveals the bankruptcy of his policies.
Kiriyenko's selection means that Yeltsin sees Russia's problems as
primarily technical -- inefficient tax collection, poor law enforcement,
etc.. The selection of a 35 year-old whiz kid to solve these problems
would make sense if Yeltsin was right. In fact, the problem is not
technical but cultural, historical, and ultimately moral. The
extraordinary poverty of Russia outside of Moscow and St. Petersburg, the
loss of state dignity in the face of profound corruption, and the loss of
the grandeur of the communist empire in exchange for very little, are all
cancers eating at the soul of the post-communist regime. The issue, as we
have been saying for several years, is not whether liberal democracy will
survive in Russia, but what will replace it? The selection of Kiriyenko is
a last ditch effort to save Yeltsin's regime. It cannot be done. In the
meantime, almost imperceptibly, Russia's foreign policy is returning to its
old, imperial paths. We expect Russian activity in the Caucuses and
Central Asia to be particularly intense in the coming quarter, moved by
anti-American sentiment and the desire to get greater control over the
region's oil supply.

* Oil Price Collapse Makes Iran Significant -- And Iraq a Target

Oil has become a driving force for Russia, as well as for other oil
producers. Russia's problems have been exacerbated by the inability of oil
producers to raise prices above historical lows. This has devastated
Russia's economic plans. It has also devastated the economic plans of
other oil producers, particularly Saudi Arabia. For example, Saudi Arabia
has paid some major suppliers with bonds rather than with cash. It had
similar problems in 1993-94. This time the situation is worse, both
because it comes after the debilitating 1993-94 period and because prices
are relatively more depressed. The Kingdom borrows through its private
banks, and these banks have recently financed a $2 billion government
placement. This is, we believe, the tip of the iceberg. The Saudi
situation is truly precarious.

Saudi Arabia, along with Venezuela and Mexico, has agreed to cut
production. As we said in our forecast for last quarter when we discussed
the effect of the Riyadh Pact on oil prices: "This indicates to us that
there is now a floor under the price of crude. However, this does not mean
that the price will rise and without a rather strong rise in the price of
oil, which is not likely to happen by agreement alone, Saudi Arabia is in
serious financial trouble." A floor has been set, but it is not clear that
production cuts alone, particularly unenforceable production cuts, can
raise the price of crude.

The only way to raise crude prices at this point is to force production off
the market. From our point of view, the key problem is that production
levels have been set since 1991 on the assumption that Iraq would not be
exporting oil. Now that Iraq is in fact exporting, a massive overhang
exists in the market. No one can afford to cut production to compensate
for Iraq. It follows, therefore, that by pushing Iraq off the market
again, oil prices would rise, by some estimates, as much as five dollars a
barrel. While this might be excessive, it is certainly a temptation,
particularly for a country as desperate as Saudi Arabia. Of course Saudi
Arabia is not in a position to close off Iraq. The United States and Iran,
however, are in a position to do so.

The recent American opening to Iran was predicted by STRATFOR. We wrote
last quarter that, "It has been our consistent view that American fear of
Iranian participation in the Greco-Syrian-Iraqi entente forced the United
States to seek an accommodation with Iran. That process of accommodation,
which we have tracked since September, continues to intensify. It has been
our view that, to a large extent, American bellicosity toward Iraq was part
of an attempt by the United States to convince the Iranians that the United
States is committed to bringing down Saddam and to rectifying the outcome
of the Iraq-Iran War." This American courtship has broken into the open,
with the Clinton Administration openly stating that they wish to improve
relations with Iran. One of the key reasons for this is tremendous
pressure from Saudi Arabia which, facing serious economic problems from low
oil prices, has been flirting with an alliance with Iran.

The Saudis are as naturally opposed to unilateral Iranian power as they are
opposed to unilateral Iraqi power. But committed though they are to a
balance of power in the region, the oil price situation has become an
obsession that has driven prudence out the door. The issue now is not
whether Iraqi oil will be forced off the market, but who will do it and
what will the consequential power relations turn out to be. One rational
U.S. maneuver would be to precipitate an intense confrontation with Iraq,
designed to isolate Iraq, remove its oil from the market, raise prices and
save the Saudi economy. Another scenario is that Iran will unilaterally
act against Iraq, both to raise the price of oil and consolidate its
position as the dominant power in the Persian Gulf. A third scenario would
be one in which the U.S. and Iran collaborated to isolate Iraq. It is not
clear which of these will happen, but we remain convinced that someone is
going to act against Iraq. Geopolitics and economics have combined to make
Iraq intolerable. Indeed, given Washington's tendency to respond to
pressure from special interests in formulating its international strategy,
we see such an action against Iraq as consistent with this administration's
operating principles. There are a lot of people who would be very unhappy
to see a massive Saudi default. A lot of people want to see higher oil
prices. Iraq is the key to this outcome.

Thus, we expect the next quarter to look very much like the past two. A
robust American economy will parallel a weakening international position,
punctuated by periodic bursts of politico-military activity motivated by
domestic political and economic pressures. Asia and Russia will continue
to deteriorate economically. There will be increasing attention on the
Persian Gulf as the Saudi economic crisis plays itself out. The logical
consequences of the end of the Post-Cold War world continue to play
themselves out. There will, we think, be few surprises but increasing
distress.

Help......

Golden Eagle, the small exploration company
claiming a huge gold find in Bolivia,

Does anyone know it's ticker symbol and which
exchange ( s ) it trades on ?

TIA

MOONEY: Hi! Second Fiddle, eh? Yuk, Yuk! Actually, we did the Bradley Childbirth method, part of which requires the husband to massage the wife's back during contractions. Used two tennis balls which I ground into the small of her back with all my strength during each contraction - for over 13 hours. You probably won't believe this but SHE says I did more work than she did.

For Robnoel ..
Sorry buddy .. but the source of your info seems
to be the AWB bullsh!t weekly..
Im not in love with the ANC .. but frankly I think
the Nats were probably WORSE.. THEY sold RSA out
really in return for golden handshakes .. Luckily
the ANC were not half as bad as they were painted to
be..
A forecast for you .. old bean .. I doubt if they
will get as much as 55 % of the vote this time .. The
much more conservative UDM is gaining ground and in
the Transkei.
The communist party would be reassured by your
opiniom .. right now they are pretty shaken up.. so
is cosatu .. they've been afraid to call a strike for
over a year .. no one would show up. Days lost to
strikes is a FIFTH of what it was 5/6 years ago..
But you wont read that in the AWB news..


for David Blair Macrory
who wrote
"Is this 'tinder-box'...part of what has fueled...
the recent collapse in the rand? "

what exactly are you talking about ??
RSA is as much of a "tinder box" as san diego ..

Ive already posted on the rand fall... it was hit
by a US hedge fund .. and maybe hurt by the rumour that
Mboweni would replace Stals. The communist party
is a joke .. you will have to struggle to find a
Black member .. mainly Limey cast offs and a few
disaffected Indians and Moslems .. who's kidding who
with the Red crapola .. these guys are cocktail
party reds .. I knew lots of them in Turkey.

and where does this tinder box stuff come from ..
have you been reading robnoel's translation of the AWB
news .. the AWB are really a bunch of fat dumb
Afrikaans speaking farmers who fall off their horses
drink beer and try to talk tough. Sometimes they actually
believe the cr@p they talk .. that's when they get
their @ss handed to them .
RSA has a big crime problem .. Like ALL Africa, it
has a big unemployment problem .. But unemployment
is a way of life in Africa .. It's nothing NEW.
If and when unemployment comes to San Diego,
Ill be asking YOU about tinder boxes - Africa is
much better equipped to deal with a depression
than the USA.


P.S. Please robnoel .. the AWB is an enbarassement ..
lay off the dire warnings .. and be carefull not to
get mugged in the US of A.

For Nick ..
If Australia follows my plan for RSA and uses their
gold production to make their currency convertible ..
the UK pound would be one of the first to crash and
Japan would be next .. ie people of little gold..
them .. We could use the UK as a penal colony and
Japan as an exotic theme park and golfing center.
he he .. I love it.

That bad, huh? Remember R. King's L.A.? Wait 'til the welfare checks are late in Y2K.

The symbol is MINE. There is alot of criticism on Golden Eagle. Many think it is a scam. I do not but I have shares in it. To me there is no question Gold is there but how much IS a big question. It trades OTC BB. A release from the company is due out soon that will announce a third party audit of the report they released a few weeks back. Trading is set to resume on Tuesday if the company is up to date with the SEC. My opinion is that just as people in Bre-X were overly optimistic, people are overly pessimistic on Golden Eagle. It seems it is getting quite a bit of media attention right now and that will probably push the stock up. The best information can be found on Silicon Investor web site. They have a very active thread on MINE.

Crazytimes,

Thanks for the Info....

Go Gold and Golden Eagle

My brother John,

Upon very carefull consideration given to all aspects
of life, culture, and knowledge, it gives me a great
pleasure to rank you #1 among all Kitco people.

Proud to be your brother, at least be called so by you.

Oris

P.S.Don't know why I posted that, probably just wanted
to demonstrate my Respect...

Oris ..
to have you as a brother ..
but we gotta change bloomer's
ATITUDE on MIGS.

I think he's OK on Natashas..

for dave in CO

.. to be nice.

For Oris ..
You know .. we have crime here .. mainly in the
townships and in the colored areas .. and there is
always low level trouble between clans or IFP/ANC
in Natal .. But occasionally a White Guy gets killed
by a Black guy .. and vice versa ..
In the US, everybody seems to feel that getting
killed by a Black guy is a lots worse than
getting killed by a White guy ..
Actually I imagine that it feels about the same..

tsclaw ..
What about me ..
jdisney@mweb.co.za

I love high risk ..

To all ..
Jse Gold just opened .. Rand at 6.7..
.. Index up 70 points on the open
how sweet it is. All this action
is falling Rand .. Thank you F-awful..
bought wes Areas friday at 23 .. is
31 this morning .. most stuff of
15% .. Rangy at $.90 ..and no
stock available.

Johannesburg Stock Exchange Gold Index up 6% in the first 20 minutes of trading today!!

Have appreciated your posts John Disney. Notice that the So African gold index is up 8%+ this morning and on its high. Any quotes on Harmony. When do you think this will spill into the ADR market? ( Like today ) How much of this run up is just the currency devaluation and how much of the increased operating margin is factored in?? YOur thoughts would be appreciated.

Go South Africa - the only place where a gold play is paying off.

Kudos on some damn fine calls. Russell must be proud.

South African Gold Index up 8% after 1st hour trading. DROOY up 15%. See article on the weak Rand and its effect on SA golds at http://www.drd.co.za/.

http://biz.yahoo.com/finance/980705/new_fx_int_1.html

For the rest of our $$ denominated precious metal investment ( assuming we decide to keep any with the opportuity in So. Africa ) yen is trading around 140.65 - probably will depress gold a buck. Point and figure on Privateer suggest 292 would be pretty poor -if a tick on way or the other matters.

Any quotes on HGMCY??

http://biz.yahoo.com/finance/980705/new_fx_int_1.html

http://biz.yahoo.com/finance/980706/china_s_ce_1.html

http://dailynews.yahoo.com/headlines/human_interest/oddly_enough/story.html?s=z/reuters/980703/odd/stories/nugget_1.html

http://biz.yahoo.com/finance/980706/hk_gdp_see_1.html

Silver off two cents at 5.31

Looks pretty dicey - yen in narrow range at 140.56.

I'm real tired of having my fortunes tied to the yen, or maybe they are tied to the dollar.

http://nt.excite.com/news/r/980706/04/news-miners

http://www.amgdata.com/
This week =0 .67$billion
Previous week =3.81$billion

Internation funds showed the largest outflow in 9 weeks:
Emerging markets, Latin markets and Asian markets.

All gold up 10% while the rand is down 2.8% from Fri.

Anybody have a Rand quote on Harmony, Drooy or Rangy.

Hello So. Africa . . . . come in So. Africa . . .

How much do we dare chase these things.....

Gold at 1943 rand, up 39% from Jan. For US mines, it would be as if gold went from 300 to 416.

Some kind of goblin at about 0330 est --- now about 292+. Trying to act against the SA action?

is the technical underpinnings of the gold market giving way. Suspect the So African will be blamed for forward sales. Gosh, this Rand is one currency I can root for to go down.

Any Ozzies out there have a copy of the Fin Review?
Looking for Tuesday, April 14th.
tia
sharefin@cairns.net.au

http://biz.yahoo.com/finance/980706/markets_pr_1.html

http://biz.yahoo.com/finance/980706/indonesia__1.html

It hasn't been discussed much here, but the SA gold mining companies have historically paid out a large fraction of their earnings in dividends. If DROOY ( for example ) has a US$40 MM annual earnings ( based on the Rand collapse ) , it wouldn't been unheard of to see a $.50/share dividend.

Dividends of this magnitude will attract a different set of investors than just your plain old garden variety gold bugs ( like us ) .

The SA shares are about to explode, no matter what gold does.

I know a barber who always has bags of cash.Everything done in cash. No overhead, few supplies and a chair. He even bought a very inexpensive home in cash. Couldn't escape tax man on that.Government can't keep on top of that business , but then me being a pinko I think you should pay some tax to keep us fat overpaid newspaper readin civil servants at work.

According to the StratFor report & the news article about Chinese exports, China is in the position Japan & the ASEAN countries have been in. They have a severe structural economic problem that they're trying to cover up instead of dealing with it. In this case its a huge industrial overcapacity, complicated by crony capitalism that puts a deadweight of corruption on the economy. Sounds a bit like Malaysia & Indonesia to me.

I have a some professional Malaysian friends who left because they said the pervasive corruption meant you just couldn't get anything done for a reasonable cost, and it meant that stupid people had the power to ruin your life. In spite of its widely publicised technological coups, China is also suffering a huge brain drain as well.

Chinas structural problems will have to come home to roost eventually. I think we're looking at a situation much like pre-crisis ASEAN or 1989 Japan- when China's situation reverses I think it will happen fast and furiously. Just can't predict what that will do to gold or silver values, though. Chinese paople have long used silver as a hard-money source of security, but that was before the communist gov't made it dangerous to own stuff like that.

- Steve

For Jims ..
Sorry for delay.. out in the tinder
box pruning roses. Had to fight my
way back to house through a zulu impi.
Then they tried to hijack my garden
shears. Cherist its tough here.

When last I spoke to broker ..
harmony was pushing 18, Dbn deep
was 15.75, rangy was 6. Rand was
6.63 which I didnt think was so
bad considering what a jerk I think
Mboweni is. Index was up 102..
I'm rather pleased actually .. but
it would be really nice if gold would
go up too.

bully beef ..
Why dont you quit and get a real job?

Monday, July 6, 1998

BRUNEI

Richest man's brother owes world a fortune

By NEIL BENNETT in London

The Sultan of Brunei has ordered a worldwide investigation into the financial affairs of his
brother Prince Jefri Bolkiah, whose flagship investment company has collapsed with losses
estimated at more than $A20 billion.

The sultan, widely held to be the richest man in the world, has hired some of the world's top
financial experts, including accountants from Price Waterhouse, to discover the full extent of his
brother's losses. This follows the failure of Amedeo, Prince Jefri's construction and investment
group.

Amedeo has debts of hundreds of millions of dollars and dozens of British suppliers have not
been paid for more than a year. The head of one firm, which is owed more than $1 million, said
his company faced a struggle for survival without the money. He said: "When you are working
for the brother of the richest man in the world, you expect to have your bills paid."

The 51-year-old sultan is said to be furious. Prince Jefri's fleet of jets is said to have been
impounded at Brunei and many are now up for sale. The sultan is also determined to track
down the senior managers of Amedeo, who have all left the country.

"The king is very disappointed in his brother, but he is still his brother. Emotion is still very
strong between them," said one of the sultan's close associates.

Amedeo is the largest private company in Brunei. Prince Jefri, 44, is one of the world's best
known playboys. At one point his wealth was estimated at upwards of $50 billion, but as much
as half of that has been lost in the collapse.

The exact source of his fortune is unknown, but he is believed to receive regular payments from
Brunei's vast oil revenues. Some of these he spent setting up Amedeo, which the Government
regularly chose as its contractor on prime infrastructure developments. These were also funded
by the country's oil money.

Prince Jefri used cash from Amedeo to finance a worldwide spending spree, buying some of
the world's best known hotels, including the Plaza Athenee in Paris and the Bel-Air in Los
Angeles, as well as Asprey, the Royal jewellers in London. Many of these are now expected to
be sold to recover some of the losses.

Under Prince Jefri's leadership Asprey sponsored the Ferrari Formula One team, and its driver
Michael Schumacher, for an estimated $50 million. Two weeks ago Asprey announced plans
to merge its main store with Garrard, which it also owns, as part of a cost-cutting drive
prompted by his straitened circumstances.

Prince Jefri, who was once Brunei's finance minister, has one of the most lavish lives of anyone
in the world. He owns 600 cars and a vast yacht called Tits, with two tenders called Nipple 1
and Nipple 2. He owns five houses in London and likes football so much that he once flew
Chelsea to Brunei for a game against the national side.

He also hired Rod Stewart to play at one his children's parties. The prince has four wives and
three children, and regularly plays polo with Prince Charles. He runs his own team, Jerudong
Park.

This year Prince Jefri was sued for 250 million ( $A660 million ) by Bob and Rafi Manoukian,
two former business associates. Prince Jefri counter-sued for more than 100 million. The
brothers alleged in court that the prince regularly entertained prostitutes in his London flat in
Park Lane. The case was settled out of court. In the case, Rafi Manoukian claimed he had
procured more than 500 million worth of gifts and jewellery for the prince over 14 years,
including erotic pens and watches and a jewel-encrusted bedside rug valued at 5 million.

Last week Mr Haji Ismail, Brunei's minister of development, announced that the Government
was taking over some of Amedeo's key projects in the country, including a six-star hotel at
Jerudong Park and several power stations that it was building with Siemens, the German
industrial group. But he stressed the Government would not pay off Amedeo's debts. "Amedeo
should deal with its own problems," he said.

Mr Ismail also called on Prince Jefri and his business associates to return to Brunei to deal with
Amedeo's troubles and added: "I hope Amedeo is not saying, "Forget all things and let them
rot'. They can come forward and discuss what can be done.

"I wish I knew what is going on. I do not know what went wrong," he said. "There has been no
transparency as to what has been taking place. Amedeo cannot just run away if it intends to
honour its commitments. It cannot expect someone to drop from the sky to help."

Brunei authorities are very keen to talk to Mr Danny Wong, Amedeo's managing director, who
is said to be in Britain. Prince Jefri's whereabouts are unknown, although one executive
involved in the affair said he is on holiday in Europe.

The collapse of Amedeo appears to have been triggered by a sharp economic downturn in
Brunei, one of the world's richest nations. This has been caused by the economic slump in the
rest of Asia, which began a year ago, and the plunging oil price, which has fallen almost 40 per
cent in the past year.

Almost all Brunei's wealth is generated by its oil fields.

The Brunei Government has been forced to make sharp spending cuts, reducing construction
work available for Amedeo. This has plunged the group into a cashflow crisis.

The extent of Amedeo's losses are still not clear, but locals say it could be as high as $A25
billion. Others say this is an exaggeration, but the shortfall in assets could well run into billions.
The group took on many of Brunei's largest infrastructure projects and was richly paid for them
by the Government and the sultan. But Amedeo now has no cash to pay its suppliers, although
many of its largest projects are still unfinished. These include the Datastream Technology
Tower, the tallest building in Brunei.

The sultan is due to receive a full report on Amedeo's financial woes in a few days. Then he will
decide what needs to be done. Locals expect Amedeo will be wound up and its assets sold to
meet claims from creditors. The Government is expected to resist pressure from creditors to
underwrite Amedeo's liabilities. One associate said: "The king is not going to meet Jefri's
debts."

The Sunday Telegraph

China? Uh Oh, another bail out by Klinton in the works.

Thank you for the HGMCY and Drooy quotes but I don't quite understand. Pushing 18 you say on HGMCY, it was my understanding that it traded at something like 28. You don't mean 18% do you???

Clarification please....

What do you think the effect will be on ASA, the NYSE traded ADR for SOuth African gold shares.

"There is an old saying among military men. "You never hear the one that gets you." If 1929 starts again they'll supplement the flood of US Fed reserve notes coming home from overseas with lots of crisp new money. Plus they'd pump a few billion into the welfare machine. The people are like trained mice. Give them the money and they'll keep buying. IMHO"

The US people suffered badly in the last deflationary depression because, unlike most of Europe, the US gov't had no programs to employ its people. Under Rosevelt the US engaged in a program of deficit spending to begin to employ Americans to head off significant political problems. ( Of course, the economy did not begin to recover until WWII. ) Now many government programs remain in place, while continued deficit spending threatens to bankrupt the nation as the cost of interest on that debt approaches half of tax revenues, and an equal burden of social security taxes goes to pay entitlements directly. The question is, if the US government is called upon to employ Americans in the next deflationary depression, how shall it go further into debt to fund these programs if the level of interest on debt is now 50% of current tax revenues and tax revenues will have fallen off sharply? Shall the US put all tax revenues toward interest?

There are two solutions: default on debt or inflation. Given that the Fed recently moved to index US Treasuries to inflation, oddly at a time when "there is no inflation," perhaps the answer is clear: inflation in the form of direct printing of money by the US government, rather than by the Fed to fund debt.

-EJ

"Time is running out ~ as Y2K will NOT be completed
on time ~ Public Awareness must be brought to
center stage ~ CONTINGENCY PLANNING ~
Avoid rationing and MARSHALL LAW."

So says Chris Osborne.

Since his April expose of the looming problem there has been an explosion of Y2K commentary on the Internet, however , "there has been no political attempt to enlighten the public at large."

Joe Q. Public is still as unaware as ever - "Y2K ohh, ahh, err, oh yeah, the computer nonsense."

Despite the general public's ignorance of Y2K possible dire consequences, one can feel the growing tenseness of better informed circles.

A particularly disturbing note is the fact that many bankers are flat-out lying about compliance when asked by a depositor. If you doubt this, then ask your own banker. But do it in person, so you may see him squirm when you drop the question on him. When pressed for his answer, the banker will confess, "NO, we are not yet compliant, BUT WE ARE WORKING ON IT."

Y2K expert Chris Osborne cites numerous ramifications of the looming problem - and what precautions a prudent person might take. It's tantamount to preparing for a tornado, hurricane, earthquake, massive floods or any freak natural disaster which can devastate the harmony of our lives.

His message is to be heeded to avoid the potential panic. Read full report at following URL. It's necessary to delete the extra letters "en" in the word "golden" of the URL before pasting to your Internet finder:

http://www.golden-eagle.com/editorials_98/osborne070698.html

Sounds like Prince Jefri has all
the qualifications & experience
to run for president of the U.S.

Some things bug me, like in the post about Y2k: "Marshall Law" should read martial. Martial: adj; of or pertaining to war. The term has nothing to do with any Marshall's, including the General.

KOREAN WON WITHSTANDS WARNING

The Korean won slipped from its highs but remained firm
despite the finance ministry's warning that the won's relative
strength compared with other regional currencies was a source
of concern.

"We are concerned about the dollar falling gradually
against the won," a finance ministry official said. "It's a
problem because our currency remains strong against the dollar
while other currencies in east Asia are weak."

The won was propped up by abundant dollar liquidity and a
belief the central bank would not actually intervene to curb
its recent rise, dealers said.

The government said at the weekend that the economy would
continue to contract sharply for the rest of the year, but
growth should recover after the third quarter due to fiscal
support.

It said it would boost spending to prop up the economy and
expanded its fiscal deficit target for the year to four percent
of GDP from 1.7 percent.

STOCKS WORRIED BY YEN

Most stock markets pulled off their lows, but Hong Kong's
Hang Seng Index remained depressed by the sagging yen and
continued weakness in the property market.

South Korean shares reversed early losses but brokers said
the market showed little clear direction amid concern about the
yen's fall and labour strikes in the financial industry and at
Hyundai Motor.
Southeast Asia markets were quiet due to holidays in
Jakarta and Kuala Lumpur.

Singapore shares managed a small gain despite lingering
worries about Japan, and Thai stocks rose on across-the-board
foreign buying.
REUTERS

Copyright 1998 Reuters Limited. All rights reserved.

I'm just thinking out loud again.
By the end of the month or the beginning of August, Gold should
reach around 315-320, before a correction sets in.
Keep an eye, or two, on the currencies, they're a turnin.
NIKKEI- sure it'll test it's breakout points, but we've started
a nice up move. I'll leave the interpretations of all of the
news and fundamentals to the experts, and just keep doing my little
thingy.

REF: Mtn Bear ( SE ) ( Proper use of English )
Some things bug me, like in the post about Y2k: "Marshall Law"...

Mtn Bear, I concur completely. I too am bugged by improper use of any language - "martial" not equal to "Marshall" - the old General is grumbling in his grave.

I apologize for MY careless over-sight. Nonetheless, MY ERROR should not detract from the author's important message.

http://www.kitcomm.com/pub/discussion/ANOTHER21.html

A London, Hong Kong merchant banking background. One who is atuned into the " Inner, Hidden World of Gold"........we mortals only live on the edge.

Gold is beyond the markets, a cartel.............

http://www.worldnetdaily.com/exclusiv/980706.ex.clinton.govern.b.html

My guess is it's not going to do much today, but the market is touchy on upcoming Q2 earnings reports and will move down later in the week. If enough earnings reports come in below expectations -- and I expect they will -- we are likely to see more fund managers move out of blue chips. While mutual funds invested in blue chips gained 12% in Q1, the same funds lost an average of 0.3% in Q2. If it comes to pass that Q2 actuals are lower than the expectations that kept the blue chips down in Q2, and expectations of Q3 are worse than Q2 -- and I believe they will be -- then a DOW drop to the 8600 range in the next two weeks is likely.

Simultaneously, lower than expected earnings will show up in the high tech sector due drop-offs in Asia exports. So the move from blue chips to tech stocks will be limited, and NASDAQ will drop slightly more as a percentage than the DOW. Fund managers will have a hard time figuring out what to buy and perhaps will maintain higher cash positions. More mutual funds will be sold by investors in favor of bonds than in previous weeks, and treasuries will do well.

What does this portend for gold? My guess is not much that's related to the stock market.

That's my $.02 for the week.

-EJ

Q. What is the only bad thing about the '69' position ?

A. The view.

Q. What is the only bad thing about the '69' position ?

A. The view.

http://www.afr.com.au/content/current/market/markets9.html

Copper slumped to 11-year lows, aluminium to four-year lows and nickel to 4-year lows late last week as the never-ending onslaught of poor news from Asia, mainly out of Japan, continues to undermine these markets. China also played a part.

~~~~~~~~~~~~~~~~~
Poll bulldust may threaten bull run.
http://www.afr.com.au/content/current/market/markets4.html

An extraordinary bull run that has pushed up the Japanese sharemarket by almost 10 per cent in eight days heads into treacherous waters this week as politicians come under pressure to flesh out election promises.

public switched networks are to approach a solution.

**************************************************************
TELCOS, BELLCORE PLAN Y2K INTEROPERABILITY TESTS

Telco Year 2000 Forum, a group of telecommunications companies,
announced today that it has contracted with Bell Communications
Research, Inc., to supervise Year 2000 network interoperability
testing of components for telecom infrastructure. Financial
terms were not disclosed. The testing being supervised by
Bellcore, a subsidiary of SAIC, will help detect Year 2000
compliance problems within the public switched network, including
interoperability of network elements. The forum's members
include Ameritech Corp., Bell Atlantic Corp., Cincinnati Bell,
GTE Corp., SBC Communications Inc., Southern New England
Telephone ( SNET ) and U S West Inc.

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

CNBC stated a few minutes ago that Mutual Fund cash reserves are at a record low. What are the chances of them covering their margin in the event of a normal correction ????

I've stopped looking at general media stories on Y2K because they typically are a waste of time. We have enough information to make an accurate prognosis for the future +/- a few %. The range is from major depression with almost a complete breakdown of international trade to the social and political disintegration of entire nations and regions.

Economicly this means the destruction of valuations based on debt: ie - everything. In the USA hyperinflation can only occure in the electronic system. Without that electronic system the economy will revert to cash and barter. The German inflation experience can not happen in the USA unless the Federal Reserve resorts to Zerox machines to print cash. ( Was invented here! ) Greenspan has mentioned to Bennet that the FRB's will have US$80 billion cash ( total ) available in excess of current cash by Fall of 1999. That is all they are able to print!

Currently US banks have only US$35 billion in cash in the vaults. Currently there is only US$140 billion in cash in the USA and only US$575 billion in the world at large.

With US$5.5 TRILLION in ( M3 ) accounts there is not enough US cash to exchange this at a 1 to 20 ratio. In other words, if we go to a cash basis then there will be only 5% of liquidity available to grease the wheels of commerce. I expect a destruction of valuations on the order of 85 to 95%. Your $100,000 house will bring $5,000 to $15,000. Your $25,000 car will bring $1,000. IF YOU CAN FIND A BUYER.

In Germany they printed cash and increased the denomination size. I suppose they could do that, but my feeling is that if they did then people would simply dump the cash and jump into tangibles of any kind, knowing the jig was up.

The economy in the USA is a huge, bloated mess. There is no way that they can hyperinflate in the old sense ( print paper ) . The threat to the electronic systems will cause people to want to opt out of that system and so hyperinflation via that system will not work either. We are headed for a massive deflationary depression at a minimum.

Rebuttals?

Happy Trails to You, Roy. You will be missed.

Reify: What is your Nikkei target for this move?

Not trying to be funny but they could print 1 5.5 TRILLION bill and the books would balance. More reasonably 10 000 bills adding up to 5.5 Trillion. Maybe not make sense here-- but that isn't the test.

Auric: Really sorry to hear about Roy Rogers.He gave me many many happy childhood hours. But Gene Autry is still hangin in there.

Hats off to Roy Rogers. Another great American leaves us.

Nice article. I am in agreement with your thesis.

If this were Dec 31, 1999, you would no doubt be 100% on target.
How bad it will be depends on what happens between now and then.

It is very doubtfull that business or government will move fast
enough or strong enough to alter your prediction.

GO GOLD.....but not that high!

This, from a retired computer geek who helped to make the mess and
then bought gold & silver with both hands.

Just received an interesting broadcast Email from PEI site:

-------

PEI has taken a majority share holding in Charters Towers gold mining operation in Queensland, Australia. We have received numerous inquiries from clients asking if this investment represents a change in our view with respect to gold. The answer is NO! We have taken this investment based upon our view of the A$ and gold combination. We firmly remain bullish on gold long-term and our investment at this time in Charters Towers should NOT be viewed as a change in our short-term views. The risk that gold could still make new lows under $270 are quite vaild and any new lows after July would warn that the current bear market is likely to extend into 1999 before a final low materializes.

With respect to the prospects for Charters Towers, this mine was closed prior to World War I. It had previously produced among the highest grade ore in Australia and paid out $900 million in dividends prior to its closure. While this mine has been only recently opened for the first time since 1917, its original closure was due to the fact that gold prices were declining during the early part of this century making mining unprofitable in Australian terms. It is a deep mine with workings down even 100 meters. Based upon the geology of this rich area, it is our belief that the potential of 20 to 30 million ounces of gold is realistic. However, this still remains to be proven. Given the fact that this mine was perhaps the richest in Australia prior to WWI, we have taken a pure investment view on a long-term basis given the historical track record. Therefore, our equity position in Charters Towers will be in excess of 50% in order to insure proper funding and management with respect to hedging.

Martin A. Armstrong

----------

I heard rumor that Armstrong was looking at other take overs in mining. Anyone else have any info on this?

Silver expert shares his most recent analysis about the forthcoming bull market in the "Poor Man's Gold."

Mr. Butler draws upon an experience of a friend ( Izzy ) who successfully identified the beginning of the Silver Bull in late 1970s, when silver was about $4.50 per ounce. Subsequently, Butler's friend make TEN TIMES HIS MONEY, ridding silver to $45!

Izzy correctly interpreted that "when the ongoing deficit in silver finally necessitated the withdrawal of the COMEX stocks, the end of the great silver price manipulation and the illusion of abundant silver supplies was at hand."

Ted Butler sees a dj vu silver scenario described by friend Izzy. Furthermore, Kodak's recent silver market action corroborates Warren Buffetts massive silver accumulation.

We are at the MOMENT OF TRUTH, which may well be a repeat performance of Izzy's TEN-BAGGER KILLING.

Izzy's dj vu may be read at following URL by deleting the extra letters "en" in the word "golden" before pasting it to the Internet finder:

http://www.golden-eagle.com/gold_digest_98/butler070598.html

From today's Financial Times:

"China's largest shipmaker, Dalian New Shipyard, has said it needs a 20 per cent devaluation in the Chinese currency to regain the competitive advantage it has lost to rival shipbuilders in South Korea and Japan.

The shipyard's vice-president, Yin Mingrong, told the FT in an interview that there would be a risk of worker unrest and economic instability unless steps were taken to restore the competitiveness of Chinese exporters.

His remarks were one of the first clear signals of pressure for a evaluation from China's big export-oriented industries. The prime minister, Zhu Rongji, has pledged to hold the renminbi steady to prevent more financial instability in Asia."

When will she blow?

- Steve

Ha ha ha-ha ha! Every time I've gone to visit those guys in NJ I felt like I was walking onto the set of the movie "Brazil." They are competent to do the Y2K testing, provided that you give them five years to do it. This is gonna be worse than I thought.
-EJ
p.s. Really nice folks, tho.

This summer of 1998, President Clinton will very likely address the nation regarding the Year 2000 "problem," aka Y2K bug, millennium time bomb, Y2000 computer glitch. I believe the following is what we should be told:

My fellow citizens, Good evening.
I want to talk to you today about a problem that has received considerable attention in recent weeks and months, and which you've probably heard about from various sources: the Y2K problem. While the details often seem puzzling to those of us who are not computer experts, the unfortunate fact is that several million computers, and several billion "embedded systems" will not recognize the date properly when the clock rolls over from December 31, 1999 to January 1, 2000.
Government agencies and private-sector organizations have known about this problem for several years; indeed, it was the result of deliberate actions on the part of computer engineers to save storage space in the 1950s and 1960s, when computers were thousands of times larger, slower, and more expensive. As computer technology improved in the 1980s and 1990s, some forward-looking organizations took the initiative to repair the date-sensitive parts of their computer systems, and are thus well-prepared for the arrival of the new millennium. Sadly, though, many organizations procrastinated; and to be perfectly frank, all of us underestimated the scope and magnitude of the problem, the pervasiveness with which computers have infiltrated our everyday life, and the degree of computer-augmented global interconnectedness that exists today. The chaos theory scientists tell us that the flapping of a butterfly's wings in Tokyo can cause a hurricane in New York; in a similar way, a computer failure in New York can have almost immediate consequences in Tokyo or Frankfurt.
For the past three years, there has been an increasing level of Y2K activity throughout the U.S. federal government and the private sector companies, as well as similar initiatives in England, Canada, western Europe, and several of the other advanced countries. In our country, the Federal Reserve system has been working to ensure that the banks will be ready for the new millennium, the SEC has been working to ensure that publicly traded companies disclose their Y2K risks to investors, and various other regulatory bodies have been imposing strict guidelines for Y2K compliance of safety-critical products and services that we all depend on.
Unfortunately, it has not been enough; and despite the ever-increasing activity and financial expenditures, it will not be enough. One of our greatest concerns is that small business organizations have not paid much attention to the problem; indeed, recent surveys indicate that over 80% of the small businesses in this country have not made any Y2K plans or preparations at all. Quite frankly, these companies run the serious risk of bankruptcy on or before January 1, 2000; and their bankruptcy will not only have a negative impact on the economy, but will threaten the viability of the larger companies, too. The major automobile manufacturers have some 80,000 vendors and suppliers; the commercial airline companies have approximately 17,000 suppliers; and most banks and hospitals are discovering that they interact with 2,000-3,000 suppliers.
Obviously, it's important that all companies, large and small, accelerate their efforts to inspect and repair their computer systems as quickly as possible. If you're a small company, there are a number of free resources available to help you: the Small Business Administration, for example, has a comprehensive set of Y2K information on its Internet site. If you're a large company, you need to remember that the Y2K compliance of your smaller vendors and suppliers is critical to your own success. And if you're a provider of critical infrastructure services -- electrical power, gas, oil, water, sewage, telecommunication services, and financial services -- it's absolutely crucial that the status of your Y2K activities be honestly and completely disclosed to the companies and consumers who depend upon you.
But while we expect that this critical work will continue for the remaining 18 months before January 1, 2000, it's important that we acknowledge the fact that we will not -- and quite literally, cannot -- succeed completely. This does not mean that we will fail completely; we expect that approximately 75% of the computer systems in this country will be repaired in time, and that roughly half of the computer systems in other parts of the world will function correctly on January 1, 2000. But that still leaves a significant number of computers that will not be fixed, and we can no longer ignore the potential impact of those non-functioning computers. There are approximately 8,000 electric power plants in this country, and even though every one of them is working to repair their computers, the most recent assessment from Senator Robert Bennett's Y2K committee ( which held hearings on the subject on June 12th ) is that there is a 40% chance of nationwide power outages. If we lose electric power for even a week, it could cause serious health and safety problems. Similarly, there are 11,000 banks in the United States; while most of them will have fixed their computer systems, we have to plan for the possibility that 10-20% will not -- and even if all of the American banks are ready, they are increasingly dependent on British, French, German, Japanese, Korean, Indonesian, and even Russian banks, many of which are lagging significantly behind our banks in their Y2K work. And by the same argument, if phones and faxes and the Internet are rendered inoperable, or if the airports and schools and hospitals are closed, we'll be dealing with much more than a minor inconvenience. It would be a full-scale disaster, and people would die. No one wants this to happen, many are unwilling to publicly admit that it's a possibility; unfortunately, a growing number of top advisors throughout government and industry are quietly acknowledging that these scenarios are not only possible, but increasingly probable as the calendar moves closer and closer to Jan 1, 2000.
This is not pleasant news for any President to deliver, and I know that many of you are thinking, "Well, you're in charge -- do something to fix it!" But even if the government had unilateral power to control everything in this country, we could never hope to control the Y2K activities of the rest of the world; and it's important to note that over half of the member nations of the U.N. have no Y2K initiative at all. Meanwhile, our government does not have unilateral power to control the enormous, complex fabric of American industry and society; we are a democratic nation of citizens and companies whose behavior is largely governed by free-market forces. We can suggest, we can urge, we can recommend, and within the areas where public safety is concerned, yes, we can pass laws and regulations. But it would be nave to think that the President could simply wave a magic wand and cause the problem to go away. Alas, even in the Federal government, there is no magic wand; and for those who are accustomed to depending on government to cope with emergencies and disasters, I must remind you that the Y2K problem is pervasive. Yes, government may provide part of the solution; but it's also part of the problem. Some of the disruptions that we'll be dealing with will be those associated with our own Federal agencies, as well as the public services provided at the state, county, and city level.
What should you do about all of this? Two things: first, don't panic. But second, and equally important, don't ignore the Y2K situation. We have 18 months to prepare for the impact of Y2K; we don't need to evacuate cities or resort to hysterical behavior, but we do need to begin planning for whatever disruptions and disasters confront us on January 1, 2000. Business organizations often refer to this as "contingency planning" or "risk management," but it's important that we not confuse the issue with comforting words that disguise the seriousness of the situation. If Y2K creates a loss of services for two or three days, it will be little more than an inconvenience; but if key services are disrupted for a month, especially in the middle of winter, it could be a disaster.
You may not think that you're dependent on computers, or that you could be affected by a Y2K computer problem. But we all depend on electricity, water, gas, oil, and other utilities; we all depend on phone, fax, and the Internet; and we all depend on banking, insurance, mutual funds, and other financial services. In addition to these obvious services, it's important for you to begin taking stock of your lifestyle, and that of your family and loved ones, to see where you're most dependent on computers. Transportation ( plane, train, auto, and ship ) may be affected; hospitals and medical services may be affected; universities, high schools, and even elementary schools may be affected. Food supplies, and food distribution could be affected, particularly in urban areas that depend heavily on transportation and distribution infrastructures. The list goes on and on, and while some of these services are universally important, others are associated with individual needs and preferences.
What can we in government do? As I've already said, we can put pressure on the safety-critical industries; we can require them to make a realistic disclosure of their Y2K status, so that we can all make more effective plans. And we can coordinate a national effort to stockpile food, fuel, clothing, medicine, and emergency supplies in strategic locations throughout the country. We can put the best minds in the country, in the best universities and research centers, to work on the problem -- not with the unrealistic expectation that they can provide a brilliant, last-minute, Hollywood-style solution to the problem, but rather with the hope that they can help us anticipate the nature and severity of the problem. And based on that information, we can provide guides, booklets, checklists, and suggestions so that individuals, families, schools, churches, neighborhoods, villages, towns, and cities can best prepare them for what may turn out to be several weeks or months of serious disruptions.
Government can do all of this, and will do all of this in the weeks and months ahead. But when it comes to coping with the aftermath of the Y2K problem itself, it's important to remember that government is more likely to be part of the problem than part of the solution. Government has more computers, and more software, and more Y2K problems that any other part of our society. We will be working to the best of our ability to fix government computer systems, so that we can provide the services and leadership the country depends on; but I would be far less than honest if I promised you those efforts will be completed and fully successful. Even with a fully successful effort to fix all of the government computers, the government depends upon utilities, telecommunications and banking -- just as the private sector organizations do. If the lights are out, the phones are dead, the banks are closed, and the airports are shut down, our ability to help citizens around the country will be severely curtailed.
What this means is that the states will not be able to depend on the Federal government to solve all of their Y2K problems, or to recover from the aftermath of those problems. Given the equally difficult problems almost every state is currently facing with its Y2K efforts, the counties will not be able to depend upon their respective state governments for relief, nor will the towns and cities be able to rely upon the county government, nor will the neighborhoods of concerned citizens be able to fully rely upon their city and town officials. The bulk of the disaster-relief effort may well fall upon community groups: neighborhood associations, church groups, school PTA volunteers, and other groups of concerned citizens who will band together to help each other weather the worst of the storm. Y2K contingency plans can be created by the federal and state government, but the execution of those plans will be carried out at the grass-roots level.
Let me conclude by reassuring you that life will go on -- both before and after the arrival of January 1, 2000. The bad news is that Y2K is a pervasive, nationwide, serious problem that none of us has faced before. The good news is that America has a history of 200 years of overcoming unexpected problems, threats, attacks, and crises. Y2K is likely to be more expensive, in financial terms alone, than World War II; and it could well represent a more serious threat, with more casualties, than any of the wars we have fought in our history. But we have survived every one of these threats and crises, and we have usually emerged stronger than ever. We can -- and will -- survive Y2K too.
My thoughts and prayers will be with each of you in the coming weeks and months, as we prepare for the arrival of Y2K. God bless each of you, and God bless the United States of America.

Thank you, and good night. --- draft speech by Ed Yourdon.

DOW blasting off. Silver seperating from gold. Yen/dollar up.

otherwise the recent indexing of Treasuries to inflation makes no sense. They want the world to hang onto US treasuries, in spite of the horrendous inflation to come. Do not underestimate the resourcefulness of the government to increase money printing capacity or dollar denominations. I'm looking at a 10,000 peso note here by my desk that I got in Mexico a few years back, which as I recall bought me and my wife breakfast. A peso was $.08 when I was a kid living in Mexico. My bet is that if Mexico can figure out how to print money, so can the US.

The average Joe will keep up with this inflation by getting more wage dollars with lower purchasing power, while the cost of his home mortgage drops toward zero. For a while he'll think it's great. The move to hard assets by average citizens comes much later in a hyperinflation, after everyone figures out that even though they are getting paid more, the purchasing power of their paper money is dropping faster, they are now poor. Of course, the wealthly predict this buy buying hard assets, like property and gold, early in the inflation cycle.

When they whole hyperinflation fiasco ends, then we have the deflationary depression you predict.

-EJ

The big telecom companies are bureaucratic dinosaurs. I don't want to panic anybody, but I don't trust the situation at all.

If "we" would declare "war" on the embedded chip problem, there would be still enough time left over to solve the electric power supply problem.
With the telecommunication industry I don't have an idea yet. I only can say, I know a lot of engineers becoming more and more sceptical.

Anyhow, who are "we"??? Who should conduct this war? The government????

All these efforts are going on completely uncoordinated. Can the survival of the society be left in the hands of corporations which are obviously switching from the "technical solution battle" to a legal battle?

Princeton Institute looking for a cobol programer.
~~~~~~~~~~~~~
Y2K: Nuclear Weapons Computer System Pose Worldwide Threat
http://cnn.com/TRANSCRIPTS/9806/14/sm.02.html
~~~~~~~~~~~~~~~~~~~~~
Global Strategic Consequences of Y2K
http://www.yardeni.com/y2kreporter.html

Yardini's latest report - a must read.
But you need 'Acrobat reader'.

As one S/W professional to another, I am coming to the position, in spite of everything I have read ( and I have read everything I can find ) , that there is a reasonable chance that Y2k will not be the total meltdown I had feared.

Be that as it may, here is my concern: Engendering a Y2K panic may be a disservice to society.

The analogy is, What should I do if I am pretty sure that a crowded theatre is on fire?

( 1 ) If I scream "Fire!", there will be lives lost unnecessarily ( in the crush ) if I am wrong.

( 2 ) If I do not scream "Fire!", there will be lives lost because I failed to issue a warning.

Yes, I smell smoke. But I do not want to cause a stampede.

This is an ethical dilemma, n'est-ce pas?

OK, I figured it out. I will scream, "Smoke!"

President's Commission on Critical Infrastructure Protection
http://www.pccip.gov/eo13010.html
------------------------
Section Two: The Report of the President's Commission
http://www.pccip.gov/report_index.html
------------------------
Senate Banking, Housing and Urban Affairs Committee
http://www.senate.gov/~banking/98_06hrg/061098/witness/yardeni.htm
------------------------
Abstracts of GAO Reports and Testimony, FY98
http://www.gao.gov/AIndexFY98/abstracts/ai98072.htm
------------------------
U.S. Office of Management and Budget - Progress on Year 2000 Conversion
http://www.cio.gov/598rpt.html
----------------------
hmmmmmmmmmmmm?

We have a credit system in the US. The long bond made a new high this morning. It's saying deflation NOT inflation. Listen to the markets and not what you read in your text books.

One thing we can say for sure about Y2K - it is the greatest business opportunity for a SW professional since the introduction of Cobol.

rather than the Fed. The last time this was tried was in the '60s by the Kennedy administration. Kennedy was determined to wrest control of the money supply from the Fed and issued an executive order authorizing the printing of United States bills by the Treasury Dept.. The US mint actually printed a large number of these in the period 1963-65 and put them into circulation. Well, we all know what happened to him! Lyndon Johnson put an end to the Treasury Dept. currency float. It is rumoured that Kennedy was also preparing executive orders to issue PM legal tender coins before his death, but I've lost track of the articles on that.

Now it probably wasn't the monetary issue that led to the assassination, and in more litigious times like ours Kennedy's actions, or action by a contemporary president to do the same, would probably be declared unconstitutional by the courts ( Congress, not the Executive Branch has authority over currency- and however little the hard money types may like it, congress has delegated that authority to the Fed. )

The president does have some control over the Fed by his power of appointment, though, and if he wants to force the Fed to inflate he can threaten the chairman's job. The chairman has some power to resist, since his resigning over disagreements can lead to huge political consequences for the president.

- Steve


BTW- these notes are great collectors' items. They say United States note rather than Federal Reserve note on the the face. If you come across one in good condition in an attic or an old trunk, preserve it or take it to a dealer, they have significant value on the hobby market.

Indeed we cannot trust government or large corporations to defend the public interest. Their main motives are and have always been MAXIMIZE Prower and Profits.
Many corporations are trying desperately to hire cheap third world labour to recode and test immencely complex systems. Some of these slave labourors cannot even complete a proper english sentence, let alone be trusted to save large systems from crashing.
Those who leave this problem to the last minute - and we are just about there, will be hiring office temps to manually process their finances etc.
May sound silly but thats where we are headed for......
The more we change, the more we remain the same......

..what will Greenspan use as payment when the EU and Japanese start selling out bonds at market into year end?


HB

Per Yourdan, that's what Klinten *should* say and I agree. But I don't expect that he will say anything like this before the Nov. elections. After all, most people haven't even heard of the Y2K problem, and many more think that it will only be a couple of days of slight inconvenience. Probably 1% of us question whether there might be a significant problem. If he says anything it will be a speech of reassurance ( "we won't feel any pain" ) . He can always make his "oops" speech after the dems get back their majorities in Congress.

Jims ..
I was so shaken by that last impi attack I screwed
the numbers. The CONDITIONS I work under in this
tinder box.. I get the prices by jungle drum download
and my drum doest work so well.
Closes ..
Rand 6.46 as everybody but me decides Tito is a stand
up guy.
Harmony .. 31
dbn-deep .. 14.25
randfonts .. 15.75
rangold .. 5.5
index .. up 85 I think

prices all came off from highs as rand came back a
bit. Looks like they may be up a bit in
noo yoak

spend New Years 2000. I'd also like to know where top military brass are going to be. Of course that will never happen, but it sure would tell you what the level of concern is for those people that see all the real information on the data involved.

The fed may be acting on behalf of a foreign bank selling US bonds on the open market. When they sell bonds they receive dollars. Because of deflation, there is enough demand out there to absorb all sales of US bonds, notes and T bills. As the consumer price index declines below the
zero level into a negative territory there will be an army of buyers for US government paper, especially the non callable long bonds .

I may have erred this morning in selling my ASA, but I don't see any advantage to owning ASA which is denominated in US dollars. Though the SA stocks are doing well in Rands, this would be reversed in dollars?

I'd be interested in any other opinion since I'm not bashful about reversing stock trades.

After readin Yardini's reports it seems that Ed Yourdon is not far off the mark.
All these reports coming out seem to add credence to the earlier worries.
It seems if BC waits too long there will be panic.
Like the financial tumble that is coming.
Y2k is going to be unavoidable.

Wonder why all these problems have to surface at once.

"Life doesn't get better than this"
But why does it have to change???

~~~~~~~~~~~~~~~
PC makers warn of Windows 98 problems
http://cnn.com/TECH/computing/9807/02/win.98.bugs.idg/index.html

rationally, it's me who's crazy. Asia's problems will have no significant impact on the US economy, except in the unimportant manufacturing sector. The dollar will exist as the sole reserve currency worldwide and continue to grow in value util all other currencies are wiped out and everyone transacts all business in dollars. US corporations will continue to increase earnings from greater productivity and lower costs -- there are always more technologies to buy and humans to lay off. Mergers will continue until there's only one, colossal, incredibly efficient corporation in the whole world run by Bill Gates. Oil will fall to $1 a barrel as the ME goes bankrupt and begs to join the EU. Gold and silver will be used only for limited industrial applications and jewelry, like a Y2K Millenium gold coin -- get 'em while ya can. I'm selling my gold and silver and buying Blue Chip mutual funds.

Just kidding.

By the way, my talking dog Paul ran away over the weekend. If you see him, please give him a cigar and send him on home.

-EJ

Still waiting for your new email address.
Replying quickly, not what I enjoy best-
Date: Mon Jul 06 1998 10:18
OLD GOLD ( Nikkei ) ID#242325:
Reify: What is your Nikkei target for this move?
-----
Looks like 20K-21K over a period of say 3-6 mos.
I really must admit to a quick look and a fast reply, should
study the charts more closely, but time being devoted to y2k lately

Heard from an extremely reliable source that there is an arms for oil deal between South Africa and Libya. Apparently SOEKOR ( govt backed oil exploration corporation ) has been allowed to 'discover' oil in Libya. In return for being able to extract this oil, they will be paying royalties in the form of arms to Libya.

According to inside contacts, the Japanese banking crisis
shows no signs of ameliorating. If anything, it's getting worse.

Following last week's news that Origami Bank had folded, we
are hearing that Sumo Bank has gone belly up and Bonsai
Bank plans to cut back some of its branches. Karaoke Bank is
up for sale and is ( you guessed it! ) going for a song.

Meanwhile, shares in Kamikaze Bank have nose-dived and 500
back-office staff at Karate Bank got the chop. Analysts report
that there is something fishy going on at Sushi Bank and staff
there fear they may get a raw deal.

Shame.

while it inflates?
-EJ

Ceteris Parribus, the falling Rand should benefit the SA mines. They
pay their expenses in Rand and sell gold for $U.S. thus when their
expenses are translated to $U.S. their production costs fall while
their income remains the same ( assuming a steady gold price in $U.S. ) .
Accordingly, a mine like Deeps will go from earining nothing in $U.S.
to making $30-$40 million. Since mines like Deeps have no financial
leverage, they are not hurt by the high interest rates imposed to
defend the Rand.

test

http://biz.yahoo.com/finance/980706/japan_must_1.html

U.S. stocks up on late-morning program trade

NEW YORK, July 6 ( Reuters ) - U.S. stocks headed higher in
late-morning trading on Monday after a computer-aided buy
program kicked in, traders said.

"I think there was an opportunity out there and someone
went out and bought," said Brean Murray & Co. trader Lance
Zipper. "It's not going to take much to move these stocks
today."

At 1050 EDT/1450 GMT the Dow Jones Industrial Average stood
up 35 points at 9060. The Nasdaq Composite Index was 13 points
higher at 1906.

Copyright 1998 Reuters Limited. All rights reserved.

http://www.rollcall.com/newsscoops/3rdscoop.html

House Judiciary Chairman Henry Hyde ( R-Ill ) , who anticipates that independent counsel Kenneth Starr will send an impeachment report to Congress this month, has warned committee Republicans and key staff to be prepared to return to Washington on "48 hours notice" in August.

The US can continue and roll over its old debt. The fed inflates ONLY when there is public demand for money ( new loans ) as has been the case for the last 50 years. In deflation, the public demand for money declines because there is declining business activity. People and corporations try to pay off their debts and if unable , they default. They will be pushing on the string without any takers for money. As business activity shrinks, the fed instead of inflating will be forced to deflate by selling their massive $440 B of treasury papers to raise money for the treasury because tax receipts will decline. Selling of US papers on the open market by the fed or any foreign central bank is very deflationary. Every week we get reports of declining economic activity and as that process intensify further as time passes.

Hi everyone. This is my very first post to this forum. I'm thinking of buying some gold and would greatly appreciate anyone taking the time to help me understand this whole futures and options business. Here's my understanding so far: I'm thinking of buying 100 oz of gold ( american eagles or maple leafs or whatever ) . My thinking is that the spot price of gold is going to go way up in around 18 months or so due to, well... you know. Now, just in case it doesn't, I want to hedge that investment and buy some insurance in the form of a put option for $300 per ounce. That way, if gold goes down rather than up, I can exercise my option, sell at $300, and not loose much. Is this how it works? Or am I missing something? Please don't laugh. I'm trying to make sense of all this stuff. Also, please don't assume that I know anything. I may use terms that I don't completely understand. If you detect any misunderstanding at any point, please set me straight.

Thanks in advance

p.s.  I asked this question over on k2 and I got the basic impression that this whole area is not really for amatures like me. Is that your advice too? Please advise.

Non-Y2K brokers face chop
http://www.infotech.co.nz/july_6/nxyear.html
---------------
The Options Clearing Corp.: Embedded system land mines
http://www.zdnet.com/pcweek/y2k/0798/06case.html

Taken to its logical conclusion, if we're heading into a deflationary depression that the gov't cannot influence, all investments, including PMs, will lose value, while the purchasing power of cash, and perhaps PMs, will increase. I ought to get rid of all debt, sell my property, and hold on to the cash until things bottom out. Just that simple. No?
-EJ

Market maven Clif Droke considers we are still in the terminal phase of
the 20-year-old bull market in equities. He asserts, "How much longer
it will last before completing we won't venture to guess, but it could
happen at any time now."

"Nevertheless, we continue to "bite the bullet" and hold firm to our assertion that the bull market is technically over and is merely distributing prior to the inevitable collapse. Admittedly, this is a brave and potentially foolhardy stance, especially considering that market analysts of greater stature than us are predicting one final run to new all-time highs in the indexes before the long-overdue crash."

"In what one analyst called a "leveraged Ponzi scheme," the IMF loaned Japan a $125 billion "stimulus" package designed to bail out their troubled financial sector."

"It won't be long until all of these problems begin manifesting in the general economy the stock market to a large degree. When it does, the facade of economic growth and prosperity that we have enjoyed for so long will finally be stripped away and the true condition of our country will be revealed. Will you be prepared?"

Entire analysis found in the URL below.

Remember to delete the extra "en" letters in the word "golden" before posting the URL to your Internet locator:

http://www.golden-eagle.com/gold_digest_98/droke070498.html

incident where my dog was defiled...read this and understand my true feelings for the IMF and Camdesuss...sheesh...

http://ft-television.com/today/stories97/51809972.htm

Minor is the key word. Not much ooomph to it. Just another optimistic Monday, Silver's been acting kind of peculiar though.

Mr Sharefin: Are you still anticipating a thousand point or megaworse
drop in the Dow this month? All respects to your "IMHO" disclaimer.

My local news over the Fourth of July conducted a test covering the following list of "patriotic" questions....

1. How many stars are on the US Flag?
2. How many stripes are on the US Flag?
3. What is the national anthem?
4. When was the Declaration of Independence signed?
5. Who was the first President of the United States?

In my view, one of the most pathetic "tests" I have ever seen.
I thought to myself that this must be some kind of joke, how could a person NOT know the answers, but alas I was wrong.

They then came back to tell us the average number of correct answers according to a NATIONWIDE study is only 3!!!

http://www.idg.co.nz/nzweb/a25e.html
Transpower test shows up Y2K faults

A quick spot sample from today's WSJ

- The worldwide semiconductor industry, which over the last 10 years or so has been an excellent leading indicator of good times, is in a severe slump. Revenues are expected to decline 2% this year, even though analysts were predicting a 17% gain less than 6 months ago. Semiconductor capital spending will drop to $30-something billion down from $41 billion.

- Foreign investors, who have been living with hard times for a little
while, are buying U.S. bonds in record amounts - foreign holdings of U.S.
treasuries is now over 30% of total debt, up from less than 20% as recently as 5 years ago. U.S. investors, on the other hand, now have a record 54% of holdings directly or indirectly in U.S. stocks, up from about 28% in 1990.

On silver, I've noticed that while the spot price is staying in range, the retail price has been rising steadlily since March. What's your take?

-EJ

I would NOT sell my home . As interest rates decline I'll refinance my mortgage or pay it off. As the unemployment rises, gold will explode upward as money seeks safety and all other prices decline.

I'm neutral at the moment.
Watching and waiting.
My swing chart is still pointing to more up at the moment.
Good solid accumulation over the last week.
Market internals pointing to further gains.

But I am watching for this buying wave to dry up soon.
It should coincide with the rolling over of the Dow.
European indices should be running out of steam soon as well.

My guess is that the next down wave,
Could produce another repetition of last October's fall.
Otherwise waiting in the wings till October.

Hello Promey, Squirrel, All:
Weather is HUMID! ugh!
Everything is GREEN, east Ks was beutiful, rolling hills.
Was a little late arriving, Had a wheel bearing overheat, twice!
Met three very nice men who helped us get our bearing fixed.
Locals born an raised, one just moving out of his house to a new home in the country. Very nice older gents, no foul language, very refreshing! Two of them were friends and one helped the other at harvest time just 2 days ago.
What a life!
We finally got the bearings fixed after 1.5 days.
Huge bearings! My wife thought that squirrel was a very nice person and very smart too.
We are now alittle behind schedule and will be really trucking to get back.
Gold looking a little flatter than usual.
Reading your posts sure makes the dow look scary!
Nicodemus

There's a certain amount of money that keeps flowing into funds ( from retirement funds and such ) without paying any attention to trivial little things like earnings reports. Heck, that's what the fund manager is for, right? Over a weekend cash builds up and it takes a little while to get it invested somewhere.

Problems will begin, of course, when the economy slows enough that a substantial number of newly unemployed not only stop sending anything in but actually start making withdrawals.

Silver seems to be building some strength of it's own. For quite a length of time this morning, for example, silver was up while gold was down. Perhaps there's a faint beat of another drummer.

I'm no expert but here is my recommendation and I should probably
be following it myself:

Find a REPUTABLE COMPANY who sells bullion and start a DOLLAR COST
AVERAGING PROGRAM with them whereby you buy a certain number of
coins per certain period ( one month/two months, etc ) and TAKE DELIVERY
OF THEM ( DO NOT LET THEM STORE IT FOR YOU ) . If gold goes down, your
coins cost you less money; if gold goes up, your portfolio value
increases. The only way you lose is if gold goes down and stays down
over the long term ( the 18 months you mentioned and longer ) . When
you buy put options you will pay lots and lots of money for something
that really is only a paper asset; gold would have to drop a lot to
compensate for the cost of options. Just my Humble Opinion: good
luck and don't forget your guns, ammo, food and water .

In my case, I bought this home three years ago and my home has doubled in value. It makes sense for me to convert my inflated home price into cash now that will buy the same home for many fewer dollars later. I expect the full brunt of deflation to peak within two years. That's not long to rent while I'm waiting for property values to bottom out.
-EJ

According to that material on the IMF. I expect, that the 18 Billions that the IMF is being demanded, from the USofA taxpayer/citizen/worker, is not needed eh!

The future is very bright, and positive, why worry, all is well.
Take Care.

Got to chuckle, you leaving perfect weather here to vacation in heat and humidity! At least they've got great iced tea down there.

Enjoy! Hope to see you when you next visit your folks. ( Sorry, Bart - it's the only way )

Hello JP:
I am playing the same game now, I hope for both of us it works! Home morgages are hard to get for me because I am self employed. I am asking some of my customers to hire me for a few months so that I can get a lower rate!
Nicodemus

You may also want to look at the "Mountie" gold coin ( offered by our kind host Bart )
Mounties have a guaranteed buyback of $310 up to the year 2000. This would give you the physical in hand, with some downside protection, and avoid the paper options/futures market. However, I'm not sure on the spread or costs of options/coins as to what would be most cost effective.

Good luck - and go gold!

http://www.islandnet.com/~ncfs/maisite/imf.htm

MAI---Progressive Internationalist -- New Economic Order -- Global Capitalism ( Corporation )


May be mistake to rush fast-track vote -- Clinton

WASHINGTON, July 6 ( Reuters ) - U.S. President Bill Clinton said on Monday it would be a mistake to press for action on fast-track trade legislation unless the votes are there to pass it, and warned against holding up other trade initiatives.

"You know I'm strongly for fast-track. But if there is no reason to believe we can pass it, it would be a mistake to keep the other initiatives from passing," Clinton told reporters at the White House.

Speaker Newt Gingrich said last month that the House of Representatives would vote on fast-track trade legislation this year, probably in September.

Asked if the White House would push for the initiative this year, Clinton said: "I don't know that anything has changed in terms of the votes."

"I would like to see the African trade bill, which did pass the House, and the Caribbean Basin Initiative, which I understand has been modified in the Senate so it may pass, pass."

Clinton said these two initiatives "would do a great deal of good for the United States and for the countries in our neighborhood and in Africa."

I have bought my home 20 years ago and still l iving in the same house. To me, my home is my castle. I would not sell my home and rent. I like the comfort , the privacy, the convenience, and the surrounding area. I guess, every person has a different agenda.

Nothing wrong with your thinking. Be advised of the following however as you make the trade: 1. You will be putting up about 31,000 for the gold, asuming about $15 premium per coin for Eagles or Maples that will earn no interest for the 18 months you suggest as your time frame 2. Assume that things go as planned for POG, that is , up, as you suggest. How will you know when to take out your put, accept your loss on it, and let your physical ride the tide? What will be your target "get out" point where you have been proven right. 3. Have you determined the value of time ( i.e. how much is a day worth in an expiring option in dollar terms? ) 4. Have you determined how far out you will have your put option expire either in the money or worthless? At the eighteen month time frame, you will need to probably consider buying more than one put during the eighteen month period unless you deal in leaps 5. Have you considered selling a covered call instead of buying a put so that you can see some immediate income from your physical holding? 6. In a worse case scenario, where gold might take a sizable fall, and should that happen soon and with vigor, are you prepared to wait out taking gain on your put leaving you naked the physical if the market turns stagnant at that level?

In short, there are boucoup scenarios inherant in your trade suggestion. Most important however is the erosion of value with the passing of time on your option and the possibility of a stagnant and boring market wherely you earn no interest in your investment for awhile. Other than that, go for it and good luck.

Watch out for sudden jumps in interest rates.
Recent article from England pointed to higher rates due to Y2k costs.
Also OZ analysists thought rates may have to jump a couple of percent due to our monetary conditions.
Saw a recent article where the author thought that if there are bank runs ( highly probable/possible early '99 ) then we could see interest rates double almost instantly.
He explained the process and it sounded feasible.

There is no inflation out there, is there?
Just like Y2k doesn't exhist - sure.

My thoughts on housing matches Allens.
Very cheap houses in a few years time.
30% - 50% of current prices. Ouch.

http://www.cato.org/dailys/4-02-98.html

That Camdessus may not know the world economy from your dog's butt, but he sure knows how to make a buck. The IMF doesn't pay any interest to the countries who give them $$$ until it's loaned out to another country - then they get about a point and a half loan fee and other, unspecified fees too. Not to mention the gold they're holding - do you suppose they've leased any of it out. They don't pay for it either! They don't answer to anyone, and even the US Congress couldn't get them to open their books. Some in the House of Representatives are trying to make that a condition of more money going to them.

While we grouse, they pick up billions a year for wrecking economies and ruining lives. Just go to their home page - their fee structure is right there!

The tragedy is that the countries that are being ruined thusly, are blaming the west for this - Peter Drucker says the tension is the highest he's seen since Europe just before WWII broke out.

BTW, taking your advice - and buying gold and silver. When the world turns on the dollar, and it will, won't be caught high and dry.

This one is a compromise, bought in a hurry. The area is great, which is why it has appreciated. We'll look for the perfect house for us in a year or two.

I'm also betting that capital will find a home in gold, for lack of certainty in the equities and bond markets. Thx for your insights.
-EJ

Days end,
And night will fall again
But that sure night
Dark, cool will be for the delight
Of other men.

For me, neither sunset
Nor evening star
Nor the silver moon
For me - not one regret.

The good days - the beauty
Will flow on as before,
New springtimes blossom
But for me, nevermore.

The green worlds loveliness.
Renewed; the seas blue dress,
The thin cream curd along the shore.
Strong tokens all that I have loved
Lost - evermore.

For me
The dark unknowing night.
Or me - reincarnate to be?
Or the Eternal Light?
Oh Thou Immortal Love
The last deep mystery.

Thanks a lot for the advice. I really appreciate it.

July 6, 1998

Toronto stocks open lower on gold 2

TORONTO, July 6 ( Reuters ) - Toronto's key stock index opened 10 points lower on Monday on weaker bullion and gold stocks.

"Gold will at some point test its lows at $278 and this article in the New York Times makes the Asian economic problems out to be worse than people have let on because they're afraid of scaring the market but I think it's being widely read today," said Douglas Davis, president of Davis-Rea Ltd Investment Counsel.

The Toronto Stock Exchange 300 Composite Index shed 10.11 points or 0.13 percent to open at 7373.60.

Opening volume was 3.8 million shares valued at C$65 million. Declines outpaced advances 202 to 158 with 206 issues unchanged.

Tokyo's Nikkei 225 average closed down 160.79 points, or 0.97 percent, at 16,350.45 while the yen dropped below the 140 threshold against the U.S. dollar. Hong Kong's Hang Seng Index shed nearly two percent on tax cut uncertainty in Japan.

Japanese Prime Minister Ryutaro Hashimoto told Television Asahi on the weekend: "I never said permanent tax cuts. I just said we would review the tax system to make permanent reforms."

A permanent tax cut was widely considered key to stimulating Japan's economy out of recession. National elections were scheduled in Japan for July 12.

"U.S. bond rates just hit an all-time low today at 5.57 percent so the consumer stocks will do well," said David Jarvis of Levesque Beaubien Geoffrion. "Commodities should drop on the U.S. dollar and interest sensitive stocks should rise."

Germany's September Bund bond futures rose 0.24 to a record 108.96 on concerns Japan may not cut taxes.

U.S. markets were shut Friday for a long weekend in celebration of the Independence Day holiday on Saturday.
( $1 $1.47 Canadian )

Also, thank you for responding. Wow, this is great.

http://x2.dejanews.com/getdoc.xp?AN=368750133&CONTEXT=899743996.237043774&hitnum=14

Keep posting. Marvelous! Feet - someone will answer you soon on this. It was discussed a few days back. Put option has a particular name to it ( I forget what it is for gold .. ) . OK, you are smarter than I was!

Now I'm totally convinced that I have no business playing in this sandbox. I'll go back to my own yard now where things are familiar.

Most of what you said in your post was total Greek to me. That just proves that I really do have feet of clay

Thanks a whole lot for keeping me from hurting myself and my family.

And, most of all, thank you Lord Jesus.

My understanding was that inflation is good for people in debt. Assume Somone got an 8% home loan during low inflation times, annual inflation is now at 10%, and thier employer gives them an 10% raise to keep up with inflation. Every year that passes under these conditions the price of the price of the house should increase about 10% a year ( assuming inflation is the only factor ) , but the money that was used to buy that house is steadily declining in value as it is paid back. Somone who had decided to rent instead would see thier rent and pay both go up 10% every year. The homeowner in debt would see his pay go up the same 10%, but his house payments would stay the same.

I would think that deflation would have the opposite effect.

All else being equal Gold prices should be similar. Inflation makes it take more more currency to buy an ounce, and deflation makes it take more gold to buy the same amount of currency.

July 6, 1998

Zapata to separate online unit from other business

HOUSTON ( Reuters ) - Zapata Corp., a one-time oil driller trying to break into cyberspace, said Monday its board decided to split into two companies with an eye toward becoming one of the world's leading Internet players.

Zapata also said in a statement it had agreed to buy or invest in 21 Web sites and electronic commerce businesses and put them under the Zap umbrella: http://www.zap.com.

The Houston-based company, founded during the 1950s by former President George Bush, will split into Zapata Corp. , a holding company with interests in marine protein and food packaging, and Zap Corp., an Internet company.

The company estimates Zap.com will be one of the 10 largest Web sites in the world, based on the number of users, after the 21 transactions.

Among the sites that Zap agreed to buy are the search engine Starting Point, a chat network called Chat Planet and a variety of electronic commerce sites, including book seller Bibliofind, music marketer Mass Music, and Virtual Techonology, which sells computer equipment.

Apart from Internet operations, Zapata has a 40 percent stake in Envirodyne Industries Inc., a food packaging and service supplier, and a 60 percent interest in Omega Protein Inc. , which processes menhaden fish.

It sold off the last of its oil and gas reserves last year, the Zapata spokesman said.
http://www.freecartoons.com/ReutersNews/ONLINE-ZAPATA.html

Isn't there a way to do the put without commiting $$$ ( losing ) ? Commodities 'r' not me, though. Feet - hang in there with us. There was someone advocating a similar approach without the exposure.

You'd need a very big note to write all those 0's on. My point being that people here are basicly paranoid about money. Once they see fakery they will dump the paper for stuff. That's why I think they will never produce anything over $100 bills ( admission of failure ) . It is also a form of control over cash economy ( unmonitorable ) , etc.

Ok, regarding the comnment you made around 11:00 today. What are you saying? Don't buy gold because it will go down in value? If I buy 100 ounces of gold, please expain what would happen in both an INflation scenario and also a DEflation scenarion ( that is if you have the time and/or the inclination ) .
Thanks

We will find you where ever you try to hide. You will be enslaved correcting COBOL for the rest of your life. ;- )

You're welcome.

Kia Motors to be put for international bidding next week

SEOUL, South Korea ( AP ) -- Kia Motors Corp., South Korea's third-largest automaker, will be put up for sale in an international auction next week, its main creditor bank said Monday.

The state-run Korea Development Bank, which has nearly $1 billion US in outstanding loans to Kia, said it will call for bids on July 15. The successful bidder will be chosen by the end of August, it said.

Also Monday, two former top Kia executives were arrested on charges of altering the car maker's account documents to help it borrow money from banks.

Daewoo Motors Co., South Korea's second-largest auto company, said it will form a consortium with industry leader Hyundai Motors Co. to bid for Kia.

Another possible bidder is Ford Motor Co. of the United States, which already owns l6.9 per cent of Kia.

Kia is under court receivership after filing for bankruptcy almost a year ago. It produced 780,000 cars in 1997.

The move to sell Kia is the latest in the government's efforts to restructure the South Korean economy under the terms of a $58 billion US bailout from the International Monetary Fund.

Prosecutors charged Monday that Park Jae-hyuk, a former Kia president, and his deputy, Han Seung-joon, altered documents to show that the auto company was making profits while it actually had kept losing money since 1991.

Using the documents, the two obtained $1.29 billion US in loans from several commercial banks between 1995 and 1997, prosecutors said.

Former Kia chairman Kim Sun-hong was arrested in May on charges of embezzling $37 million US. Kim was charged with using some of the money to bribe politicians so he could take out bank loans and keep the company afloat.

working, no kidding...heh...heh...maybe I am being protected from the impending doom of all the propheciesnow as to my PAL Camdesuss it is so clear he must go,the IMF must go. And I say we need a WHOLE new team IN Washington D. C. and IN State governmenthad to capitalize State if I do it for where the worst of the dirbags live...

uh huh

Interesting post last night that is worth mentioning again. Japan carry trade may be vehicle to keep their banking system afloat. A Japan bank can "borrow" money in yen at 1/2% interest and then invest it in US bonds at 5 1/2% interest. The Japan bank pockets the 5% spread and benefits from the appreciation in the dollar vs yen. Japan can continue to provide further assistance to its banking system by increasing its money supply, thereby making more funds available to its banking system for this transaction. As long as this would continue, it will keep pressure on the yen vs the dollar and will provide a "contrived source of funds" into the US financial markets.

My gut reaction is this is a very dangerous game to play. If the weak yen only helped to support the Japan banking system, then that is one thing. However, I think the impact of a weak yen goes far beyond the banking system. It seems to me to be yet one more bad premise upon which to try to save the Japan banking system without having to bite the bullet and take the necessary reform actions.

I would love to hear any additional thoughts on this topic.

Hmmmmmm...I wonder...we give them the money Camdesuss the dog defiler wants and see if they can cure the world of the other IMF...

Mergers in first half of 1998 surpass all of 1997

TORONTO ( CP ) -- The value of mergers and acquisitions in the Canadian corporate sector during the first half of 1998 has already surpassed the record levels reached all of last year.

By the end of June, Canadian companies had forged 605 deals worth $105.9 billion, up 132 per cent over 1997's mid-year total of $45.6 billion, according to Toronto-based investment bankers Crosbie and Co. Inc.

So far, this year's mergers and acquisitions are worth four per cent more than 1997's full-year total of $101.6 billion, while the number of deals is down four per cent from the 630 announcements made in the first half of 1997, the company said Monday.
http://www.freecartoons.com/BizTicker/CANOE-wire.Merger-Values.html

If people lose confidence in the electronic money/debt infrastructure then you have NO MEANS to increase the supply of 'money'. Once people figure out that 99% of their 'wealth' is digits in some computer system that is possibly going to explode, then they will seek exit into something real, even if it is cash. The fact is that we already have a 'cashless' society for all practical purposes.

50% of those surveyed who said there will be no problem ( 62%*50%=31% ) indicated that they would "move their money around" if they saw that Y2K was not being handled quickly enough. THAT is a big whipsaw, my friend.

My concern is that this time around things will happen much more quickly then in years gone by. Whereas the Great Depression was stretched out over a decade or more we may see even worse dislocations in the financial world in a matter of months and at most a year. I just do not think that any system is solid enough to make it through such a gut wrenching transition .. and then Y2K failures on top of that. I feel that governments world wide will step in and lock the doors. Then you will see CRAZINESS as virtually everyone realizes their complete destruction ( financially ) . People will have no loyalty to any government which has destituted them.

REALITY CHECK: U.S. UNIONS GETTING HEFTY WAGE, BENEFIT
RISES

--Continental Pilots Approve Average 45% Pay Increase --Offer On Table For Peterbilt
Employees To Get 9% Pay Hikes --GM Strike Overshadows Worker Restiveness In Many
Other Unions

By Gary Rosenberger

NEW YORK ( MktNews ) - Recently concluded collective bargaining agreements indicate
labor unions are pushing for and receiving hefty, in some cases breathtaking, increases in wages
and benefits.

Wages and benefits appear to a growing priority in a host of labor disputes that have been
overshadowed by the ongoing GM strike, at heart a contest over outsourcing and worker safety
issues.

A look at other labor actions around the nation shows growing restiveness among workers
and increasing concessions from employers.

Continental Airlines pilots recently ratified an agreement that would give them an average pay
increase of 45%, according to Jim Moody, a spokesman for the Independent Association of
Continental Pilots. But the pay increase put Continental pilots back in the range of pilots at other
carriers.

Northwest Airlines flight attendants are calling for pay boosts in excess of 18% to 20%,
according to a union official.

About 50,000 workers in 35 private hospitals and nursing homes in New York City approved
a new 40-month contract in June that includes a 6% pay increase.

Also in New York City, thousands of building and construction trade workers held a violent
rally last week protesting a Metropolitan Transit Authority contract with a non-union firm to
build a transit command center.

Peterbilt Motors Co. has put an offer on the table offering striking workers pay increases in
excess of 9%, according to a company official.

Some 1,200 workers at Peterbilt's Madison truck plant outside of Nashville have been on
strike since May 3, and have already rejected an earlier agreement they said fell short on pension
and health coverage.

Teamsters employees at the Anheuser-Busch Co. brewery are mulling a five-year contract
offer that will raise average salaries from $60,000 a year to around $66,000 at the end of the
term. Union officials recommended rejection of the contract.

Philadelphia has been coping with an ongoing mass transit strike that began June 1. The
dispute between the Transit Workers Union and the city transit division of SEPTA ( Southeast
Pennsylvania Transit Authority ) is showing scant signs of coming to a resolution, a SEPTA
official said.

All this suggests growing resolve among workers to assert their demands, according to Kate
Bronfenbrenner, director of labor education research at Cornell University.

"Wage stagnation went on for so long, at the same time that companies enjoyed incredible
profits -- they had shared the burden of economic decline, but not the benefits of economic
success," she said.

"Union workers are learning that, if they mobilize, they can leverage employers to share that
wealth," she said.

According to Bronfenbrenner, the changeabout came with the UPS strike in the summer of
1997.

"It taught workers that you can strike and win and it let employers know that strikers can get
2 to 1 public support," she said.

Moody, the Continental pilots spokesman, said that despite the breathtaking increases in pay,
a third of the pilots had voted against ratification of the agreement.

For one, the 45% pay increase put Continental pilots only in the middle of the pay range
among the top five domestic airlines, he said.

"They also got a nearly meaningless profit-sharing plan that only kicks in when the airline
makes $670 million profit," Moody said.

UAW spokesman Paul Krell said the Peterbilt strike, which began May 3, is almost purely an
"economic strike."

"Peterbilt increased its market share last year and saw profits of 71% over 1996 -- but at the
bargaining table they wanted to increase the employee's share of family coverage on their health
insurance," Krell said.

"We also wanted an improved COLA ( cost of living adjustment ) formula; we wanted to
establish the same early retirement plan that we have in other UAW facilities; and we wanted the
same 401K plan the company offers at its non-union facility in Denton, Texas," Krell said.

An official for PACCAR, Peterbilt's parent company, said the striking UAW workers will
vote on a contract Sunday that will raise their average salaries, including overtime, from $43,000
to $47,000 annually, or around 9%.

"The package will put them among the highest paid employees in the Nashville area --
$47,000 a year is a pretty good salary," said the company official, who requested anonymity.

UAW workers in May accepted a collective bargaining pact with Case Corp. after initially
rejecting a similar contract in April.

Case, a major manufacturer of farm and construction equipment, included increases in
workers' incomes through a combination of annual lump-sum payments in the first, second,
third, fourth and sixth years. The payments would be based on 3% of the prior year's eligible
earnings, according to local press accounts.

Danny Campbell, a Northwest flight attendant and a Teamster Local 2000 official, said that
two years of active negotiations with the airline has produced no breakthroughs.

"It would take an 18% to 20% wage increase to bring us to the industry average, we're
shooting beyond that," Campbell said.

The flight attendants are also looking for a retirement package that would provide for 60% to
65% of earnings on the best 36 months of a flight attendants career. Currently, flight attendants
receive about $1000 a month after 30 years of service.

The Anheuser-Busch contract offer to the 8,000 brewery workers appears to be in trouble
after union leadership recommended a rejection.

Teamster officials in a statement said they objected to sub-contracting and pension provisions
in the contract.

Company spokesman Steve LeResche said wage and benefit increases on the order of 11.5%
over five years on a $60,000 salary base is a generous offer. "I would say that's an excellent
contract," he said.

Meanwhile, the one major strike that is not about wage issues is the GM strike.

According to the the UAW's Krell, the local unions involved have not been particularly
emboldened by low unemployment rates and worker scarcity.

"The 4.3% unemployment rate doesn't apply to the Flint strike," Krell said.

"In the late 70s and early 80s we had a severe recession going on and you did see a lot of
concessionary contracts," he said.

"We're no longer seeing that in the 90s -- we're seeing wage gains and improvements in
retirement benefits," he said.

"But concern about job security in the manufacturing sector, if anything, has grown in the
90s because of globalization," Krell said.

"GM did not have the ability or the technology to put a plant in Shanghai back then -- today
they do, and it puts tremendous pressure on jobs," he said. "The pressure on jobs is greater now
than it was during the 1982-83 recession."

Editor's Note: Reality Check stories survey sentiment among business people and their trade
associations. They are intended to complement and anticipate economic data and to provide a
sounding into specific sectors of the U.S. economy.

[TOPICS: MNREAL]

09:10 EDT 07/06

Anonymizer email received OK.....except I can't reply to let you know, whoever your are. Thanks for the test.

http://www.chebucto.ns.ca/~an388/text.html

http://www.usagold.com/

http://www.golden-eagle.com/ you have to retype this one and take out the en on the end of golden, dont ask...

http://www.investor1.com/

http://www.users.dircon.co.uk/~netking/murabitn.htm

Indeed, a worthy abrogation of your responsibilities to love your neighbor. If it was you next to you then you would want to know wouldn't you? Confusing, but you get the picture.

We can discern our thoughts and intentions by comparing them to the two greatest commandments: 1 ) Love God above everything, including your own life. 2 ) Love your neighbor as if he were your own soul. In this we all fail and must fall to our knees asking mercy of the One who died for us all. Mercy and grace freely flow to all who ask.

Yourdon has a good point here. In 1998 what is preparation will be considered 'hoarding' in 1999, etc. By definition, a matter of timing and how the government 'defines' things.

If you can help one other person to prepare for themselves then you have done a great service. For the 100 who scoff at you.


Consider the embedded systems problem. June testimony before congressional commitee, 8 of 10 electrical utility reps ( representing 66% of USA power generation ) said they were still in the assessment/inventory phase. One rep said they stopped counting after 300,000 embedded systems. These people have no clue what the size of their problem is because they haven't figured out what their problem is yet. They have no started methodical remediation because they do not know what is important yet.

I'm not sure what you are looking at which reassures you of a better future than you had first imagined. I know a few DEC folks who poo-poo'ed this but said 'they will take care of it' without a thought as to WHO the THEY is. If most IT/IS types give this view then I must wonder seriously about the 'THEY' that they are speaking about. These people haven't done any research. They are running on pure feeling.

It wasn't me.

as my posts last night made it out to be - I hope.
They were aimed at fence sitters and procrastinators. Of course there are none of those among us Kitcoites! What with Sharefin's posts we will all be prepared in time.

In my experience most people don't take impending circumstances as seriously as they ought. Whether it is warnings for snow, floods, hurricanes, or just strong winds - they never figure it will get bad enough to affect them much. So they are caught on the interstates with summer tires or still in their homes when escape routes are cut off.
Same for those of us who still eat high cholesteral diets, don't exercise enough and weigh too much. Not 'till we get kicked in the chest will we start doing things differently.
Same for Y2K preparations. I know many folks whose concept of stocking up on groceries is an few extra cans of this and that, an extra jug of milk, a couple extra packages of bread and meat in the freezer, a full gas tank, and maybe some candles left over from Christmas. Buying GOLD and SILVER never enters their mind.
I hope we are so lucky.
Maybe with the threat of scrounging in garbage cans like some had to do in the 1930s - THEN fence sitters might buy a CASE of the beef stew on sale instead of only two extra cans. Then they will be prepared when friends or neighbors drop in for dinner because their shelves are empty. If most city folks were thus prepared then one day of power outages and empty store shelves would not turn into general panic.
As to the medical preparations - it may be wise for us to consider such things anyway - regardless of Y2K. Having extra cough syrup sure beats having to endure a night without. And putting off children until we are prepared to support them is good advice any time - unless the biological deadline declares now or never - hard choice that. As to buying Gold and Silver - just one GOLD MOUNTIE from BART and twenty 1oz SILVER coins from one of those bait and switch ads would be better than nothing.
But if Y2K ( or the biblical prophecies for those who believe in them ) do hit us harder than we expect, then some insurance would be prudent. It is truly hard to tell how much we may need to push some people to get them to move. We run the risk of coming off as scaremongers and being ignored entirely. But if we don't try - then we would berate ourselves for not having tried hard enough - no matter how hard we had pushed.

In inflation, people that owe money pay their debts with cheaper dollars. In deflation, the reverse is true. In deflation, the purchasing power of money increases and for people that have no income it's almost impossible to pay off their debts so they default.

production of cute little solid gold bears...Hmmmmmmmmm...people that make fun of goldbugs, novice investors and certainly the companions of everyone here on Kitco would buy one...yeah...between this and my gold sombrero idea for Cuervo we could change the face of the gold market...
yeah...

As you point out, so long as the Japanese interest rates are low compared to those in the US, printing more yen will not help the Japanese economy since those yen will not stay in Japan.

Also, so long as the corporate tax rate in Japan makes it difficult to achieve any real rate of return on investment compared to the return on just investing the money overseas no yen will stay in the Japanese economy.

The banks will lose out much more by the loss in business, the loss of depreication of colateralized property from forclosures and general contraction of the economy than they gain from the spread.

They already have.

Maybe his keyboard melted during that heatwave last week.

Hope he's sharpening that golden sword of justice - we're going to be needing it! Whoosh!

I'll buy 2.

I am new to this site and a novice at "gold investing".

Can someone inform me or point me in the direction of an
explanation of the "gold derivatives" market, how it
works, and its affect on the POG. Thanks!

Hiya Guys ( gender generic ) --

Can anyone fill me in on what's supposed to transpire tomorrow? Agenda? Expected announcements? What are gold longs listening for?

Thanks in advance!

If people lose confidence in the electronic /debt infrastructure we could have massive bank runs. It's possible that interest rates may spike temporarily but the long term trend is definitely down.

Silverfox: The weak yen is killing the Japanese bank's lending capacity.
This is the reason that despite give-away interest rates, the Japanese
money supply remains sluggish and Japan remains in recession.

They dynamic works as follows: The Bank of Japan adds to the monetary
base by buying Japanes T-Bills. The increased yen supply causes the
yen to decline against the dollar. As the dollar appreciates, the
value of dollar loans on the balance sheets of Japanese banks increases.
Japanese bank capital remains the same because the Japanese banks have
dollar liabilites that were incurred to make the dollar loans. However,
the ratio of capital to outstanding loans declines falling below the
8% required by the BIS. The banks must curtail or contract loans and
consequently the Japanese money supply remains stagnant despite massive
stimulus from the BOJ.

What better symbol of a Bear market in gold?

would the respondent also toss in the Meaning of Life, please...

My thoughts exactly.

feet: Here is a simple way to look at gold ( bullion ) and inflation, deflation -- with focus on the USA.

Inflation: Straightforward -- usual scenario for a gold bull. Commodity prices ( especially oil ) , wages, etc going up. Gold producer profits go up due to increased price of gold. Gold stocks rally.

Other inflationary scenarios: US dollar crisis, with rising interest rates ( like 1987 ) . Net outcome -- US dollar devalued on foreign exchange.

Also -- an Oil crisis will do the same.

Deflation: Rarely occurs, so most people have little experience. During deflation, the economy plummets -- decreased production, increased unemployment, etc. Just like a recession, but much worse. Real estate drops due to a lack of demand, and high bankruptcy rate. Debt ridden individuals are wiped out. The money supply multiplier decreases due to the collapse of the economic engine -- M2, M3 plummet, despite attempts by the FED to prime the pump. Federal income tax receipts drop precipitously. Interest rates, long term and short term drop, due to the lack of demand for loans. The cost of labor drops along with plummeting interest rates. Gold bullion prices may drop, but more slowly than real estate, and paper money. Barter economies based on the use of commodities, services or precious metals flourish.

Gold producer profit margins go up due to reduced cost of production, despite a possible lack of rising gold prices. So gold stocks rally, eventually.

The problem with the gold deflationary scenario is that there are several pitfalls before gold stocks rally. First, the anticipated market collapse must come first. Secondly, the cost of labor and materials costs must also drop, causing gold producers profit margins to rise.

Currently, we are far from this scenario where gold producer profit margins rise in the US, though it is rising in a number of foreign currencies. I still don't know if we will have an inflationary period first. All depends I think on how hard our impending recession hits. If Europe and South America go under, the US is sure to follow.

It is certainly a good time to have some of your wealth in physical gold or silver, given the uncertainty of the times. One advantage of physical gold is that it cannot vanish like paper in a puff of smoke, and it is not someone else's liability. All you need to assume is that the price of gold will not drop any more. If you have any doubts, buy a little at a time -- cost average. But -- I would begin now -- don't wait until June 1999.

Yep, just doin' my bit to keep things in the proper perspective.
Not a slam on you, Boro...just perspective for a tall order to fill.

Anyone know the background of that? Is it a warrior pre-fight move or

something?

Striking auto workers, and bank workers, and other workers really

getting pissed off in South Korea.

http://news.bbc.co.uk/hi/english/world/asia-pacific/newsid_127000/127276.stm

Cheeese louise, I didn't even notice the trouble stemmed from an

IMF agreement till I checked the link on preview. REALLY.

read them all. You will have to remove the en on gold...don't even ask...

http://www.golden-eagle.com

and hit submit...

Wall Street analyst Wayne Crimi continues to forecast the coming of the bear. Furthermore, he provides ample supporting arguments for his view.

"stocks are much more expensive than they look based on current
PE ratios and free cash flow levels."

"There simply are very few businesses that possess the kind of advantages that are usually necessary to sustain above average returns over the long haul. In the mean time, stocks are very expensive even discounting this favorable state of affairs."

"Aggregate U.S. business is selling at 2-3 times its
average selling price depending on the criteria used. It is also
selling at over twice the replacement cost of its assets according
to a recent study I saw. I believe there is virtually NO MARGIN OF
SAFTEY in almost all stocks purchased at these levels!"

Wall Street Analyst provided a table containing 30 economic and financial parameters, which underscore the markets over-value. The table data covers a 10-year period from 1988 to 1997. A wealth of pertinent financial reference data.

Even the Fed thinks the stock market is over-priced: "According to the Federal Reserve's model, stocks were 20.2% overvalued as of June 30, 1998."

Mr. Crimi's full report is at URL below. It's necessary to delete the extra letters "en" in the word "golden" of the URL before pasting to your Internet finder:

http://www.golden-eagle.com/gold_digest_98/crimi070598.html

China predicts closer ties with US military
http://www.news.bbc.co.uk/hi/english/world/asia-pacific/newsid_127000/127390.stm

Trivia quiz: who ( fictional character ) claimed "that his method of writing was to hook his gonads in parallel with his thalamus and disconnect his cerebrum."

Over the weekend, the Clinton News Network had a couple minute report identifying gold as being the WORST POSSIBLE investment out there. The "analyst" being interviewed said something to the effect that you'd "...be better off buying an oil tanker to park in your back yard than to buy gold".

My take on a report like this from CNN is that the "bottom" for Au is probably right around the corner. Why? Because in typcial fashion, the masses are all flocking ( and bidding out of sight ) the ONLY investment mechanism out there - which is the stock market ( via mutual funds ) . Remember, this was the same group that promoted the new prosperity of Asia back in '96 and early '97. By definition ( back at that time ) the Asian market was the only place to be - because all you had to do was to look at the evidence. Anyone who talked about fundamental weaknesses tied to currencies ( or the like ) would have been viewed as a nutcase.

I expect that anyone watching the recent CNN Au report would have felt like the biggest idiot on the planet if they had been recently buying gold ( much less continuing to buy gold now ) . The immediate reaction for the normal viewer was to sell any gold holdings and shift over to join the rest of the herd in the stock market mania. The power of TV to create the kind of emotions like the CNN report are tremendous. I expect that those few "unenlightened" people out there who suddently discovered that they are "foolish" enough to have gold holdings are calling their brokers today so they can unload their "useless" ballast.

Pushing aside the obvious emotional response that CNN wished to impart, I took the report as being a heartening indicator. CNN is successfully doing its part to push everyone out of the AU market and into stocks. Once the process is complete ( and goldbugs have bought all they can ) the whirlwind will come back the other way with a vengence. Paper assets will burn up in the backdraft while Au will be the "investment" of the day.

Take heart all and buy more Au - I am

Here's an even SIMPLER way to look at gold ( bullion ) , inflation and deflation. Take out two tablets and across the top of one write "inflation", and label the other one "deflation". Place them side by side on the table, then dump your bag of 100 gold coins on top until they are out of view. Now sit back and just look at that gold. Simple.

got simplicity?

No slam intended by me either... It's just that very highly-paid "experts" haven't figured out the whole scope and impact of the derivatives schemes on gold prices, after years of intensive study and work. Most of us here have an overview knowledge only of how these things work and how they could come unraveled.

However, I think that tolerant1's suggestion of reading Ted Butler's works is a very good one. It seems to me that his focus was so not so much on gold, as on silver.

I, like feet of clay, appreciate help for beginners.

big time if it had not been for the Asian factor, the rising U.S. dollar
and the demand for U.S. treasuries. Several of the inflationary scenerios
you mentioned, like increasing wages, large credit demand, and increasing
money supply stats are currently ocurring aren't they? They've been tempered some what due to the above mentioned items like Asia, so I'm not sure, anymore, what conditions are looming on the horizon. All I know is from what I've read here and from other sources, that tell me we have severe imbalances in our economy...too high a dollar, too high a stock market, too large a trade deficit, etc......Fox-Man

Don't mean to confuse and don't let minor confusion stop you ( feet ) from pursuing your education about deivitives -- and, to answer I believe Boro's question, derivitives are basically gambling games based on the underlying commodity wherely a producer can hedge his crop ( in this case mine output ) , users can guarantee a steady supply at a predetermined "future" price, and speculators can ride the coattail. Be advised that the large majority of futures contracts are never delivered or accepted, they are either bot back or sold to complete the round turn, the bookies take their commission and the celebration or commiseration begins.

The issue is: if you buy a put, and the price goes up, you lose you premium or a part of it. You may complete the round turn ( the buy/sell or the sell/buy ) at any time before expiration. Of course, it can expire worthless, as most do -- called an out of the money put, or it can expire with value -- called an in the money put and you get whatever intrinsic value is left sans the time premium, which will have eroded to nil.

Of course one can hedge a derivitive as well, such as buy one put and buy one call simultantiously, in the event the trader expects a large move soon. When and if it happens, simply lift a leg, take the loss on the bad side, let the good side run. Sounds too easy, but that's the basic strategy. Major bucks won and lost in this game.

Anyway, feet, continue to seek out the best way for you to play the game -- there's nothing like it for the blood pressure There is plenty of help on this site, don't be bashful with your questions to any of the posters, we are all here to help..

to Korea and have the workers shave his head. Uh HUH...

Glad you made it okay. Your kids are great too!

Your compliments are mucho appreciated.
When you said that I was a warrior -
should we tell Promey that I've a shaved head?
Just don't include me with the aryan skinheads.
I prefer allusions to Yul Brynner or John Henry.

I should worry, not you, about you not being able to use the number 6 on your key-board. You get protection, I get worried eh! : ) : ) : )

My take on the IMF and Washington is the same as you.

We in Canada have a double problem, we have to clear out the USofA- Canadian Lackey's, then we have to get citizen's elected that understand the actions of those "Progressive Internationalist's" that are USofA citizen representative's ( corporation's ) in the USofA Congress.

Hell, I suggest such a citizen/worker/taxpayer representative cleansing, in Canada's Parliament/Provinces/Communities is an impossible task.

At present, to have citizen's understand the orchestrated and conscious actions of Global Capitalism ( new economic order ) , and paper wealth/Gold/Value has been an impossible task for me, as one citizen, attempting to get a reasonable handle of understanding, on such complex economic matters.

Yes, the powers to be ( corporation's ) will have/has complete control, by default, as happened to the good people of Germany, in the 20's and 30's.

Everyone has freedom, but not the freedom to act in one's best interest or cummunity interest. The nail that sticks up, gets hammered down eh! A citizen is expected to Be Quiet....Consume....And Die.

Take care

for everyone at kitco...you could spend hours running through all of the different links in here. I sent it out to a bunch of folks and may have missed somebody on my email...so here ya go...

http://www.zdnet.com/zdhelp/howto_help/freebies/free_1.html

In part, you said:
"...The issue is: if you buy a put, and the price goes up, you lose you
premium or a part of it. You may complete the round turn ( the buy/sell
or the sell/buy ) at any time before expiration. Of course, it can
expire worthless, as most do -- called an out of the money put, or it
can expire with value -- called an in the money put and you get whatever
intrinsic value is left sans the time premium, which will have eroded to
nil. ..."
My take on interpreting your explanation is that you somehow managed to mix together elements of futures contracts with options. Did anyone else have the same take on this?

perhaps I should have said if the price of the underlying commodity rises, the price of the put declines, is that any clearer, sorry.

But to the question of whether derivitives have any effect on the price of gold ( or other commodity ) , my opinion is that they do not in general but do tend sometimes to drive the price close to a striking price, sometimes right on it, at expiration so that there is no intrinsic value left in the put or call....

Having short or no hair on one's head prevents one's opponent from grabbing it - a very painful way to get yanked around.

All - thanks for the links to beginner sites.
I too hope to put something away as I can afford it.
Right now groceries are my priority.
Maybe it is my stomach grooowwwwllllliiiinngggg! ;- )

http://www.pe.net/~genetrix/plague.htm

Just being persistent. Any word or idea on what we should expect from tomorrow's meeting? Thanks.

and only now throwing up my arms for the warmest of post-Independence Day greetings!
If the shirt fits...wear it. It does and I have--with PRIDE! NAMASTE

got silver and gold!

July 6, 1998

Government reserves down by $590 million US in June

OTTAWA ( CP ) -- The country's official international reserves dropped by the equivalent of $590 million US in June, the Finance Department said today.

The reserves stood at $19.974 billion US at the end of the month, including $16.677 billion in American dollars, $490 million in other foreign currencies, $144 million in gold and $2.663 million in special drawing rights and the reserve position in the International Monetary Fund.

Government operations reduced the reserve by $801 million in June; increases in other sectors produced the net drop of $590 million.

The reserves reached a high of $22.422 billion US in March this year.

they want, an I never ever did notice, when I had em by the throat and was a pullin that out!!

What throws me off in your text is the discussion of completing the "round turn" of buy&sell or sell&buy VERSUS the more likely outcome that they might expire worthless. Only OPTIONS can expire worthless. Futures CONTRACTS require either a round turn as you described, OR fulfilling the terms of the contract by accepting delivery ( if you bot ) or making delivery ( if you sold ) .
That is where I had the disconnect in your text. Couldn't make out which type of commodity paper-oddity you were aiming at.

Hey I like that! Commodity paper-oddity. Somebody should be writing this stuff down!

got wit?

I found this search engine in your 'freebie' link. Use it to look up William Clinton....It's a hoot!

http://pages.prodigy.com/BAPT37B/email.htm

Do these guys know you well enough to take your sense of humor?

Part of my 401 ( k ) was invested in GICs, Guaranteed Investment Contracts, in the early
90s. With the Executive Life collapse this part of the account was frozen on March 31,
1991. Not only have I not received all the principal from this frozen account, I have
received zero interest. Over seven years in a booming economy and this issue still hasnt
been resolved. What will happen if the paper pyramid collapses? You might not live long
enough to see it resolved.

Central compound...I can assure you a robust toast was raised in your Honor...

CEI GOLD: COMMITMENTS OF TRADERS

Futures World News - July 06, 1998 14:39


7/06/98 --FWN--As of Jun 30,1998
( CONTRACTS OF 100 TROY OUNCES )
-- --- --- LONG CHG SHORT CHG %OI
Non Commercial 5,022 -419 40,939 -2,017 14.0
spreading 15,542 -784 15,542 -784 9.4
Commercial 111,528 +340 77,599 +4,210 57.4
Tot lrg trader 132,092 -863 134,080 +1,409 80.8
Small traders 32,624 -1,491 30,636 -3,763 19.2
Total OI 164,716 -2,354
******************************************************************
Be sure to check out Steve Kaplan's site @ http://www.investor1.com
He does a pretty good job, IMO, of explaining these COT numbers.
Thanks,
Fox-Man

In the movie Deep Impact
The President of The United States makes a speech
that starts out very much like the one you posted.
He tells the nation that the government had known
of the asteroids for years and many departments
had been working with other nations for a solution.
Now it was time to tell the people and try to avoid
a panic. He declared a price freeze at the instant
and other emergency measures, etc. etc.

I agree with others
that both Deep Impact and Armageddon
( and other disaster movies ) are intentional moves
on the part of the government to prepare us for
a REAL disaster. First let us see fictional scenarios
- that way the real warnings may not induce panic.
They hope.

CEI GOLD: COMMITMENTS OF TRADERS

Futures World News - July 06, 1998 14:39


7/06/98 --FWN--As of Jun 30,1998
( CONTRACTS OF 100 TROY OUNCES )
-- --- --- LONG CHG SHORT CHG %OI
Non Commercial 5,022 -419 40,939 -2,017 14.0
spreading 15,542 -784 15,542 -784 9.4
Commercial 111,528 +340 77,599 +4,210 57.4
Tot lrg trader 132,092 -863 134,080 +1,409 80.8
Small traders 32,624 -1,491 30,636 -3,763 19.2
Total OI 164,716 -2,354
******************************************************************
Be sure to check out Steve Kaplan's site @ http://www.investor1.com
He does a pretty good job, IMO, of explaining these COT numbers.
Thanks,
Fox-Man

Girls pulled hair and guys did not....and if some guy wants to pull hair
he jus better watch out!!

CEI SILVER: COMMITMENTS OF TRADERS

Futures World News - July 06, 1998 14:39


7/06/98 --FWN--As of Jun 30,1998
( CONTRACTS OF 5,000 TROY OUNCES )
-- --- --- LONG CHG SHORT CHG %OI

Non Commercial 30,414 +1,044 11,433 -435 26.2

spreading 1,898 -2,339 1,898 -2,339 2.4

Commercial 18,825 -10,305 52,652 -8,852 44.8

Tot lrg trader 51,137 -11,600 65,983 -11,626 73.3

Small traders 28,761 -449 13,915 -423 26.7

Total OI 79,898 -12,049
*********************************************************************
Sorry. I haven't figured out how to keep the columns seperated...
Fox-Man

Maybe if we checked the Chinese Government he would show up on the payroll.

there are lot's better thing to be got, is all I'm sayin'...

All: while I haven't had a chance to recalculate inflation at the "weekly necessity level" here in North Texas ( was running +11% last year ) , I can point out to each of you the simplest observation:

Either a small drink is now $1.00 OR there is no small drink listed anymore at the fast-food seller ( it's been cleverly renamed "regular", and the remainder of the drinks renamed "super-duper" and "mega-gut-buster" etc. )

Inflation is rampant in America - being hidden in reduced product size:

1. Anyone know what a "Payday" candy bar is? They are FLAT now, but in my youth were ROUND.

2. Reduced fruit juice content - Warning! Contains minimum of 20% fruit juice!

3. Ever larger & grandiose packaging: Grandma's brand cookies - the pacakge depicts a massive cookie, but now they are quite small.

4. Scott's Mega Roll paper towels - disappeared, then reappeared with a new name, but now distinctly small paper sheet count.

We ALL are aware of this inflation scam - yet collectively we seem to doublethink it away.

Is there anyone out there who remembers the mass of a Hersey choclate bar from the 1950s?

Spud, 1776 NOW!

http://www.mg.co.za/mg/za/news.html

Let's play crossword puzzle. What is a four letter word for the following?

"non-interest bearing deposits of a fixed component"

According to the EU "Stability Pact", it is that with which non-compliant countries MUST pay their fines. See the paragraph below from a FRB-SF paper.

"In the event that sanctions are implemented, the stability pact calls first for countries to contribute non-interest bearing deposits of a fixed component, not to exceed 0.2 percent of GDP, and a variable component equal to 0.1 times the excess of the government deficit as a percent of GDP over 3 percent. The overall sanction amount cannot exceed 0.5 percent of GDP. There is still a difference of opinion concerning how this ceiling should be applied. Germany, the Netherlands, and the European Commission want the fines to be applied cumulatively, while most other member states want 0.5 percent of GDP to represent an "absolute ceiling," even for a deficit which persists for a number of years."
http://www.frbsf.org/econrsrch/wklyltr/el97-23.html

July 6, 1998

Japanese leaders send contradictory tax cut signals, hurt markets

TOKYO ( AP ) -- Japanese leaders backtracked Monday from suggestions that new tax cuts were in the works, roiling financial markets and signaling a possible rift in governing party ranks.

Foreign Minister Keizo Obuchi had said on the weekend that permanent tax cuts to stimulate the troubled economy were a "promise." But government spokesman and deputy chief cabinet minister Teijiro Furukawa said Monday that Obuchi had misspoken.

Obuchi made the statement after meeting with U.S. Secretary of State Madeline Albright in Tokyo.

Media reports over the weekend said the government was considering up to $29 billion US in income tax cuts for next year to boost consumer spending and help spur growth.

Even if Hashimoto's Liberal Democratic Party takes a beating at the polls, it is in little danger of losing effective control of the government; it still holds 262 of the 500 seats in the more powerful lower house.
http://www.freecartoons.com/BizTicker/CANOE-wire.Japan-Economy.html

that Oriental wisdom, why would anyone want to deny a FOOL a handfull
of hair, while you take all he's got!!

Tidbits from a Reuters news release...You could just die laughing.

"What we are seeing today is some build up in anticipation of some good
earnings coming forward," said Robert Froehlich, chief investment
strategist at Scudder Kemper Investments.
"Now we are in the heat of the earnings season, nothing else matters,
and we have made it pretty easy for companies to meet or beat
expectations. I think we are going to see a summer rally," Froehlich
said. [GET THAT--"...we have made it pretty easy for companies to meet or beat expectations"! He's saying the idiot investors don't realize the companies' profits are dwindling and they don't care...they will continue to bid up stock prices as long as the meager earnings projections are met. As a consequence, they project nice, low, beatable earnings figures. What a scam. And the brokerages don't do the intellegent thing which is to lower their "BUY" recommendations, so Ma and Pa never know it's past time to sell.]

"I think we have made it past the pre-earnings disappointments so all
the bad news is pretty much behind us," Froehlich added.
[Yep, behind us like an avalanche.]

Read the whole thing here:
http://biz.yahoo.com/finance/980706/wall_st_mo_1.html

better methods for people to inter-act and communicate. Government and the media are already suffering greatly. Who knows...the more people talk to each other things may change. In the US for instance a block of people in the tens of millions communicating...reading the thoughts of others who feel generally the way they do...not each and everything but generally...it will... ( hands up in the air on that one ) have a positive effect/affect.

FOCUS-Oil prices dive as Iran accused over output

LONDON, July 6 ( Reuters ) - World oil prices slid below $13 a barrel on Monday after Venezuelan accusations that fellow OPEC heavyweight Iran had overproduced and predictions of a sharp increase in Iraq's crude exports.

Exact Iranian production figures are a vexed issue and no-one will know the level of OPEC members' compliance with the new output levels until next month when independent monitors give a verdict on July output.

The figures came from shipping sources who said there has recently been an increase in the number of vessels due to load with Iraqi crude this month.
http://www.freecartoons.com/ReutersNews/OIL-MARKETS.html

--LONG TERM BEARISH FOR SA MINERS! Old hedges look terrible now with RAND at 6.75 to dollar, and as RAND falls further toward 7,8,9....? those hedges will look even worse! SA miners afraid to hedge as they see the RAND plunging even further! Everything involved in mining in SA is now soaring in cost and will only increase costs longer term. Buy at your own risk as the gold price may fall even further if the SA deeps decided to hedge at these prices! Thanks to Donald's 6:55 post for providing this information!

you'd better cut out all this fighting talk or I'm goin' to tell everyone what a softie, new-age compassionate kind of guy you really are.

YAHOO UP 26? LOFL!!!! AMAZON. COM UP 15? LCOS UP 20?What a perversion of value!

I share with you the feeling that this meeting tomorrow will be important.
I think the heads of the European CBs and of theee ECB will do the following:
1 ) Try to find common ground in preparation of the July 11/12 BIS meeting in Tokyo.
2 ) Keep their future gold policy completely confidential ( because every statement too pro golg would shoot the goldprice to the sky and they will want to avoid any kind of revolution. Remember, these guys are not only bureaucrats, they are also high powered financial market diplomats. )

Now, number 1 ) has a few subpoints:
1a ) - how to avoid a crash of the US$: this is very crucial, because the creation of the EURO will demand a decision of each national CB to what extent they will use the EURO as a reserve currency. The national CBs of the 11 member states still exist for another three years. If they would sell off all their dollars and buy EUROS, they would crash the global financial markets right away. If they wouldn't use the EURO as a reserve currency at all they would make themselves ridiculous and the EURO a non-event. Both extremes are very dangerous. They need to find a balance which avoids both extremes. But without hurting the dollar somewhat it will not work. Therefore: I expect the dollar to fall in the near future.
Does anybody see another consequence?
Even if people in America think "these European Socialists, what the hell do they want!" we should be aware that these Europeans own a lot of dollars, and at least the French are eager to aggressively compete with the US$ as a reserve currency. Aggressive or not, this new animal will compete by its nature and the "European Socialists" are too rich thanks to the powerful capitalistic component in their economy ( which Americans tend to forget ) , and have too much good money to just think this EURO thing wouldn't affect the dollar in the near future.

1b ) They must find common ground what to do with the dollar/Yen relationship and how their own actions affect this relationship. The BIS doesn't meet just for fun in Tokyo a few days later. In my own logic, but I'm not too much of an economist, they have to offer something for that issue. A little side effect of their weakening the dollar might be that this helps the yen. But this is of course limited by the possibility that this effect could at the same time weaken the Yen relative to the EURO.

My overall assessment is that the EURO will be a strong currency, stronger than the DM. ( I think the differences in the economies of these 11 countries will turn out to benefit the whole area, not weaken it. For instance: there will be more choice for investment locations and low wage areas will benefit from such decisions and therefore benefit the whole. )

I'm also very curious what other people think of these upcoming events.

I'll tell big sister, and she'll clean your clock!! neenar neenar neenar

The rand was hit by the uncertainty that surrounded the
appointment of Labour Minister Tito Mboweni as the next
Reserve Bank governor, falling to a new low of R6,73 to the
dollar and R11 to the pound in early morning trade. Deutsche
Morgen Grenfell head of trading Chris Wilde said the fall in
the rand made "a big impact on commodity export stock".
Despite the rand firming mid-morning to around R6,60 to
dollar, commodity shares and especially gold producers rode
the day out, closing slightly off their highs, with the all gold
index gaining 7,66%, 82 points, to close at 1 153.
The rand hovered around the R6,60 mark for most of the
day, picking up slightly when the repo rate rose to 21,11%.
Commercial banks remained under pressure with the repo
rise forcing them "to play catch-up on margins" a dealer said.
At close of trade the financial index had lost 2,07%, 241
points, to 11 411.
The following excerpt, is from http://www.mg.co.za/mg/za/news.html#markets

"..The all share index ended the day substantially firmer after
gaining 97 points to 7 101 while the industrial index gained
1,14% to 8 251.
The bond market had a hair-raising day as foreigners bailed
out of South African government debt instruments in the
morning as the yield on the R150 rose to just under 17%
from Friday's close of 15,8%, before settling back at 16,6%
in the early afternoon. At 5.30pm the R150 was had gained a
further 15 basis points to trade at 6,4547%.
At 5.45pm the rand was trading at R6,4552 to the dollar.

"Watching paint dry".

Another exciting day in the gold market.

For the shoe, will surely fall!!!

Aragorn III: Yes -- I do agree with you -- got gold? Anyone who has tried to make money in the gold equity markets over the last two years knows how difficult that is. Physical gold may go down, but it does not plummet, and it is good in inflation and in deflation. After the deflationary episode ends, then gold equities will shine. The trick now is to hold on to what you have already.

but that gold leaf color sure is puuuuuuuuuuuuurdy...

See what a little currency collapse can do for your 'gold-pocketbook' !

http://quote.yahoo.com/q?s=asa&d=b

"currency collapse" was referring to So. Af. Rand...
most of closed end fund ASA, is in So. Af. mining issues.

For Robnoel ..
Article you reference talked about 70 farmers killed
in so far this year .. It also points out that in this
case killers were caught same day and Government is
instituting commando force to try to give better
protection. I could find nothing about a right wing
rebellion in your reference.. Maybe that's because
there isnt going to be one ..
Now lets get serious ROBNOEL .. are YOU saying that
there is going to be a right wing Afrikaaner revolt
in RSA .. ARE YOU ??? well when where how ?? are you
serious ?? Or are you dreaming ??
I would assign a chance of an afrikanner revolt
an even lower chance than of you being the next man
on the moon .. and that's pretty LOW.
So instead of just making mumbling threatening
noises .. lets SAY something Serious with a FEW
FACTS .. which you cannot come up with.

http://www.abcnews.com/sections/world/DailyNews/clintonrussia980706.html

Golden Chesshead; Plutonics 1,000,000 oz hedge which Homestake closed brought in only $5 million dollars.

I bet that Homestake wished that Plutonic acted on its own well before the merger. The weak A$ might bring problems for other Aussie producers with hedges dominated in the local currency.

I believe that most Canadian Miners denominate their hedges in US $.

In any event hedges backfire in very strange ways and the shareholders get the black smoke.

Thanks for your thoughts on tomorrow's EMU meeting . . . In anticipation of the BIS meeting in Tokyo this weekend? What implications do you foresee on the upcoming elections in Japan? Back to tomorrow -- I agree it behooves the EMU, today, to eschew statements that might stimulate a rise in POG. By the same token, do you think they might lean the other way -- that is, toward a statement that would stimulate a lower POG? And to what extent might that possibility already be discounted and reflected in the current price?

I guess I'm groping for a bottom here, thinking we're in it while at the same time not willing to be surprised by another test of 280s. What're your thoughts? Anyone?

re: Inflation/Deflation

I just looked at the XAU chart going back 7 years and it seems that a massive bottom head and shoulders formation has been formed with the neck line coming at 92. Any break above 92 will start the much touted gold bull market.

"America's banks, the weak US$ and ( the flagging ) growth of US money."

Silverfox: "The weak US$ is killing the US bank's lending capacity. This is the reason that despite give-away interest rates, the US money supply remains sluggish and the US remains in recession / depression."

"The dynamic works as follows: The FED adds to the monetary base by buying Euro-Bills"... ( or pick your own currency ) . "The increased US$ supply causes the US$ to decline against the Euro. As the Euro appreciates, the value of Euro loans on the balance sheets of US banks increases."

"US bank capital remains the same because the US banks have Euro liabilites that were incurred to make the Euro loans. However, the ratio of capital to outstanding loans declines falling below the 8%"... ( or whatever amount is ) ... "required by the FED. The banks must curtail or contract loans and consequently the US money supply remains stagnant despite massive stimulus from the FED."

------------------------------------------------------
Sounds kind of strange, but it could happen. If the current trend continues in the US as the Euro replaces the $ as the currency of reserve, then we might just read something like this.

Maybe the point to be made here is that the US$ ( while currently being the strongest currency out there ) will not retain its high and mighty position forever. And when it falls, a lot will also fall with it - in particular, the "value" of paper assets. And when that happens, then the entire mania bubble of the stock market will burst along with the slide of the US$. As this occurs, the strategy of "buying on the dips" will wipe you out. It will not be a nice scenario.

So, where does salvation come from ? --- It cometh in the form of AU.

army....for our American friends braaivlies is Afrikaans for barbecue.....do you get this site in SA ?

John B.
You goofed .. first step is local move to buy gold
stocks as dollar based instrument to offset losses
in holding rands.
Step 2 will be increase in dollar price because
dollar profitablity of SA mines increases due
rand slide .. think about it .. Mine revenue in $
stays the SAME .. mine costs in Dollars fall in
proportion to the fall in the rand .. 5/6.6 = .75
or a 25 % cost reduction as a first approximation.
This step will require some skill and imagination
which probably lacking in most USA based analysts.
( For a vivid example of the confused state of mine
and inability to comprehend these economics I refer
you to Golded Buckethead's last post .. He's desperate
to hype Lihir as hard as he can .. Rah Rah cis boom
bah. )
Therefore timing this latter step could be delayed
to after 3rd quarter profits are published and in the
market.. say October-December. I think you have
plenty time to buy ASA back.
The only possible fly in ointment is major fall in
gold price.

John B.
You goofed .. first step is local move to buy gold
stocks as dollar based instrument to offset losses
in holding rands.
Step 2 will be increase in dollar price because
dollar profitablity of SA mines increases due
rand slide .. think about it .. Mine revenue in $
stays the SAME .. mine costs in Dollars fall in
proportion to the fall in the rand .. 5/6.6 = .75
or a 25 % cost reduction as a first approximation.
This step will require some skill and imagination
which probably lacking in most USA based analysts.
( For a vivid example of the confused state of mine
and inability to comprehend these economics I refer
you to Golded Buckethead's last post .. He's desperate
to hype Lihir as hard as he can .. Rah Rah cis boom
bah. )
Therefore timing this latter step could be delayed
to after 3rd quarter profits are published and in the
market.. say October-December. I think you have
plenty time to buy ASA back.
The only possible fly in ointment is major fall in
gold price.

http://www.nando.net/newsroom/ntn/world/070698/world29_15000.html

for the URLs at 13:47 today. Now that I'm off work I'll look at them. I really appreciate your trying to help out the new kid on the block.

God Bless

http://www.foxmarketwire.com/wires/0706/f_rt_0706_29.sml

puppet gave up and insulted allies and he and his idiot cronies write a deal with their mouthes the US taxpayer's wallet can't afford in the fuel deal. What jerks. Americans are getting raped by this pissant and apparently not enough of them understand that yet.

got brains

What if the world banks decided to sell their T Bills and buy Euro debt instead? Or what if they just decided to sell all the US$$ cash they use for trade and use Euro money instead? OR if they decided to trade oil in Euros instead of dollars? Deflation or INflation? IMHO

Someone posted about oil for arms deal between
Libya and RSA. This has been denied by Government.
However, I hope such a deal is in the works .. The
US arms industry has used every trick in the book to
keep RSA produced arms from respectable markets ..
the RSA gear would include an excellent attack helicopter
and the G-5 field gun which is still probably the
world's best.
I find it odd that certain posters here express alarm
at sophisticated RSA arms exports but are SURE RSA
is unable to manufacture Mining equipment and has
to import all of it at high cost.

"Boletim do Banco Central do Brasil
International reserves
At the end of 1996, world international reserves totaled US$ 1.6 trillion, for growth of 14.6% in relation to the end of the previous year.

THE CALCULATIONS ARE BASED ON IMF CRITERIA, WITH GOLD ASSETS ASSESSED AT 35 SDR PER TROY OUNCE."
http://www.bcb.gov.br/ingles/banual96/hiie3105.htm



Japan International reserves
Contact person Special Account Section Chief
International Finance Bureau, Ministry of Finance ( MOF )
Phone: 81 3 35813692
Fax: 81 3 52512142


Total gross official foreign reserves of the central bank of the government in millions of U.S.dollars. The data include foreign exchange, gold, SDRs, and the reserve position with the Fund ( the reserve tranche" ) .

GOLD IS VALUED AT SDR 35 PER FINE TROY OUNCE AND CONVERTED INTO U.S. DOLLARS AT THE U.S. DOLLAR/SDR RATE SHOWN IN THE IMF PUBLICATION "INTERNATIONAL FINANCE STATISTICS".

Dissemination of ... that support statistical cross- checks and provide assurance of reasonableness Monthly data are published for the following components: monetary gold; SDR's; reserve position in the IMF; and foreign exchange.
http://dsbb.imf.org/country/jpn/ilrbase.htm

on Kitco...

When your currency is being attacked, hedges are wertlos!

Disney apparently hasn't read Donald's 6:55 post this morning. It clearly indicates that profits for SA miners will decline as mining costs ( imported equipment, etc. ) in dollars increase! Or if he has has read it, he fails ( refuses? ) to comprehend it!

This is the whore that destroys the people and the state which can not be tolerated in any nation that desires purity of thought, morality and process. It encourages sloth and therefore undermines the people and the state.


1925 Author Adolph Hitler Mein Kampf Landsberg prison


The democratic socialists are the enemy of the workers as they support the system of the bourgeosie and thwart a proletarian dictatorship. They preserve or save bourgeosie democracy..we should hate them more than any monarchist.


1933 Marshall Stalin Moscow USSR

The only advertising Hershey did until 1968 was a Hershey Bar wrapper on
the side of the road. When they got the litterbugs under control, we had to advertise: ) As far as size, I ought to know having seen millions of them over the years, but I believe they cycle between 1.45 oz and 1.95 oz. That is, instead of raising the price they will cut the size to what the value is and try and maintain the price as long as they can. This I noticed in the 70's/80's but may not be true now, never was official policy or anything, just common sense, trying to keep price increases to round nickel jumps. Used to be when there was a nickel jump you got a pretty big bar again, but since a nickel is a small percentage nowadays they may not even bother adjusting the weight. Maybe I can find out.
For weight back in the 50's I will try and find out. I can attest, however, they are made with the same quality ingredients and manufacture that they were nearly 100 years ago, as that is my livelihood. My father worked there in the 30's and many oldtimers that I know have told me how it was then and I know the last 20 years.
As for the Payday, my guess is when they bought that company, the marketing gurus found out the round shape made little difference and the square one was probably cheaper to make. I will tell them that you noticed!

Presidency...ta da ta da.....bill won't let his buddies down, and buying this oil, is what is going to be but a taste of the Executive Order's comming out to cover runnin willies mouth deals!!!

When comparing a lot of factors out there, your observation can be made a lot stronger.

1. Compare the performance of the DOW for the corresponding time. You will see a very clear divergence in the last couple of years where the two go in opposite directions. So, if there is a supporting bottom in the XAU with the market ready to take off, then the corresponding opposite is in store for the DOW.

2. Stock Market put in its high back on June 2nd. This is based on two critical factors. Both the DOW Industrials AND the DOW Transp moved lower simultaneously. This identified the beginning of the BEAR market for stocks. ( Now I know this is not being protrayed on CNBC or any other location where investment information for the masses is being disseminated. But the pattern will take hold and prove itself. The only problem is... by the time it becomes apparent to most, it will be too late. )

3. The merger and acuisition mania - bent upon making companies look better than they really are. This brings more investors in the market and gives them a "reason" to buy an overinflated asset. The logic goes..."if a large company is willing to pay more than book value for a company, then it must be worth a lot. The basis now is forward earnings". One need not look too far back to see how Quaker Oats bought Snapple and took a bath.

4. Analyst downward revisions of Earnings - The current game is to post earnings projections and then revise them downwards as needed to insure that they are below the "real" projected earnings when they are announced. This makes the company look better than it really is and motivates people buy on "strength" that is created by "better than analyst projections". Wow - what a scam.

--------------------------------------------

There are other factors too that make the arguement stronger yet. But right now, the ONLY game in town is the stock market. You must be a sick puppy for looking at the XAU.


SO... I agree that we should see a bottom to both the gold and XAU markets. But the competing markets that are out there ( and have a vested interest to see both gold and XAU to fall ) will do all they can to short both as long as they can. But these markets will spend themselves out. In the meantime, they create more and more inertia as they try to resist the proper direction for all markets. The question is how will the Market respond and when will it respond. Will it be similar to the currency trader flushout of Asian currency excesses? Will it be a sudden jolt? Will it be an avalanche of red ink? Will we see complete evaporation of paper assets?

Not exactly what the alchemists were going for, but a very satisfactory result nonetheless.

got milk chocolate?

Many here hope for governments to get honest and reinstitute the gold standard. The only possibility of such an total reversal in policy is as the desperate response to a total monetary meltdown. The American experience relative to a citizen's ownership of gold during a crisis has not been positive, such as during the confiscation of gold in the early 1930's. If by some odd fate gold once again becomes a monetary entity in the USA, here are ten things to tell the officers when they come to take your gold away.

All ten statements begin with, "I'd love to tell you where my gold is that I sweated blood to earn while you pissed away the nation's wealth in a hair-brained, debt-financed fiat money scam, but..."

1 ) "...I buried it somewhere in my twenty acre, heavily-wooded back yard along with about a thousand railroad spikes, and damn if I can't remember where!"

2 ) "...I zbent inon ackihol. Whah yer ere, can ya get me suh kinda gummit rehab pogram for my dringking probem?"

3 ) "...I sent it to relatives overseas and they spent it on alcohol. They aren't in rehab. The whole country drinks like that."

4 ) "...someone broke into my house and stole it."

5 ) "...I put it in an old fishing tackle box and my wife threw it out. Women!"

6 ) "...my son brought it to school for show and tell and forgot it. When he went back to look for it, it was gone. Love that kid but, sheeesh, what a dummy!"

7 ) "...I'm a moron. Pure and simple. I just can't recall where I put it. I'm like that. I can't remember where I put my ding-dong sometimes. Oh! There it is!" ( show them )

8 ) "...I gave it to a man for that huge magic totem pole out there on my front porch. You can't see it? You have to be a believer to see the magic totem pole, kind of like seeing value in paper dollars. I can see the magic totem pole. Can you?"

9 ) "...my dog ate it, ran away. I'll miss old Goldie."

10 ) "...then I'd have to kill you. Ha ha!"

-EJ

http://home.intekom.com/rsa/titos.html

get outta kid ya bother me...

For Robnoel ..
I dont need the site .. we get the
paper .. although I never read it ..
I hope you realize the paper you
quote from is the amalgamation of
ANC lackey anton harber's daily mail
and the left wing limey rag .. The
Guardian .. Cant you get the Daily
Worker site.. You are basically
spouting off Dopey Nelson's
propaganda about the third force ..
( sometimes called the third farce ) .
There really isnt any .. except
for the odd drunked up Afrikaaner
farmer in a bad mood.. of which there
are quite a few...

For the Golded Buckethead ..
YOU are wertlos ..

about OTHER WAYS and Executive action by the Gang,,,, in getting willies agenda done, without Congress, is it not?

Another all-time high in the ratio today: 3.950. This bubble we are in now has us 155% over 1929's absolute peak day ( 1.547 ) and 41% over 1968's peak day ( 2.802 ) .

From a different perspective, the ratio has gone up 2,938% from its 1980 low of 0.130.

Man, it is tough to be a goldbug these days. This is painful...

Fergie

http://www.foxnews.com/js_index.sml?content=/news/international/0706/i_rt_0706_53.sml

-other info as well. Has Siberia ever shown interest in secession?

JP, vaguely recalling a recent kitco-post of yours - of a few weeks ago,

in which you identified the Dow Transport's breaking down... below it's

200-day moving average, and your anticipation that the Dow/S&P would soon 'follow-suit'.... by July, I believe....

I am always interested to review/consider your latest charting interpretations...

truely/sincerely...sarcasm aside ... i value your point of view, and almost everyone's, here...

it's just that....i guess it is, somehow, reassuring....

that i am not the only one who can 'call it wrong'...in my technical/charting ideas/interpretations...

Perhaps one thing we can all be in unanimous, humble agreement upon:

the markets never lie...

....are always right...

...and...

....don't give a d_ _ _ ....

....what we ( even we kitcoites ) ... think, perceive, interpret, or ...

.... 'opinion-ate' ( =deliberate ) - about ......

As I see it, at this 2-cents-worth-moment.....:: )

I've not yet been able to identify your 'head-&-shoulders' bottom in the XAU, based on the last seven years of charted-prices.

Your '92' neck-line may indeed prove to be the next 'take-off' point, but where are the 3/ h.& sh. points... for the bottom formation...

in the XAU over the last 7 years ... that you allude to in your 16:55 post ..... considering XAU chart from 1991 til now ?

I do see a possible, long-term 3-point ( though not a h.-n.-sh. pattern ) bottom, of the XAU,

in this ... "" 60 - area "" ...

that the XAU has 'visited three times now:

first -- in 1986/87...

second -- in 1992/93..

and third -- in 1997/98.

Perhaps this is a clue of a deeply oversold/bottoming market for gold investments.

I'll keep looking for your h.& sh. XAU bottom of the last seven years, with the 92 neck-line you are projecting; thanks for the

ideas/interpretation.

Meanwhile, I am humbled once more, as I recognize...

( -hindsight can often be 20/20 ) ...

...the gold-bear-market // head-&-shoulder top ....

that the XAU mapped out, so dramatically & "clearly"...

from the 'left shoulder' of Jan. 1994 ...

to the 'head' of Jan. 1996 ...

to the failing/collapsing 'right shoulder' of Sept./Oct. 1997.

Peace & prosperity to us all,

David

goldfever@k-online.com

Date: Mon Jul 06 1998 16:55

JP ( Any comments ? . ) ID#253153:

I just looked at the XAU chart going back 7 years and it seems that a massive bottom head

and shoulders formation has been formed with the neck line coming at 92. Any break above

92 will start the much touted gold bull market.

Try 'The Derivatives Revolution' by Jessica Cross, part of the 'New Frontiers in Gold' series by:

Rosendale Press
10 Greycoat Place
London SW1P 1SB

Intelligent and non-patronising.

Happy reading

Bearly-A

For how many decades has the almighty US$ been the currency of reserve and the surrogate for gold? TOO MANY.

In fact, Japan is using US debt as a surrogate for gold BECAUSE IT BEARS INTEREST. But when you think about it, we have gotten ourselves into a perveted mess. To think that US debt has any value to it at all is preposterous. It's value is based upon the expected payback. What happens if the system collapses and the debt mechanisms become worthless? It will be gold that is the only game in town. Unfortunately, the current rules sidestep the basic principles. But the principles will be enforced again by the Market.

I expect that several CBs and banks will choose to "hedge" their bets and diversify from T-Bills and other US debt into Euros. Its a great diversification call and there will be a rough equivalence in strength as the combined value of the Europeans comes into competition with the US$.

Because the US$ is the only game in town, the US can afford to be abusive. But this game can quickly come to an end and I expect that it will. What happens when the demand for US debt drops off? What if the Japanese don't show up for one of the auctions? --- The price goes up in order to stimulate demand. And when it does, then the party is over ( if it isn't over before that ) . The US$ will not stay on its lofty perch for another 3 years.

NOW --- as far as inflation / deflation

We are currently in a massive inflation mode. This is being reflected in the stock market ( where so-called "30% gains" are really 30% [or maybe 20]% inflation ) . And as you can read in Texasgoldpost's assertion, he sees inflation at 11%. I think that the rate is at least that and probably more. This economy is addicted to money. The government is addicted to tax dollars. In fact, everyone is addicted to the current cycle. "It's tbe best economy"....[AG}..."has seen in 50 years". If that's the case, its time to grab onto your checks and kiss your sweet bippy goodbye.

We may see deflation, but I don't expect it until we see a downturn in the US$ or a significant drop in the stock market. ---- The bear has been let out of his cage. The dangerous part is that people aren't aware of it yet. ANd that is when the bear is most dangerous.


Did I hear a growl in the distance?

Robnoel ..
You read lotsa good stuff .. from the
daily worker to mein kampf in one easy
step.
you ever try any middle of the road
stuff .. too boring hey ??
I thought you were a Rhodesian .. have
you become a closet Afrikaaner?? .. I
particularly love their jokes .. they go
on forever and you never know when the
hell to laugh.
Now are you making a SERIOUS Forecast
of say 10 rands to the dollar PLUS a Boer
revolt .. ARE YOU ?? or are you just
screwing around with some kind of vague
misguided attempt at harassment??

Try 'The Derivatives Revolution' by Jessica Cross, part of the 'New Frontiers in Gold' series by:

Rosendale Press
10 Greycoat Place
London SW1P 1SB

Intelligent and non-patronising.

Happy reading

Bearly-A

Rand granted if you snoop around that site it is the radical Afrikaaner movement,with a close neo-nazi bent,which I do not agree with,however I know the boers a lot better than you do,and it will come to a bloody conclusion either way,the socialist controled UN will never the less send in THE BLUE HELMUTS to restore law and order.

Golden Cheesehead: Somebody posted here yesterday that they were planning to short Amazon at 125. I warned him not to do it, because these crazy blowoffs can go higher thsn anyone expects. If Amazon --alreadyY grossly overvalued at 70 -- could go to 125 in a few weeks, why not 200 or 300 before the bubble bursts. Hope the poster heeded my advice or at least used a tight stop.

Go Russkie workers frustrate Clinton tell the IMF to ..OFF . You have to laugh an announcement he will visit in September. The Russian strikers and GM STRIKERS ARE THE TRUE HERO AND HEROINES. GOD BLESS EM.

Colleague at work has a relation whose brother is the newly appointed ambassador. Apparently relations have been retained over the last few months but only recently announced.

.

ROR, so what is your point, Hitler and Stalin are YOUR heroes?

Read 17:23 post comments,thanks. We really are preservers of freedom!

In the past several years there have been a couple of other tricks used to manage 'sticker shock' as prices per candy bar ounces increase while candy bar sizes decrease.

First there is the "King Size". Typically cheaper by the ounce than the current normal size, but those who used to be satisfied with the pre-shrunk bar may now need the king size to be happy.

The second trick I see a lot in grocery stores is the 3/$1 deal. I have have absolutley no idea how this relates to previous prices and sizes, but my gut feeling is that it somehow tricks me into paying more for less.

Yet another trick is to add Air to the candy bar. Reeses has a new peanut butter cup that has a crunchy cookie at the bottom. I think this increases the volume of candy being eaten while reducing the actual stuff. I suspect the Bars that have Rice Crispies as an ingriedient have a higher ratio of rice crispy to chocolate than before. Perhaps not, I have never bothered to count them.

I would love to see a 20 year 'Hershy bar oz.'/$ chart. Any other household item like toilet paper or bread would be just as interesting.

We are witnessing history in the making. I know that Bob Prechter has
been wrong for many years in calling the top in the markets. But I am
even more convinced than ever that his basic premise of this being the
5th of the 5th wave up is true. And in the 5th of the 5th wave one would
expect that all previous records would be broken. And we are there now.
NOBODY knows how high is high. But I know that I don't want to be in the
way of the stockmarket when it goes down. But because I believed too
early my gold stocks suffered what I tried to avoid in the regular
markets!!! The irony!!! The nerve!!!

Having been here once before, many years ago there is nothing to do but
buy more and wait.

John Disney: If the declining Rand is good for the golds why are
Drooy and Rangy not moving-even a little?

Martin Weiss says that in the late 20's Britain was melting down for a
long time before the US got hammered. And that was when the Brits
started selling their US assets. He says that Japan will start selling
before the end of the year. Probably after Rubin and his friends at
Goldman Sachs get positioned. All this takes time.

Thanks, GD

AN INTEREST-RATE HIKE NOW WOULD BE TOO LITTLE, TOO LATE
By JOHN CRUDELE
THE Federal Reserve screwed up.
Famous Wall Street economist Henry Kaufman, himself a former Fed employee, isn't quite that indelicate with his comments. But that's what he means.
Alan Greenspan's Fed, which left interest rates alone again last week, missed its best chance long ago to boost borrowing costs and head off the irrational exuberance that is now occurring in the stock market and the economy, Kaufman says.
"The Fed, if it acts now, is acting too late. It missed its timing," he argues, saying that Greenspan is fully aware of his views. "You can't just say, "We didn't do it a year ago, so now we are going to do more of it.'"
"Now, if the Fed interdicts to limit the financial bubbling, it would not have a quantifiable effect," Kaufman adds. Translation: Higher rates are no longer the tonic that will soothe Wall Street's mania.
But a rate increase, if handled in the wrong way, might cause the stock market to collapse. "If the Fed moved by 25 basis points because of the excess in the equity market - if that was stated clearly - that might have a significant negative effect on the equity market."
I asked to interview Kaufman because he's one of the few people associated with Wall Street and still respected in the investment community who is willing to caution small investors about the risks of playing the stock market at current levels.
His view? He thinks there will be hell to pay.
The former chief economist for Salomon Brothers, now president of Henry Kaufman & Co. on Madison Ave., has a notion of what will prick the bubble - a spreading of the Asian problem, a profit squeeze among American corporations and, less likely, economic recoveries in both Japan and Europe that divert capital from the U.S.
Since 99.9 percent of everyone else on Wall Street with an opinion believes that economic cyclicality has been repealed and the stock market will go up forever, Kaufman's sobering voice is a necessary one.
What's the timing of the global recession and the American stock market's trouble? "It puts you out within the parameters of the next year or two," Kaufman says, with the emphasis on sooner in that timeframe than later.
What will the stock market's collapse look like? Kaufman thinks the first round of selling will come from leveraged institutional accounts, like banks, insurance companies and hedge funds that have been borrowing heavily to make investments.
The behavior of average investors in a big market downturn is the harder thing to predict. Kaufman thinks younger people will stand firm at first, figuring they have many years before they'll need the retirement money they have invested in the stock market.
"But when you get into some of the middle-aged and older people, they can't take the risk of seeing the market downturn through."
Kaufman agrees that stocks have been providing much of the so-called "wealth effect" that has been driving the nation's economy higher. And he is critical of the Fed for not realizing sooner that record equity prices were causing people to feel wealthy enough to drive up everything from the price of real estate to clothing in the windows of Saks and bagels at the corner deli.
The Fed's basic problem, Kaufman believes, is that there isn't much of a constituency lobbying for higher interest rates.
So it's safest for Greenspan to stand pat - which, unfortunately, is exactly what he has done.
Kaufman thinks the warning signs of a downturn are already here. High price-to-earnings ratios on stocks and the huge shift of household assets into equities, to name two, are particularly unsettling.
And Henry Kaufman, now 70 years old, thinks Wall Street's youth is making mistakes that could cost investors dearly. "They are being put into a position where they can make huge amounts of money without capital risk," Kaufman says of the young hotshots now leading the investment community.
Hell, when Kaufman was urging caution just before the October 1987 crash, most of today's top Wall Street players were still more worried about the World Series than the world.

Thanks, I needed that perspective, and badly. Couldn't see the forest for the trees, type of thing, you know.

Appreciate it, Fergie

@Golden Cheesehead: re. internet stocks - insane, is it not? No doubt the Internet wipes away all past information paradigms ( TV, movies, mail-order catalog, postal flyers, et cetera ) , but the mindless chasing of them indiates just how horrifically the market is teetering on the abyss.

@Roebear - thanks for chasing the Hersey bar mass over time; I acutally called the 1-800 number on the bar & soke with a rep.; she claimed the bar mass had not changed since 1963 [sic].

The problem is, as Winston Smith of "1984" makes clear - with no memory of what has happened in the past, the consumer is clueless as to the nature of the inflation perversion/scam being pulled off now.

The Press, being "owned" by those who control things, will likely never trot out the facts and call the FedGov on the falsehood of the CPI & PPI numbers ... or else, President Clinton will stand up and declaim ( ahem ) "there *IS* no inflation".

what a world indeed.

it is a thankless job, but we must each one of us RESIST the fetid tide of FedGov/Hollywood prole-feed. Spread the informational virus of skepticism, doubt and independant thought: those who would be our masters fear nothing greater!

Spud, 1776 NOW!

You no good @s_____. Buying RSA shares before HGMCY was down to $3.25. Sure, I know the excuse, Rand weakness! Just because the underlying market situation changed is no reason to change your plan. : )

Seriously, the only problem I see is when the US$ weakens. What happens when gold is quoted in Euro's and US$'s and the dollar price is much higher? Where does the Rand go or is that the question of the future?

Brother oris...hope you are well and gold jumps before end of summer. Yes, I moved some money back into mining shares.

Tom

Hang-in there, fergie; it's always darkest before the dawn.
Barron's had a good article/chart "Agenda Bender"...
a few weeks ago ( 6/22/98 issue ) ,
in which Alan Abelson interviewed John Hussman --
Univ. of Michigan & Hussman Econometrics....

The point is, Hussman's insightful research, as published in Barron's
article ( and Hussman's chart ) ...
illustrated how in each S&P/Dow peak, or top,
of the last maybe 100+ years ....
that the Price-Earnings ratio, also peaked at about 20-21, at each market top........that is.... until now......

BUT THIS TIME... the p-e ratio/to the S&P is at the
extreme level of 28-29 level !!!!

This parallels your extreme readings/values....for the
S&P/gold ratio....or Dow/gold ratio....etc.

So, take heart.
We may be the minority,
but we are committed, intelligent, resourceful & resilient...
and perhaps...a little whacky & eccentric....at times
...
but we are ....nevertheless and even-so...
...the next millennium's ...
...." daughters & sons of liberty "...

( ( imho ) )
P.S. one caveat: it's all 'relative', my dear investor.

28/29 P-E extemes, could go even more extreme...30...31...33..38-9...???

There's nothing like the engineer's hyperbolic curve...
accelerating to 'infinity'....
..
to end this
seemingly endless
dream

With all the capital from Asia finding refuge in US, we don't need an interest rate hike. Plenty of $$$ to go around. International confidence in the USA is high. Who knows when it will be shaken. A stock market "adjustment", an oil shock, or a weakened dollar, maybe? It's anybody's guess. This economy could very well carry into next year, but it won't go on forever.

My point is tyranny always hates democratic socialism because it includes economic and social values which destroy the ability of any tyrant to popularly takeover society. As the economic elite you would understand this.

http://www.pub.whitehouse.gov/urires/I2R?urn:pdi://oma.eop.gov.us/1998/5/18/4.text.1

OK guys; so now what:
maybe we should insist on dollar-convertibility to hershey-bars...
surely the end of the gold bear, is at hand...

( dear, hand me another chocolate... )

http://www.worldnetdaily.com/exclusiv/980706.ex.clinton.govern.b.html

Another indication of the weakening housing and manufacturing markets where copper is used heavily. Although the demand for copper may be good, there is an over supply of the metal . Despite all the predictions of copper shortages, the copper price is declining on a weekly basis.

"TULIP"

gold dancer

1. There is NO "IF"
2. Drooy has moved from 13 to 15 rands
3. Half of rangy's costs are NOT
in RSA .. their new mines are in
Mali.. but they moved anyway ..
their low was 3.5 .. they closed
5.5.
You want everything straight up ??
Index was up 7 % .. not good
enough ??
God punishes you if you get too
greedy.

( i hope it's ok w/ you, GD? )
Martin Weiss says that in the late 20's Britain was melting down for a
long time before the US got hammered. And that was when the Brits
started selling their US assets. He says that Japan will start selling
before the end of the year. Probably after Rubin and his friends at
Goldman Sachs get positioned. All this takes time.

Thanks, GD

Well put.

Old Scottish principals state.......

" never get into debt, and certainly never buy debt"

In simplistic terms, think of buying the Aussie Dollar debt a year ago relative to the US$ - you would now be in a further additional 30% debt.

You suggest that the US market reflects 20 to 30 % inflation, is this realistic?

It's a strange old world out there - the Aussie gold price is back to where is was before "all" this happened a year ago, and yet non-mining industry persons are STILL locked into US$ gold price. It's a strange old world.

I used to think that stock markets were there as a foundation of capital for industry - it's not. it's there as a foundation for the rip off artists, who have no perception beyond the next scam, and takings for themselves.

No matter how you look at "it", this really is impressive:

http://www.brillig.com/debt_clock/

I have heard about buying on the "never never", but this is ridiculous !

read you right...you think I am part of the economic elite? I still disagree with your theories and philosophies, but...you must admit that the constitution has been butchered.

Travelling
Upward
Like
Internet
Projectiles

...coming back down like nobody's business. Soon.

Date: Thu Jul 02 1998 20:31
goldfevr ( words of wisdom from another gov't expert - revealing how we've sacrificed our
liberty, for lunacy. ) ID#434108:
from Congressman Henry S. Reuss, U.S. House of Representatives,
long-term chairman of House Banking & Currency Committee ( 1960's ) :

"With Gold no longer playing a major role in
the international monetary system,
its price will sink
to its value in the arts ...
something much closer to $6.00 an ounce,
rather than the current $35.00/oz."

the more things change, the more they remain the same )

was working, and I went back to it and they said it was expired???

Paper US$'s are very valuable at the present time. Use them wisely and hedge your bets by buying hard assets just in case paper US$'s start to go down in value. Think that can't happen? Look back all of 3-5 years. Want more education, look back 30 years.

Tops go to bottoms and bottoms go to tops. Tis a matter of timing. Yes?

cherokee...the beans in Nebraska and Iowa, if not under water, are looking kind of like old yeller!
Corn is next.

Tom

Severe Drought in the South and SouthEastern US. Texas Cotton and Corn crop is in danger of being lost.

Forest fires cause insuranse claims to rise, replacement construction will require labor and materials increased demand.

Side notes,
"Mutual Funds have very low if any cash reserves. Many fund managers have never experienced a down market."

"China may have to devalue in the 4th Qtr..."

HighRise

and MM link was/is twice............but it is gone NOW G....... it is gone, tell MM to give it BACK!! lol

The part about Rubin and his friends was MY added comment.

I always assume that the "big boys" don't get caught flatfooted.
I am also assuming that Clinton's trip to China, especially the length
of it, was merely a delaying tactic. China will devalue because they
have to. Again more time to get positioned.

Thanks, GD

A CRB decline below 200 on the chart will confirm that we are in a runaway deflationary environment. Since no one believes deflation is possible in the US , pay attention to what the markets are saying. The markets are the ultimate decision makers and will make all the decisions for the new economic managers in Washington , D.C.

THE WHITE HOUSE
Office of the Press Secretary
( Birmingham, England )
________________________________________________________________________
For Immediate Release May 14, 1998
EXECUTIVE ORDER
- - - - - - - FEDERALISM
By the authority vested in me as President by the Constitution and
the laws of the United States of America, and in order to guarantee the
division of governmental responsibilities, embodied in the Constitution,
between the Federal Government and the States that was intended by the
Framers and application of those principles by the Executive departments
and agencies in the formulation and implementation of policies, it is
hereby ordered as follows:

http://www.gold.globalcenter.net/legislation.html

that we are going to see some Executive Orders....soon.. and I think
that alot of them are going to have to do with China, either directly or indirectly...

The earning sand-bagging gimmick is an old one. We used to use it when I was Nat. Sales Mgr of a publically-traded software co. But if I were using the same forecasting methods today that I used a year ago, my forecasts would be totally off and I wouldn't know it until the sales were tallied. Things are changing too quickly.

The whole reason I'm here is that after playing the stock market and watching gold out of the corner of my eye since 1983, I noticed that gold seemed to be stuck at close to an 18 year low and the stock market was full of morons pumping their retirement money in. Time for EJ to get out of the stock market and into PMs. I recall showing my wife, always the pragmatic mind, a chart of gold and the DOW for the past 20 years. She took one look and said, "The gold is too cheap. Stocks are too expensive. We ought to buy some gold"

That about sums it up.

As far as the bear starting June 2, anyone paying attention to the internal of the market can see that. But I just had my haircut and my 50-something year-old barber told me he had his retirement money in the stock market. "It'll go down, them it'll go up again." The money you have in the market is really important to you. It is your retirement money. You're too old to earn it again. What would you do if the market turned down by 30% over the next month?" He stopped cutting my hair for a second as if pondering some impossible thing and said, "I dunno."

I'll tell you what I'd do if I were 58 with all my reitrement money in the stock market and it started to crash. I'd sell. I'd get out whatever I had left and I bet most folks will, in a panic.

The question is, how much time will elapse between the realization that the bear is in, to the realization by the average investor that "this means me."

-EJ

The Charters Tower area is, indeed, a significant historical gold producer. It produced in excess of 6 million ounces pre-1912.

Charters Towers Gold Mines NL tried but failed to kick start a new gold mining operation and defualted on a AU$ 25 million loan, cumulating total debts of AU$ 35 million.

It will be VERY interesting to see what mineable reserves Mr Armstrong & PEI come up with. There are presently no reserves, only a few hundred thousand tonnes of inferred resources. Stope fill does not constitute reserves !!!

No return on capital thru production for 2 years minimum, more likely three years. The Snowdon & Associates report was very interesting.

Aussie companies tended to stay away from this project - there are more interesting fish in the sea !

Then again, you have got to be in it to win it ?!

Och aye the noooooooooooooooo.........................

That's an excellent site.

Got any idea how many hits you're getting, and from where?

http://www.tscn.com/wsc/Full_Stories.html?Button=Get+Story&headline=3791083

And I'm happy for them, really... they deserve it, hard work & all...

IMF's 'gold standard': one troy ounce of gold equals 35 SDR, which is something around 1.12 SDR a gram, yes?
http://www.bcb.gov.br/ingles/banual96/hiie3105.htm

Bank for International Settlements 'gold standard' values one troy ounce at 208 USD, which is something around 6.6687USD a gram, yes?

Central banks price gold in a multitude of ways

"Turkey International reserves
Gold is valued in millions of fine Troy ounces at USD300. The last revaluation of the gold was made on February 13, 1988, and there is no strictly determined frequency for the revaluation of the gold holdings".
http://dsbb.imf.org/country/tur/ilrbase.htm

"Banco de Mexico in the Fund. The gold is valued daily according to the average price of gold in the London market."
http://dsbb.imf.org/country/mex/ilrbase.htm

Japan International reserves
Gold is valued at SDR 35 per fine troy ounce and converted into U.S. dollars at the U.S. dollar/SDR rate shown in the IMF publication "International Finance Statistics".
http://dsbb.imf.org/country/jpn/ilrbase.htm


XFO GOLD-FRANC ( SPECIAL SETTLEMENT CURRENCY )
http://www.nyconsultant.fr/editexeurope/annex-b.html

So, gold has been demonetized. {:- ) ) ) ) )

excellent weather & soil-moisture maps, from

Weather-Mail@FBMInet.ca

but so much, and we are only half way thru his second Term?!??!
AAAAARRRRRRRRRRrrrrrgggggggggggggg

I just got some complimentary checks from the Rockefellers today - Chase Bank. I called to get the details, they are:

3% fee on amount of check, therefore a $10K chk will cost $300.

No grace period - daily interest charge APR of 20.05%

In one year $10K would be a $12,5K.

It's a Gold account ..... for Chase.

HighRise

Dow/Gold Ratio = 31.01. This is not a new high but it does tie the previous high set on June 5th. The 50 day moving average is 30.23

My assessment is simplistic. The mantra for gains in the stock market is an average of 10%. With the current gains of 30-40%, I am subtracting the difference and VIOLA -- we have 20-30%.

The crazy part is how money gains access into the economy in the first place. JP said it well in his 12:09 post. The FED is accomodating to the demand for money from the populace and business. They issues it ( in electronic form ) to meet all of the demand that is out there. THEN they look at the other end of activity to determine WHETHER there is inflation - not where the inflation is occuring. The key to understand is the motivation. Both the FED and the US Govt want as much money out there as possible. Both are the beneficiaries from more money being issued. The FED makes more for producing more. And the US Govt makes more in the form of taxes.

Now the catch... How to mask the materialization of inflation. The Klinton adminstration has turned this into an artform. They are cooking the books ( so to say ) . Rather than saying a "starting" car is the baseline when comparing 1990 to 1998. They take a car in 1990 and subtract the "standard options" offered in the starting car of 1998. This is a clear slight of hand game. The bottom line is that a "starting" car offered by the Automotive industry is still a starting car. And if the cost has increased by 75% from 1990 to 1998, then inflation has increased that much. I don't want to hear any of this mumbo-jumbo about "fair" comparisons. ( The next thing you'll hear is that there's no inflation out there because there's no demand for buggy-whips. ----- The point being that there are shifts in the economy and you need to take comparitive bases such as a starting car, a starting house, a starting computer, etc. and NOT discount the current model because it isn't the same as an IBM XT of the 1980's. )

SO---- We have massive inflation in the stock market and anywhere else that babyboomers are buying right now. But the key to keep in mind, it wouldn't be possible if credit wasn't so easy and the FED wasn't so quick to oblige the demand for funny money.

SpudMaster has a good take on inflation at around 11% in his 15:44 post.

Another great stock symbol added to our lexicon thanks to goldferv. ;- )

Some time ago, I purchased 500 shares of AngloGold ( AGOLY ) . I understand that there is some kind of merger going on with the company. The symbol however, is no longer pulling up a quote. How would I be able to get a current quote on this company? Is there a new symbol?? My clueless broker has no idea what's going on with AngloGold and I'm just about fed up with her.

I also noticed the past few days that the Johannesburg Gold index has gone up signifigantly. Last week I recall seeing it at about 850 and today I saw it was over 1150. I understand that there are some problems with S. Africa's currency but would that cause a 35% gain in an index in a weeks time???

If anyone has any info for me, I would greatly appreciate it.

Thanks Much!

the Coward Erect's world. It certainly has nothing to do with America in the least. In fact it clearly shows that the government does not represent the American people...

Excellent, gulp to ya!

Granted that this particular strike is not "primarily" concerned about wage issues BUT "wage and benefit increases on the order of 11.5% over five years on a $60,000 salary base" does not endear me to their plight. SCREW THE GM WORKERS! They are making six times what I am and they have a comfy suite of benefits to boot! These auto workers have always made several times what people like me made. Back when my dad was making $100 per week ( 1960s ) and driving a used car these greedy b*st*rds were demanding over $10 and hour and beaucoup benefits on top of that!
I still can not afford one of their new cars which may cost only one third of their "salary base" but which cost TWO years of MY "salary base".
Their "plight" gets no sympathy from me. Nosiree Bob!

Gold Exploration in Saudi Arabia
By Kenneth Sargent

Following a successful cooperative exploration program with the Saudi Arabian Directorate General of Mineral Resources ( DGMR ) , USGS studies at the Hamdah gold prospect in the southwestern part of Saudi Arabia phased out at the end of 1992 with the completion of a series of evaluation reports. Cooperative agreements with the Saudi Arabian government date to 1963 and include extensive regional geologic mapping and mineral exploration.

The Hamdah gold project included a heap-leach test, executed over 17 weeks, to dissolve the gold from the rock in which it is found.The test culminated in a ceremonial gold pour on July 21, 1991, at which the gold was poured into ingots. Officials of the Saudi Arabian government and of DGMR joined USGS scientists at the ceremony to mark the project\'s completion. The pour yielded 19.2 kilograms ( more than 42 pounds ) of gold of 91 percent average purity. The deposit contains 1.1 million short tons ( 1 million metric tons ) of overburden at an average grade of 0.1 troy ounce of gold per short ton ( 2.8 grams per metric ton ) and 89,000 short tons ( 81,000 metric tons ) of bedrock containing significant amounts of gold.

The Hamdah deposit was originally worked more than 800 years ago and was reinvestigated starting in 1989. More than 10,000 collected samples, almost 4,000 meters ( more than 13,000 feet ) of recent core drilling, and 6,000 meters ( almost 20,000 feet ) of trenching confirmed the presence of an economically significant amount of gold ore. The deposit is central to other smaller deposits that can be mined because of their proximity to the larger Hamdah deposit.

XAU/Spot Ratio = .236. The 50 day moving average is .259. My database contains 28 occasions where the XAU closed in the 69.XX range. Ranked according to the gold price, today is # 22. The #1 ranking was on 4-24-86 with a gold price of $345.10, an XAU of 69.70, producing an XAU/AU ratio of .202

Thanks for your input, I had my arithmetic confused and appreciate both your analysis. Must be getting old - but not stubborn, as I will reverse the trade.

I have a weakness for 'flowers'.
I wonder who is writing the naked/un-covered puts,
on the internet stocks. ....?!
If we had THAT answer,
we'd know tomorrow's headlines.

Gold/Silver Ratio = 55.11. The 50 day moving average is 54.18

I expect the PPI to be in a negative territory ( -0.6% ) which will provide the long US bond with another reason to rally and the yield to drop to 5.5%.

THE WHITE HOUSE, Office of the Press Secretary ( Birmingham,England ) O'tay
now explain what this is doing on a United States gag, Presidential document? While I remain calm...NOT!!!!!!!!!!!!!!!!!!!!!!!!!

First of all I would keep that wife of yours. In fact buy more!!!!

As far as your barber goes I think I know when he and others will get
out of the stock market: AT THE BOTTOM.

Look at the chart of DROOY and the volume patterns. From about $9 to
$2 very little volume, then big volume at the bottom as investors
throw in the towel in fear and disgust.

It took me a long time to realize that that's how markets work. They
keep you hoping all the way down. Then you get pissed at the bottom!

Thanks GD

It's changed to ANGLY and pulls up a quote that way.
Anglogold was up 12% today.

http://www.dbc.com/cgi-bin/htx.exe/dbcfiles/SOAFRAt.html?source=core/dbc

Spot gold $297.09; spot silver $5.49; XAU 77.17

"puts" should read "calls"... if anybody noticed....

Yes, markets are deflating, and it will be interesting to see how the drought and re-construction demand will play into the equation.

I had a carpenter give me a hand full of cards today, he said work is slowing ... I don't know if he was just saying that or if it rerally is. He is moving to a big home next, I would think he would have a lot of work lined up by the time he is done with that project.

The fact still remains that this was the first time, in a couple of years , that any carpenter, and this was a good carpenter, has ask me for work.

Very interestting I think with low interest rates and such.

Is there a similarity here to the dust bowl and shortage of crops but still had deflation?

I have started to tract copper and some copper stocks for the direction you are suggesting.

HighRise

I should have said that "ceteris paribus", I will reverse the trade. Thanks again!

The Pres was travelling when he issued the order, very quiet like . . .

on little cat's paws. Someone over here picked up on it and started yelling over the internet. Such a fuss as I haven't seen since Hillary's magic ( cause they were impossible under the rules ) futures trades came to light.

ANGLY's sterling performance today,
assures me that my recent kitco-posts,
regarding this stock,
were pertinent and germane.

an i ain' say nuttin, i didn' do nuttin', i don' even suspect nuttin' now leave me alone,,, i tell ya, damnit i BITE'

sic'em .........go on Tolly, go home....or u are gonna get BIT!! LOL

got me thinking ( a bad habit you have ) . The first such system I've found like that was in the 1200's - during the first great inflation of this millenium.

The great Merchant Princes demanded that all payments to them be made in the only gold currency of the time, which was not ever debased, but paid all their undelings in silver, which was debased by being shaved, holes punched into it, etc.

This time they're just being more sneaky about it, eh?

I know, I know...

...heavy machinery doesn't cost 100% of the gold a mine mines,
but I have no idea: Does RSA have a heavy equipment industry
and or manufacture mining equipment?

Thanks for the info. I'm still a little confused though. I purchased 500 shares of AGOLY at 4 1/4 a couple weeks back. Now only 100 shares appear in my account due to a 1 for 5 reverse stock split which means my buy price goes to 21 1/4 for the 100 shares I now have. How can the price of ANGLY be so high now ( it hit over $40 today ) when gold has done nothing but go down in price since I bought the shares??? I noticed that there are several different issues of AngloGold on Yahoo when I did a search in the finance section. Are you certain that ANGLY is the correct symbol?? I sure hope it is, but reality tells me that nearly doubling my money in a gold stock in 2 weeks on a down market is too good to be true.

What is going on in South Africa that would cause such a huge runup in the Johannesburg Gold Index?? ( 850 to 1150 in one week ) ?

Thanks to 2BR02B AND anyone else who helps me out here!

Don't bite Tolly!

Namast, both of you.

Maybe this will help. I'm not a direct shareholder of
this company, only exposure is through funds.

http://www.anglogold.co.za/21st%20Century%20Company.htm

must come down
( Mr. Dent, notwithstanding )
http://www.sni.net/hans/stocks.html

The answer is that the Rand has dropped more than 30% against the
dollar since the start of the year. The S.A. mines sell their gold
for dollars and pay their costs in Rand so when the dollar rises against
the Rand, the mines' production cost in dollars drops while their
revenues in dollars remain the same thus causing a big increase in profits.

so I did' have too, he started IT!!

I don't know whether we will experience crop shortages or conditions similiar to the dust bowl of the 30's. Every deflation is different in its severity and duration. In my heart I know that this deflation will be VERY severe perhaps more severe than the one in the 30's.

wordsmith par excellence.

A Gulp at ya!

Excuse me what do those lazy GM execs earn HELLO..who is really greedy.

JP: With globalized economies and financial markets, bond yields tell us much less about the strength of the DOMESTIC economy than they did in years past. Yields have collapsed because of Asian problems and a huge flow of capital to the US. But the domestic economy remains quite strong. If bond yields reflected the domestic economy only, they probably would be closer to 7% than 5.5%

gag, Presidential order? This really hacks me off. Where are our resident Constitutional experts? I am really curious about this.

OLD GOLD, you make a great point about the degree of foreign investment in US debt.

JP, how, in light of OLD GOLD's point, does the current long bond market portend deflation?

Many thanks for your comments today.

-EJ

The So. Af. rand is "under siege"...
that means
the So. Af. currency is dropping in value, relative to any thing more 'real' than it happens to be,
at least for the time being...

thus, So. Af. stocks, like ANGLY, AAGIY, ASA, etc.,
get an extra, immediate, rare but revealing....
boost.... - a shot in the arm/a shot of adrenalin...
so to speak...
while their costs are defined in cheapening/depreciating rands...
meanwhile....
they ( can still ) sell their goods - like GOLD ....

in more valuable ( -still holding their own ) currencies,
such as the U.S. dollar.

Thus, these So. African mining issues hold a 'double-whammy'
...
of "promise" ...
#1. appreciation-potential based on currency turmoil/discrepancies
#2. appreciation-potential based on the humble fact that they are mining gold, the world's only real money, and economic salvation.

IF.... if civil war does not erupt in So. Af.,
I'd guess that these shares will continue to appreciate,
from here on out...'for the duration'... so to speak.

However, I'd also suggest seeking the perspective of those
one or two among we kitcoites...
who have more perspective & clarity on that possibility...
based on their proximity... there-to...
rather than rely only on a listen/read....
of the meandering opinions...
of our kitcoite majority...
rather than on some of us...

Where the fat is on the fire....
is where the heat holds the light
of truth

in So. Africa
as everywhere

and if he gives an Order from the Outhouse, it really is from the court,
you see, even he is standing on his HEAD in the outhouse, your gonna go
to jail you jus wait an see!!! I suppose, that when the president is in the outhouse, everything that comes out of there, is going be from the Whitehouse you see!!!

You said it, we are in a globalized economy interdependent on all economies. Yes, in the past 12 months the US economy has been strong
and attracted huge flow of capital from other countries because of high interest rates and low inflation. But now, the US economy is slowing down, commodities are declining, interest rates are declining and the unemployment is rising. At some point in the future, money will exit the US
seeking safety and higher returns elsewhere. Money is moving to the long bond for income,safety and capital appreciation. The strength of the
US dollar does not indicate strength in the US economy. In my opinion it indicates an economy on the verge of collapse, a deflationay collapse. That is one of the reasons why I'm so bullish on gold as an edge against
deflation.

What do Gold miners make? I know many who are making HALF what the GM workers are making. And for a heluva lot riskier work! And they drive used pickups! Those highly paid GM execs can do the folks in some third-world country a favor and help them raise their standard of living. Close the stateside assembly plants and move them to Mexico! Or better yet, move them to smalltown in middle America where folks would be plumb tickled to make HALF what those greedy city slickers are making. Spread the wealth around to towns in American who have been in a depression for fifteen years - regardless of the lying statiticians in Washington.

As you have stated, I also would like to accept your take, on how positive change will be achieved, in our democratic nation's. I would like to believe " that Government ( corporation's ) and the media ( corporation ) are already suffering greatly"

Unfortunately, when a person considers that the Great Depression in Canada lasted 10 years, and all the great minds, could not resolve the economic madness that existed, nor did the people, as a majority, get to the level of understanding ( cause/effect/affect ) , to appreciate the 1930's depth of the economic madness. Even to this day, few citizen's know why.

No, the facts exist, that a World War was the answer to Jobs, Jobs, Jobs, yes, these jobs were a result of mass killings of fellow humans, and fellow citizen's.

At the wars end, again, additional unemployment was the order of the day. Corporation's profit and loss, when not in a war economy, demand unreasonable levels of unemployment.

You suggest that the internet could be a way to assist each of us, a window, of better understanding, of fellow human's, yes, I agree, and yes, as you, I am hopeful that this will be the case. Yet, we can understand that the vast majority of citizen's do not like to read, as a result, the internet is being set back by the reality of many who do not like, or want to read. Like those citizen's of the 20' and 30's that could not read or write, only this time, citizens' choice is not to read.

On a positive note, many good citizen's are those that will accept such impossible odds, and actively, and with clear understanding, that their individual actions will cost them and their family, economic security, yet, they will get involved, the result will be positive and constructive change. No, those that accept the challenge, will not be supported, by the silent majority.

As with the issue of gold, if more citizen's read, the silent majority would have demanded of "their" so called elected representative's, a more balanced economic standard. Now, we are faced with the possible total melt down, and destruction of our living standards. Silent Majority rule eh! Like, Be Quiet...Consume...And Die
Thanks, Namaste' Take Care.

watch more of my gold leaf paint dry for a while...bbl

hundreds of times what their average worker makes. But keep in mind that they are not paid in cash as are workers. They are paid in equity, and if they succeed on their compensation plan and make the revenue and earnings goals in their contracts, then they make millions... in equity. The risk profile of a worker is different.

What's hard to understand is what is in the chairman's head and heart that make's his unique risk play so special. There are a lot of roads to his position, to gain the expertise and knowledge and character required, and it is usually a lifetime of priviledge, in my experience. But without privilege these men would not exist at all to run these businesses. Such a paradox is capitalism.

But the chairman is not lazy. All the corp. managers I've known work 100 hours a week. They work all weekend. There is no rest. I have been at BOD meetings on many Sunday nights because that's the only time left to meet.

You can argue that they are greedy but not that they are lazy.

-EJ

Don't we have enough to be mad at the first felon for already?

see message to Dave...

Agricultural lampoon report: well it looks like corn crops are mixed. The fellow I've mentioned before who has the USDA underwritten crop insurance has fields which look like they've been napalmed. Other farmers ( I suppose they couldn't get the insurance? ) have been irrigating heavily and should produce a crop about 50-70% of average. IMHO

I saw my first "Bank Forclosure For Sale" sign today in several years but the land was cutover bottomland timber land ( pronounced 'protected wetlands' ) so I figure the farmer might have abandoned it as worthless. Basic upland cutover land not bulldozed nor replanted and undesirable for other uses is still worth upwards of $500-$700 per acre here depending upon drainage, road access and soil type. But the US Army Corps of Mousketeers controls the wetlands and you have to get a permit to bulldoze, dam or anything else! IMHO

All this due to the voracious foreign woodchip demand! Not at all like the late 1980's when the land market collapsed ( looked like today's gold market ) and 20 year stands of pine were going on the auction block! IMHO

But I hear there's a mighty fine crop of lawyers just hatched out this month from the law school and sent off to the feed lots to fatten up! IMHO

Richard Maybury's newsletter. The real letter can be accessed ( for a price ) from this address:

http://www.chaostan.com/

In short, the US now has soldiers in over 100 countries. Clinton seems unable to keep from taking a position in every little squabble. Sad to say, our men are training others to do mightily unpopular acts, that our men wouldn't or couldn't do themselves. Many of the insurgencies, nearly all now, are of the guerrilla variety, and the only way to take a territory is slash and burn, as the Serbs are now doing in Kosovo, and as our soldiers sometimes did in Vietnam.

Clinton in some places is supporting Muslims, a few miles away supporting the Eastern Orthodox against the Muslims. Our foreign policy is a shambles that no one from another decade would believe, much less condone.

Treasury is running operations in other countries without clearing them through the State Department. Our foreign policy looks like an autobahn collision, even before the China trip insulted the Indians, Japanese and Taiwanese.

Sorry I really could go on for hours on this, but it's a gold site. Eventually this mess will indeed be reflected in the price of gold.

MMMMM GOOD, MMMMM GOOD!
The Kitco dogs will be eating high on the "hog".
I can't wait till the new crop gets fattened up.
Maybe I'll go shoot varmints in the MEAN time.
Where are the feedlots so I can get 'em direct?
Oh, never mind. I ain't goin' to Washington.

In a collapse, commodities frequently fall to about their break-even cost of production. In the case of copper ( for conventional copper production processes ) this cost is in the neighborhood of $.60 to .65 per pound. For SX-EW ( Solvent extraction electro-winning ) copper production processes, it is quite a bit lower - perhaps $.40/lb. So for today's close of $.715/lb, we are close to breakeven for a large number of producers. I note that O'Okiep Copper ( NYSE symbol OKP ) was up 7.7% today with the South African Gold mining stocks. Watch this one - its costs have fallenjust as dramatically as the gold mining companies.

London--Jly 6--Despite a recent collapse in the rand, South African gold
producers are delaying forward sales in anticipation of further currency
depreciation later this year, according to a report assessing weakness in
key gold producer currencies from Macquarie Equities analyst Kamal Naqvi.
By Miranda Maxwell, Bridge News, Story .11520

In a collapse, commodities frequently fall to about their break-even cost of production. In the case of copper ( for conventional copper production processes ) this cost is in the neighborhood of $.60 to .65 per pound. For SX-EW ( Solvent extraction electro-winning ) copper production processes, it is quite a bit lower - perhaps $.40/lb. So for today's close of $.715/lb, we are close to breakeven for a large number of producers. I note that O'Okiep Copper ( NYSE symbol OKP ) was up 7.7% today with the South African Gold mining stocks. Watch this one - its costs have fallenjust as dramatically as the gold mining companies.

OOKIEP COPPER ( AMEX:OKP )
http://quote.yahoo.com/q?s=OKP&d=1y

I will add to it to my list.
Thanks,

HighRise

section on gold,as for hits I'am not sure either the WH has been a regular visitor or a lot of folks have droped by,keep getting messages from my ISP that I'am exceding my disc space

This was a $25 stock 3 years ago....just to show the possibilities... http://quote.yahoo.com/q?s=OKP&d=5y

The linkages are inescapable. Are we comforted by the continuum? Or FRUSTRATED? {:- ) )

3rd quarter profits will be unbelievably bad. Everyone is waiting to unload on this succer rally come 20th-23 of July. 4th quarter could pick up some,
but why stay in and face more Asia troubles heading into Sep. and October. Why not leave and come back Nov. 1. Think about it. As long as the dollar holds up, and the CRB streaks toward doomsday ( 200 ) , Gold will go nowhere. After establishment of the Euro, Gold will be set free at last.

uly 6, 1998

Placer's Chile La Coipa processes Chimberos silver

SANTIAGO, July 6 ( Reuters ) - Canadian mining giant Placer Dome's La Coipa processing facility in northern Chile commenced operations this month and has been almost solely turning out silver, a company official said on Monday. "It began July 1," William Hayes, president of Placer Dome Latin America, told reporters.

The silver comes from Placer Dome's Chimberos satellite deposit about 22 miles ( 35 km ) away. La Coipa, which has a 15-year life, will process 34 million ounces of silver for 13 to 15 months with a grade of 305 grams per tonne, said Felipe Ruiz, Placer Dome Latin America's regional director of public affairs.

Its gold production has been reduced to almost nil, Hayes said. La Coipa produced about 365,000 equivalent gold ounces last year.

Turning to Venezuela, Hayes said he expects to have financing for the $600 million Las Cristinas gold project negotiated in September or October so that construction will restart before year's end, Hayes said.
http://www.freecartoons.com/ReutersNews/PLACERS-CHILE-LA-COI.html

ANGLY is the US symbol for ADRs of AngloAmerican, South Africa's largest corporation and an excellent ( I hope ) natural resources company. They own a good chunk of DeBeers, the diamond folks, and DeBeers, in turn, owns a lot of AngloAmerican. The gold mine resources of AngloAmerican and some or all of the gold mine resources of DeBeers have been put into a separate corporation, AngloGold, which is fifty per cent or so owned by AngloAmerican. Sorry, I don't know much about AngloGold pricing.

who was it who said:
'free at last..
thank god almighty
free at last'
....
?


"...Gold will
be set free at last. ...."

I've no background in financial affairs, but it seems logical that having executives' compensation based on stock performance could lead to "creative accounting" bordering on the illegal. Isn't the former CEO of Sunbeam under investigation for such dealings? Please let me know if this is off base, but I haven't heard this discussed as a possible artificial inflater of the bubble.

From this week's Economist: Beijing University student to Clinton;
"What are you hiding behind your smile?" bbl

What in the world is the stock market rallying for? I'm playing the rally using a European mutual fund as I will have adequate time to get out due to time changes. Invesco's Euro. fund up 38% so far. I know, it's dumb but it works.

jonesy:
I trust most the French as far as a true engagement in direction of gold backing or even gold standard is concerned. Second most I trust the Italians and the Austrians to be advocates for gold. The Germans are too by conviction, but they easily bow to demands from the american/anglosaxon corner. I think the Europeans in general ( i.e., the CBs ) have in their majority no interest at all to push down the gold price. But I do not expect them to say anything which gives the gold price an immediate push north. They will be careful not to say such things.
They feel they have time and want a gradual, slow raise in the gold price. I really think you need not worry that they, as a majority, will want to push the gold price down.

However, I'm getting more and more the impression, that Duisenberg belongs to the american/anglosaxon faction. We got him thanks to Kohl's typical stupidity in financial matters. ( Kohl has also screwed up the German unification economically and fiancially. He bullies his politics forward no matter what impact this has financially. He thinks, "we have it, so what." The way he handled the unification financially has not only hurt Germany. He followed in principal the IMF/Jeffry SAchs concept: Consumption first. That bought temorarily the approval of the masses. Unfortunately, at this time the CEO of the Deutsche Bank, Herr Herrhausen, has been killed by terrorists. He was the onlyone who had real vision. I think Kohl would have listened to his advice. The secret service gangsters always know to arrange the right kill at the right time! )

Great discussion today on this subject. IMHO you can bet the farm that
the powers that be will never allow deflation to set in. The lack of
tax revenues brought about by deflation will not be tolerated by our
tax and spend congress. They will inflate beyond belief until their
backs are pushed hard against the wall. When that game is over, then
what? Your guess is as good as mine.
Comments anyone?

'Jes kidding! Its a 1 to 10 reverse split, but try showing it to a friend who doesn't know that. http://quote.yahoo.com/q?s=USERX&d=3m

Deflation may come so suddenly and so strong, Government will not be effective. The cloud has started to cover us.

Bill Clinton will be covered by..The Cloud. That may be the only good to come of this. We could be looking at YEARS, getting out from under The Cloud.

Or anyone else, but there is going to be a huge amount of money lost in stocks and bonds, and in commodities. Cash will be king, gold has an outside chance, waiting for the paper to get cheap

Prometheus...I don't believe a fraction of what that pissant Clinton has done has even been explored let alone even come out yet...

from his "I have a dream" speech.

The MLK speech was great, but if you have investments you better watch your back. Along with the rest of us. The gist ya know of the post.

Your investment experiences are soon going to get more intense. Red lights are going off all over the place. Exersize great care.

I haven't posted my Market Comments very much lately. the gold market is putting me and everyone else to sleep.

Still, we had the $12 rally three weeks ago. Gold slid for several days after that. Then we had the $4 rally on July 31; and that time the XAU participated rallying more than 4% that day. Things went quiet with the holidays in Canada and the U.S. and they're still quiet today.

I think the $12 rally three weeks ago signaled the market's understanding that the economic powers that be are going to try their darndest to bring down the dollar relative to the yen. I don't think they're finished trying.

the strong move up today in some of the South African gold stocks is a very good sign. Hopefully, they're leading the way. The XAU finished positive today. And remember, we're not that far from $300. Sentiment tells us we're closer to $275 than a breakout above $300. But the POG isn't.

Three weeks ago I wrote that this would be a successful break above $300. It's taken longer than I anticipated. But with each passing day without a breakdown, my confidence grows that gold's next significant move is upward.

Hang in there.

The Preacher

Fundamentals, as you know, will keep the dollar ahead of the Yen until money decides to go to Japan. This short term suppont deal will blow over. I believe by the third week of this month.

http://www.gold.globalcenter.net

http://www.ballarat.net.au/~standeyo/Special_News.html

I've offered several posts regarding 'COT' - Commitment of Traders, which imho is one of the most important/valuable indicators & 'pictures/charts ( -worth far more than 1000 words, including perhaps even here ) ,
for any student/investor/goldbug... interested in timing.

I will repeat here, concepts I've attempted to offer/communicate, before.
Firstly: dearborn.com ( FL ) , and Pinnacle Data Corp. ( NY ) ,
are two, reliable sources for Commitment of Traders data/charts.

I will attempt to add a url/re-copy of my CTS/dearborn.com chart on Cotton, with its weekly price, and weekly COT values, included.

I read/hear/find more & more "investment-babble" regarding COT.
I've been one of the most eager contributors, to such.
But, the pertinent point of singular importance, if one is concerned with focussed timing, is...
to look for...
a weekly patttern of lower & lower prices, along with lower & lower net-long values, for the 'Commmercials' component of COT.

Using Cotton as an example of this, it is apparent/can be seen...
that in the last quarter of '97..
the Commmercials net-long values peaked/topped...
and from then, until April 98, they declined...
even as Cotton prices declined.

As I've shared/posted here, at kitco with my esteemed fellow-kitcoites, several times before:
when any commodity ...
( -including gold, which is actually not a commodity - but...
....but that's another subject )
moves to lower & lower prices, and at the same time,
the Commmercials, consistently reduce their 'net-long' values/buying/percentages...
this is the pattern that almost always leads to higher prices/abull-market reversal to the upside,
for that commodity.

Cotton's pattern of prices & Commmercials/COT, from
late '97 into Apr '98, illustrate this, most clearly.
Since then, Cotton's bull market has unfolded.

NOTE:
When anyone simplistically interprets Commercials/COT net-buying
as bullish....
beware.
Timing, like beauty, is in the eye of the beholder.
And, altho a sharp increase of net-buying by Commmercials/COT ( -as in the gold market, currently ) can be potentially bullish; it can also be possibly opening a whole new chapter or progressively lower prices, as Commmercials/COT patterns may, once again, perhaps, perhaps likely, have to work their way gradually... to lower & lower 'net-long' values,
as gold/or any commodity...works its way simultaneously, to lower & lower prices,
until a price low is reached/confirmed.

Sincerely,
David Blair Macrory
goldfever@k-online.com
P.S.
If Commodity Trend Service's weekly cotton chart, with COT values,
does not duplicate, with the url included below, contact them, &/or
Pinnacle Data Corp., for more info on the data/charts,
on-which I base this discussion.

http://cts.dearborn.com/cts/commfut/a48.pdf

of following Rubin's stimulative wishes. It is all smoke and mirrors on both sides.

Anyone have any idea of what kind of budget deficit the Japanese are looking at for this fiscal year? It would seem that tax revenues might be decreasing given the contracting economy. I wonder where the BOJ is going to borrow the money if they're offering 0.5% real interest rates. All the articles on the "bridge loans" failed to mention where the financing was going to come from. Why do I get the queasy feeling that it is going to be the US taxpayer.

This makes for a good sound bite but is erroneous. Increasing liquidity ( modern parlance for inflating ) is what brings about deflationary pressures in the first place. Increasing M3 at the insane rate of the past three years, keeping interest rates artificially low, and a $5.5 trillion debt have all contributed to what even the Federal Open Market Committee deems a market bubble. All bubbles pop.

Deflations are credit contractions as people with money to lend or invest are reluctant to take any risk. Printing money does not get people to invest in productive assets. Printing money is only effective when it is not expected. Inflation, when expected and factored in, causes people to seek safe harbors.

If it were as easy as printing money, Japan would not be in a deflationary death spiral, now would she?!

Japanese banks are being defaulted upon by the rest of Asia and now the Japanese are completely risk averse. Germany is being defaulted upon by Eastern Europe. When Germany and Japan start defaulting on U.S. banks and investors, U.S. banks will become averse to loaning money.

It is all about market sentiment and expectations. We are still climbing the peak of prosperity. When we start falling down the mountain of mayhem, attitudes will be different. Greed will be replaced with fear.

I am not a doom monger. I believe in the innevitability of the business cycle. The more you try to stop it, the more you suffer on the down side. Our government and our Federal Reserve officials are spineless, boardering on official misconduct, as they try to prolong the innevitable instead of providing for a soft landing as is their charge.

btw: Did you see Meridian go up 25% today? Yahoo!!!!!

...Then those politicoes will end up with their backs up against another wall-in front of a firing squad!

By the way, a certain entertainer by the name of Smirnoff broke the word "politics" down into its Latin components for our edification:

Poly = many

Tics = blood-sucking insects

Is temporarily supporting the Yen. Announcements, pronouncements etc. This will be good for both the Yen and gold. It runs out soon. And just as soon as profits are out and people start thinking about 3rd Qtr. profits, its all over.

Summer, that is. I used to invest in a Pac. Basin fund. Japan is strong this time of year, and Rubin knows it.

So Rubin timed his little announced support just in time to ride on seasonal support. ROTFLOL

It's true. You think Rubin didn't consider it. Kiss my !

From now on you will not be pestered with my frequent posts. Tomorrow I start a couple of years of intense work and travel. The past few days have shown the best of Kitco: debate and much hard-earned wisedom and sublime common sense.

We are entering uncertain times. A world economic system that has for many years functioned in a relatively stable way is starting a period of severe instability. A few items of unsolicited advice, especially for my fellow American:

- Gold will soar, if not in a year than in no more than two. But you'll wish it hadn't. For the events that cause gold's rise will bring great suffering and anguish among your fellow humans, and to you.

- Economic instability brings unexpected hardship, unexpected hardship breeds contempt, contempt breeds hatred, hatred looks for a home.

- Do not underestimate the willingness of humans to transform their self-contempt into hatred of groups and to act out that hatred. We do not have ancient tribal hatreds in the USA as in Asia or Europe, but we do have class and race hatreds that are deaper than we like to admit. Keep a close eye out for those who preach hatred. Fight them, for if you do not it is they not the economic hardship that will bring the greatest sorrow to all.

Next report from the road. Best wishes to all.

-EJ

puts a different slant on things. A massive quake devastating Japan would certainly effect the world economy. I pray it does not happen but if it did...good grief...and I obviously do not remain oblivious to the other areas in the least...

I guess what is a little spooky...The Great Reckoning mentioned a major quake hitting Japan...Hmmmmmmmmmmmmmmmmmmmmmmmm

You speak the truth, scary as it may be. May God have mercy . GGood luck!!

Best of luck to you. Be safe in your travels.

Gold soaring will cause much misery...you are correct...not a welcome sight.

Tom

As a former head of currency trading at GS, I bet he considers seasonality and everything else. His reputation preceeds him.

All, esp JP, and Blooper:

CRB index: I agree that the CRB dropping to 200 is a critical number. Could be a sign of being oversold, and readiness for a rally. If the CRB keeps going down, look out below for gold equities!

Inflation/deflation and the US dollar: There is one major fly in the deflation argument, and that is that approximately 50% of our treasury debt is foreign-owned ( could be more than 50% ) . This is a relatively new situation, not seen in the 20's. Our deflation will be with a twist -- once the US markets, and the US dollar finally head south, foreign investors will dump their treasuries. If they do so, my guess is that the dollar will drop even faster, and the FED will be forced to raise rates. This is because the stability of the US dollar overrides the safety of the equities markets. In a situation like this, gold tends to go up, because the dollar is being devalued. ( ie, inflation due to devaluation ) . At this time, the FED will do all it can to keep the price of gold down, to avert panic. That may work for a time.

Hence, do not expect simple deflation in the USA. We will have a dollar crisis, and a short term dollar devaluation which will probably override the deflationary component -- months, perhaps. We could have a equities market collapse ( bear? ) and a gold rally at the same time. But beware gold equities being pulled down by the market suction.

Keep most of your powder dry until after the markets correct and we have a full-blown deflation in this country. Then the gold equities will really shine. Unfortunately this will not be a pleasant time for anyone in the good 'ol USA. Or for the rest of the world.

Words of wisdom...have a good trip...

I have enjoyed your posts and find them to be interesting, educational, and fun to read. Drop in as often as you can and keep us updated. Best of luck, Kitco friend.

Investments of any kind will be worthless. Cash could devalue. Gold, I doubt it. Silver coins, gold coins, goods, food, weapons, Holy Cow.
Hope not. What was that scale Khondrache, or something like that. Can someone expand on this please?

a successfull government employee:

#1. DO NOT MAKE WAVES.......

#2. DO NOT MAKE WAVES.......

In the good ship government, no one really wants to make waves Tolly and no, Clinton will not EVER be investigated an iota of what he should, because of Rule #1, and if that is not good enough, than there is always
Rule #2. : )

I think I know exactly how to stimulate this otherwise
dull and booring Gold Market.

I will now take another vacation where I am totaly incomunicado.

NOW WATCH THINGS POP.

But----Just before I leave I am placing another order because
just like I said back in January 98....This is the bottom.
I get my GOLD really cheap.

Don't worry fellow Kitkoites, I am not selling the farm. Just
getting rid of some nasty paper.

DEFLATION? Cash is king? Could be. But not if the people
running the Euro also get rid of their nasty paper. Not if Japan
finds some guts and also gets rid of a boatload of nasty paper
in order to save the YEN and the BANKS.

Yeah---I know. China is going to devalue and this will trigger
more flight money into US markets. Surely there is a better
place to put your assets than in a country with a 5.5 trillion
dollar debt.

But yet today---Did you see the price increases in Internet linked
stocks? Is that a blow off or what? To me that looks like pure
panic. If you are going to gamble like that, why not assume that
the Euro is going to be a smash hit and that the flight money will
head that direction.

The DEFLATION arguement worries me because it makes all kinds of
sense. I liked ALLENS post on this possibility.

OK, I will split the difference and hold onto some cash until I see
the direction of this market in my crystal ball. NOT.

I am outa here and heading to a cool mountain stream to fish, drink
Rolling Rock and howl at the moon. When I return please have the
POG at 325.00?

Dead bodies, fear, intimidation, Grilling by the libelous, liberal press, that ET looking idiot from Louisiana ( Carville ) . That idiot from Texas. Wind up dead in a park,other than that why be intimidated by the GOVERNMENT.

Billions for Bankers: The Fed


In his essay, "Billions for the Bankers--Debts for the People: An indictment of the Federal Reserve System," Sheldon Emry examines the corruption at the core of the American monetary system. Please read the introduction first. ( Plain and simple explanations of our present monetary system ) .

http://parascope.com/mx/fedm.htm

Thanks for all your posts. You'll be missed. The post I remember you most from was the argument you just mentioned, namely that when we have stratospheric rise in POG, the world won't be pretty. I think the comment was something like "And what will you do with all that money when you have an Ox drawn Chevy, looking for whale blubber?"

Ever the road lies before me
The wind - the sun - and the rain
Long miles from dawn to sunset
To sleep thru the night again
And dawn and the sun awaken
And the long road calls me again.

The lone walk on the long road side
The swim in some sheltered stream
And a billy of tea and a damper
By the cheerful fire
And sleep again, and the dream.

But now in my dream the long road
Runs down to the restless sea
And ever I hear her calling
And calling again for me
The loved voice calling and calling
Come rest, come rest now with me
And I go, glad in my lone dream
To meet again and be with her
Down to the infinite sea.

But the dream fades in the dawn light
And I wake to the day again
The white warm ash of the wood fire
And the road, the sun and the rain.

Kitco has been particularly good since Bart put his foot down. Have seen no holding back or dulling of emotions in the last few days. Re dumbed down American history quiz--May I suggest we dumb it down even further-- 1. When was the War of 1812? 2. Who is buried in Grant's tomb? 3.Who fought in the Spanish-American War? What president is Washington DC named after? You must answer 2 out of 4 correctly for full credit.

FWIW:

At St. Louis on Feb 22, 1892, where delegates were present from more than twenty organizations, a scattering of trade union organizations, took a prominent part in the proceedings. At this meeting Omaha was named as the place and July 4 1892, as the date for a founding and nominating convention of the People's Party.

Some 1,300 delegates attended and launched the new party with an emotional fervor and a belief in the justice of their cause seldom matched in American politics. Quoting the Bible and singing hymns, their battle cry was the summons from Scripture, "Then to your tents, O Israel!" Their cause was to return the American land to the American people; to rescue the American earth and all the rivhness thereof from "predatory plutocracy"; to transform Americans from automatons and pawns in the hands of monopoly to principals with a voice in their own lives and their country's life.

The stage was decorated with red, white, and blue bunting and on it sat the leaders of the Farmers Alliance, the Knights of Labor, anti-monopolists, and Single-Taxers. Across the stage behind them stretched a banner saying, "We Do Not Ask For Sympathy or Pity: We Ask for Justice."

The convention adopted a preamble, drafted by Ignatius Donnelly, which read:
" We meet in the midst of a nation brought to the verge of moral, political and material ruin. Corruption dominates the ballot-box, the legislatures, the Congress, and touches even the ermine of the bench... The newspapers are largely subsidized or muzzled; public opinion is silenced and business prostrated; our homes covered with mortgages; labor impoverished; and the land concentrating in the hands of the capitalists.

" The urban workers are denied the right of organization for self-protection... a hireling standing army, unrecognized by our laws, is established to shoot them down, and they are rapidly degenerating into European conditions. The fruits of the toil of millions are boldly stolen to build colossal fortunes for a few, unprecedented in the history of mankind; and the possessors of these in turn despise the republic and endanger liberty. From the same prolific womb of governmental injustice, we breed two great classes--paupers and millionaires."

The convention signalized the reunion of the common people, North and South, by nominating for President the Union general, James Baird Weaver of Iowa, and for Vice President the Confederate general, James C. Field of Virginia. The delegates wept at this symbol of a reunited people.

FWIW TAke Care

The amount of Y2K information is now coming in at alarming rate and we feel
bank withdrawals are already occurring. People are also beginning to get
out of the market in anticipation of what may be coming.

We are growing more and more concerned over the number of people becoming
aware of this potential crisis due the Internet. It's rapid information
movement has the ability to create a panic before 1999. The concern we
have is for two reasons:
1. a panic would occur at _any_ time because of this
2. those who have withdrawn their cash and shares in anticipation of the
event will be blamed by the rest of society for having caused the
collapse.


It would only take approximately 10-15% of people doing this to start a panic.

Assuming you are one of those people withdrawing cash early and burying it
in the backyard, because of the immensity of the economic collapse that
would ensue, it is very likely a limit would be imposed how much cash a
person would be allowed to have in their "backyard". Furthermore, anyone
having more than that amount would be considered a hoarder as well.

If you choose to withdraw funds, the magic number, at least in the US and
Australia seems to be $10,000 before withdrawals must be reported to the
government. Any number under that, up to and including $9,999, seems to be
permissible. As an American, it bugs me to no end to even have to think in
these terms, but then we all know these are not sane and normal times either.

There has also been a rash of information regarding the amount withdrawn on
ATM machines. Some folks find now the allowable amount has been lowered
from $500 to $200. Phone banking is also being _heavily_ pressed in AU,
another mechanism to automate everything and therefore, extend further
control over our personal business transactions. I find it impossible to
believe this leads to any other path than the numbering prophesized in the
Bible. For nonbelievers, this will affect your lives too, as it means you
will not be able to buy or sell without a number being assigned/implanted
on your body. It is your choice to disregard the darker implications of
this, but those who wish to retain their independence, apart from
government, you will relinquish this freedom when numbering begins. It is
on the way, believe it.

After mulling this over for weeks and months now, it is our conclusion the
best measure against both economic collapse and hoarding issues, is to
invest those "backyard" funds into real, useable hard goods and/or property
out of main metropolitan areas.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The next 18 months and after are going to be extremely interesting, to say
the least. It will be interesting regardless of whether there are major
problems from Y2K itself or not. As for the common sense suggestions...
Within your sphere of influence, try to build Y2K awareness to get folks
thinking. Get people brainstorming on what preparations may reasonably be
made. Try to incorporate as much flexibility and as little reliance on
technology, utilities and community services as possible. ( I know, that's
much easier to say than do. But, for whatever is within your abilities to
influence, it's better to try than not. ) For example, if the power grid is
down for an extended period... If the computers are down, how will
records be handled? If things get extremely dicey, how could volunteer
staff be utilized? Ideally, we need to get coordination and cooperation
between community and regional planning. Instead of just your hospital
doing what they can, how much better would it be if our resources could
work together? Area hospitals could coordinate planning. Local and
regional government could coordinate resources. Local churches, the Red
Cross, food banks, and so on, could work together to provide other
services. I don't know that this is very realistic, but I suspect that
this cooperation may be mandated before we're through.

I expect that within the next six months, we're going to see a lot more on
contingency planning going on at community, regional, and national levels.
( I will become even more anxious if we *don't* see this fairly soon. ) I
would hope that the appropriate agencies have already started to make some
plans. But if they have, it's been primarily behind closed doors. It's
going to scare people as this comes more and more to the forefront. But if
we don't start hearing about some of the planning, it's going to scare
people even more. I expect FEMA will be involved long before the official
event occurs. They'll probably have the national guard and other parts of
the military on stand-by, at the very least. ( Actually, I expect that
they'll be more than on stand-by. I expect that they'll be out in force,
just in case, as a hedge against riots and looting. ) The ironic part is
that the government is in some of the worst shape, Y2K-wise. But us
Americans will probably be looking to them to keep some semblance of order and coordination.

make great fodder for the next X-File movie. I mean Clinton is sooo Evil!! Resembles Tricky Dick and his bagman Agnew doesn't he? And Hillary -makes J. Edgar look like the Pope. Give me a break,break,break!

I would just like to say why I think it will be difficult for precious metals, gold in particular, to accelerate dramatically in world markets. Never was a greater gold bug than me -- I have bot it and sold it at every price known to man, holding as briefly as a minute and a half and as long as some still in the tomato can from 1980. The phrase "...There's no rush like a gold rush" was on the tip of my tongue while people like Howard Ruff spouted his survival stories, encouraging his flock to store foodstuffs by the dwt, and enticing others to buy survival bags of coins in as little as $10 face amounts ( from him, or course ) . I bot SA stocks in the eighties having owned almost all of them at one time or another, hoarded coin and bars, looked through rolls of quarters at the bank for the silver ones, and opened accounts at commodity firms. One even invited me to come to New York ( which I did ) to stand in the middle of the gold pit ( which I did ) just to get the "feel" of the rhythm of the market.

I have traded metals, cotton, potatoes, onions, cattle, grains and beans, eggs, and even the dreaded pork bellie. These were the days when long was long and short was short. One took a naked position, placed a reasonable stop if he/she was smart, and waited for the wheels of the markets to jerk him around. There were no derivitives to trade or hedge with, no puts or calls -- no currency futures, no interest rate futures, no index futures, no options on futures, and no computers. Many of these vehicles have only been available to the investor in the last decade or so.

The trader kept his own point and figure chart, determining resistance and support with x's and o's. I wish to submit that times have changed.

Gold went up when world political, economic, or social jitters occured because there was no place else for money to go. The kind of currency collapse we have seen recently around the globe, and the prospect for much more, didn't phase gold as a protective hedge. Sabre rattling, world leader deaths or removals, natural disaster, central bank selling, etc., does not move the POG any noticable amount, no more than random floor traders shoving each other around knocking off the stops from the hinterland rookies.

Now, when pookie happens, the pro trader flees to another currency with instant computer models telling him where to fly. Or, he may swing into some interest rate options on futures to hedge any and all bets. He can spread, strip and straddle, butterfly, sandwich, leap, or fade and feignt. His computer shows arbitrage strategy to buy in Singapore and sell simultaneously in Chicago, with an option on both in London, all in the aftermarket or Globex

So here's the deal as I see it. The doomsday scenario is the only one in which gold can skyrocket, simply because as long as the paper markets exist and liquidity can be found for the derivitive dollar, gold is and will be an industrial metal, useful in electronics and jewelry. It is not now and will not be a flight to safety. God help us if those markets fail along with their respective governements and the Howard Ruff followers are proven correct after all these years.

feeders in the White House, and the air stinks in this country because they breathe it as well...if that is what America wants...screw em...

My take on things, like I said...screw em...leave and find a new, real country...maybe the time has come...a new nation to be built...

I'll miss your posts and wisdom.
I reckon all that travelin' might give you amnesia - what with all the turns & corners. Might turn you into a moron like you said in statement #7. Golly gee whiz - I "thought" I had some gold somewhere. Must've been a dream.
But don't ferget everything - we need you back here.

P.S. Don't feed the bears.

Did you hear the press report a couple of weeks ago, where in Clinton authorized 40 +/- million be used to supply local police with bullet proof vest.

HighRise

Best wishes, and gute reisen on your trip.

You will be sorely missed here at Kitco.

Hope like friend Nicodemus, you find many places from which to post.

Remember your password!

Promey

derivatives will be the death knoll.

Tom

I came this close|| to giving up on the old USA. But heck, we haven't even tried yet. Remember, Nixon's ratings didn't go down until AFTER the market collapsed and the hearings in Congress had begun. We are WAY WAY beyond that now, without any economic reason d'etre.

Don't give up hope yet, Tolly one, or I'll bore you to death with grand tales of my Revolutionary ancestors, guarenteed to bore you to real tears.

Spud, I was there and the gal on the phone was probably some nice wholesome college co-ed working a summer intern job and who meant well but was probably not born yet on the dates in question! If only I had not thrown my retail records away from the 70's. Anyway, patience, I have a few days off yet, wait till I get back to work and I will inquire of a line boss. Those who set the moulds for the bars surely know.
goldfever, In the coming dearth, I will be entertaining bids for Golden Almond Bar to "Plain" Gold Bar conversion rates; ) Gold is a refuge, but a Hershey Bar has soothed many a rumbling stomach in times of want. I may even reinstate the 10 cent price on private sales, as long as it is a SILVER dime....

Wise up. Nobody is going to give you a break.

Spud, I was there and the gal on the phone was probably some nice wholesome college co-ed working a summer intern job and who meant well but was probably not born yet on the dates in question! If only I had not thrown my retail records away from the 70's. Anyway, patience, I have a few days off yet, wait till I get back to work and I will inquire of a line boss. Those who set the moulds for the bars surely know.
goldfever, In the coming dearth, I will be entertaining bids for Golden Almond Bar to "Plain" Gold Bar conversion rates; ) Gold is a refuge, but a Hershey Bar has soothed many a rumbling stomach in times of want. I may even reinstate the 10 cent price on private sales, as long as it is a SILVER dime....

While on the road, please do the Charles Kuralt thing and let us know what folks are whispering out there.
A couple of years you said. Hmmm - well maybe keep an ear to the ground and have some protection squirreled away. We want you and yours to make it back intact.

P.S. I promise not to barbeque any dogs answering to the name of Paul.
After living with you and listening to you he likely knows more about what will happen these next few years than most of us do.

Bart and all: Long post but believe worth while.

I am repeating a post made some time ago, as there have been several posts recently from some who may be perhaps inexperienced in markets and with the TULIP mania most of us see around us; I sent the post as you see it to all the members of my family back in April. The only reaction I received was from ONE: spry, active, computer literate 80 year old; he took his money out of a mutual fund and put it in a money market fund. His comment was "I have seen it comin for quite a spell!" I gathered info for the post from several sources, but the thoughts are mine. One additional comment: The bubble has not burst yet; be very careful in shorting. IMVHO why not wait for evidence before trying to guess the top of rocketing stocks? This coming BEAR will provide plenty of time to make profits on the downside, again IMHO.



A DISSERTATION ON BUBBLES

April 1998



Dear Family,

I have been following this great bull market in stocks/mutual funds for more than 3 years, now. At the risk of seeming to stick my nose in whar it don' b'long, ( and also being wrong ) , I want to share with you my opinions.

I feel that the market is at or very near a peak that will be the highest we will see for several years. If you are still holding your mutual funds, or holding mutual funds in your 401-K plans, I recommend you move all ( or at a minimum half, if you don't agree with my conclusions and want to wait for the down trend to start ) to the related fund family money market fund immediately. The Money Mkt Fund will pay around 4 1/2 percent interest, and be comparatively SAFE.

This market has exceeded all expectations and, in my opinion, is a great BUBBLE in the last stages of expansion like in 1987, and perhaps even like 1929. EVERYONE is in the market with stocks or mutual funds. Granted, it can still go higher ( how high is the sky? ) . But the basic idea of investing successfully is to buy low and sell high; the market is HIGH! The decline, when it starts, could be slow and orderly, or it could be another crash on the order of 1987. If it is a crash, when

the thing starts down there may be no time to sell; everyone will be trying to sell at once. You may not be able to reach the mutual fund to get your sell order in. In other words, do it while you can and before you lose the profits you have made over the last months/years. The worst that will happen is that you will lose out on the remaining momentum in this bull, which may not be more than 3 to 5 percent

There are many forces at work which may not be clear right now, but which will become clearer over the next few months. We are in the midst of "a very rosy" ( as seen through rose tinted glasses ) time; the media says it can't get any better than this. Guess what, they may be right, but it CAN get worse! They have been harping that there is ZERO inflation; do you really believe that? Has the price you paid for groceries, restaurants, incidentals stayed the same for the last year??

As a for instance, the price for rabies shots at our local vet went from $7 a pop last year to $12 this year. ( After all, the vet's got to put money in the market too, right?? ) BUT THERE'S NO INFLATION! Guess what happens when Greenspan decides that the full employment we now have

leads to price increases ( "in the pipe line and on the way" ) ; or that the market is overheated like his "IRRATIONAL EXUBERANCE" statement of last year meant. He and his Federal Reserve will raise interest rates to "cool off the economy", and bull markets do not like interest rate increases. This may be the pin that pricks the stock market "Bubble", or it may be something else from out of the blue. It may be that THEY are right about inflation, but we get deflation, and markets don't like

deflation either! Also, Clinton is still Clinton. Saddam is still Saddam. What if the price of oil does NOT continue to go down or stay low, but starts UP; OPEC IS stirring of late. The Asian situation

still has not played itself out, and it caused a big drop last October, which has now apparently been forgotten. There are plenty of other unknowns out there.

Another factor: gold mutual funds and the gold mining stocks have been in a multi-year declining bear market and have bottomed during the last 2 months; the price of gold and these stocks "broke out" to the upside during the last few weeks. One factor which may be affecting gold and our own economy is the planned introduction of a common european currency at the beginning of the year 2000 ( which may be partially backed by gold reserves 10 to 30% ) similar to our own

now dead gold standard. The French, Germans and Italians have maintained gold reserves through all of the gold bear market, even though one of the things driving the price of gold down was the reported selling of gold by foreign central banks. The implications of a gold backed currency are not good for "the almighty dollar", and as the dollar goes, so goes our economy.

As a companion to all of the above, I am including quotes from a chapter in a book by Benjamin Graham written in 1934; he is known as the "Father of Modern ( value ) Security Analysis".

The words were written after the '29 crash but, in my opinion, have direct application to the current stock market. REMEMBER THAT HE WAS PERFORMING A DETAILED ANALYSIS OF THE REASONS FOR THE 1929 STOCK MARKET CRASH.



Benjamin Graham in the 1934 edition of his classic investment treatise, "Security Analysis," devoted a whole section of the book to the theory of "New-Era of Investing." What follows are excerpts from that chapter.

"Investment in common stocks was formerly based upon the threefold concept of: ( 1 ) a suitable and established divided return; ( 2 ) a stable and adequate earnings record; and ( 3 ) a satisfactory backing of tangible assets Two of the three elements stated above lost nearly all of their significance, and the third, the earnings record, took on an entirely novel complexion ( in the months leading up to the '29 crash ) . The new theory or principle may be summed up in the sentence: The value of a common stock depends entirely upon what it will earn in the future. From this dictum the following corollaries were drawn: 1. That the dividend rate should have slight bearing upon the value.2. That since no relationship apparently existed between assets and earning power, the asset value was entirely devoid of importance.3. That past earnings were significant only to the extent that they indicated what changes in the earnings were likely to take place in the future. "Why did the investing public turn its attention from dividends, from asset values, and from earnings, to transfer it almost exclusively to the earnings trend, i.e., to the changes in earnings expected in the future? The answer was, first, that the records of the past were proving an undependable guide to investment; and secondly, that the rewards offered by the future had become irresistibly alluring. "The new-era concepts had their root first of all in the obsolescence of the old-established standards. During the last generation, the tempo of economic change has been speeded up to such a degree that the fact of being long established has ceased to be, as it once was a warranty of stability. "A new conception was given central importance--that of trend of earnings. The past was important only in so far as it showed the direction in which the future could be expected to move.

( "The notion that the desirability of a common stock was entirely independent of its price seems

incredibly absurd. "  Benjamin Graham )

If an attempt were to be made to give a mathematical expression to the underlying idea of valuation, it might be said that it was based on the derivative of the earnings, stated in terms of time.



TFW: REMEMBER THE CALIFORNIA ORANGE COUNTY DERIVATIVE SCANDAL & LOSSES??



"Along with this idea as to what constituted the basis for common-stock selection, there emerged a companion theory that common stocks represented the most profitable and therefore the most desirable media for long-term investment. This gospel was based upon a certain amount of research, showing that diversified lists of common stocks had regularly increased in value over stated intervals of time for many years past. "The combination of these two ideas supplied the "investment theory" upon which the 1927-1929 stock market proceeded. The theory ran as follows:

1. 'The value of a common stock depends on what it can earn in the future.

2. 'Good common stocks will prove sound and profitable investments.

3. 'Good common stocks are those which have shown a rising trend of earnings.'

"The statements sound innocent and plausible. Yet they concealed two theoretical

weaknesses which could and did result in untold mischief.



The first of these defects was that they abolished the fundamental distinctions between investment and speculation. The second was that they ignored the price of a stock in determining whether it was a desirable purchase. A moment's thought will show that "new-era investment," as practiced by the representative investment trusts, was almost identical with speculation as popularly defined in pre-boom days It would not be inaccurate to state that new-era investment was simply

old-style speculation confined to common stocks with a satisfactory trend of earnings.. "The notion that the desirability of a common stock was entirely independent of its price seems incredibly absurd. Yet the new-era theory led directly to this thesis. " The impressive new concept underlying the GREATEST STOCK-MARKET BOOM IN HISTORY appears to be no more than a thinly disguised version of the old CYNICAL epigram: 'Investment is successful speculation.'

Pre-boom standard, the conclusion to be drawn was not that the stock was now too high but merely that the standard of value had been raised. Instead of judging the market price by established standards of value, the new-era based its standards of value upon the market price.

Hence all upper limits disappeared, not only upon the price at which a stock could sell, but even upon the price it deserved to sell. This fantastic reasoning actually led to the purchase for investment at $100 per share of common stocks earning $2.50 per share. The identical reasoning would support the purchase of these same shares at $200, at $1000, or at any conceivable price.

"An alluring corollary of this principle was that making money in the stock market was now the easiest thing in the world. It was only necessary to buy "good" stocks, regardless of price, and then to let nature take her upward course "An ironical sidelight is thrown on this 1928-1929 theory by the practice of the INVESTMENT TRUSTS.



TFW: THESE WERE THE EARLY EQUIVALENT OF OUR MUTUAL FUNDS



These were formed for the purpose of giving the untrained public the benefit of expert administration of its funds But most paradoxical was the early abandonment of research and analysis in guiding investment-trust policies. However, since these financial institutions owed their existence to the new-era philosophy, it was natural and perhaps only just that they should adhere closely to it. Under its cannons, investment had now become so beautifully simple that research was unnecessary and statistical data a mere encumbrance. The investment process consisted merely of finding prominent companies with a rising trend of earnings, and then buying their shares regardless of the price.

Hence the sound policy was to buy only what every one else was buying--a select list of highly popular and exceedingly expensive issues, appropriately known as the "blue chips." The original idea of searching for the undervalued and neglected issues dropped completely out of sight. Investment trusts actually boasted that their portfolios consisted exclusively of the active and standards ( i.e., the most popular and highest price ) common stocks.



TFW: THESE ARE NOW OUR INDEX FUNDS



"The man in the street, having been urged to entrust his funds to the superior skill of investment experts--for substantial compensation--was soon reassuringly told that the trusts would be careful to buy nothing except what the man in the street was buying. "IRRATIONALITY could go no further."



TFW: REMEMBER ALLAN GREENSPANS WORDS OF 1997??



"The self-deception of the mass speculator must, however, have its elements of justification. This is usually some generalized statement, sound enough within its proper field, but twisted to fit

the speculative mania. In real-estate booms, the "reasoning" is usually based upon the inherent permanence and growth of land values. It is amazing and alarming to see that the "investment" techniques used then and now are identical, driven by the great investment oxymoron "momentum

investing." In the new-era bull market ( of 1927-1929 ) , the "rational" basis was the record of long-term improvement showed by diversified common stock holdings.

"Hence in using the past performances of common stocks as the reason for paying prices 20 to 40 times their earnings,



( TFW: MANY MODERN STOCKS NOW HAVE P/E's OF 100+ )



the new-era exponents were starting with a sound premise and twisting it into a woefully unsound conclusion "Considering the 1927-1929 period, we observe that since the trend-of-earnings theory was, at bottom, only a pretext to excuse rank speculation under the guise of "investment," the profit-mad public was quite willing to accept the flimsiest evidence of the existence of a favorable trend. Rising earnings for a period of five, or four, or even three years only, were regarded as an insurance of uninterrupted future growth and a warrant for projecting the curve of profits indefinitely upward "The prevalent heedlessness on this score was most evident in connection with the numerous common-stock flotation's during this period. The craze for a showing of rising profits resulted in the promotion of many industrial enterprises which had been favored by temporary good fortune and were just approaching, or had actually reached, the peak of their prosperity."



Graham concluded the chapter on the new-era theory as follows:



"This illustrates one of the paradoxes of financial history, viz., that at the very period when the increasing instability of individual companies had made the purchase of common stocks far more precarious than before, the gospel of common stocks as safe and satisfactory

investments was preached to and avidly accepted by the American public."



END QUOTES



If just a few outdated phrases were changed, the above would pass for a completely accurate synopsis of "investment" practice in 1997-1998. It is amazing and ( should be ) frightening to see that the "investment" techniques used then and now are IDENTICAL!!!



I have said my piece; if all this seems opinionated and intrusive, I'm sorry, I do not wish to be. I just feel as if I owe you all something. And if you are already in money market funds, good for

you; but if not, remember, in spite of what everyone is led to believe:

MARKETS DO NOT KEEP GOING UP FOREVER.



TFW ( The Family Worrier )

If I could just do it again on some stocks!!

Only a double? heh heh. I recall one night Ziva posted a LONG and rambling post that took forever to scroll through, 5 times! Needless to say, I went to "short text" mode that night!

My thanks for the thoughtful posts, my applause for handsome style-platter on which they were served!

"But then begins a journey in my head
To work my mind" Good fortune, good lines, God speed. {:- )

My limited technical exp. tells me we have an inverted head & shoulder pattern on the XAU!!!! Let`s wait for a break-out of the neck for confirmation. I have a strange feeling, some inherent event is on the horizon..............SOON!!!! waldo, up, up,& away............

Where's Waldo...

Doesn't Yahoo have an earnings report due out on Wednesday ? That could be a trigger for a squashing of the tulips, then again, maybe not. Sanity doesn't seem to apply. Maybe I'll throw a couple'a hundred bucks at a short just to see what happens ( that is, if I can find anybody that'll sell me one ) . Thoughts on that ?

Answer's to Auric's 22:31
1 ) When was the War of 1812 - WHAT? ( Begun, declared, negotiated, filmed, fought, over? )
2 ) Not WHO - WHOM! And the answer is: Whomever Mr. Grant gave permission to be buried there.
#3 ) Many, many people especially in Florida and the suburbs of L.A. Hunker Down - at the Alamo! ( Or something like that. )
Fore! ) Superman and Batman's Editor and President of DC comics, Washington Heathrow the Third.
5 ) The prize had better at least be a tenth oz of gold or better.

It's a dumbed down quiz, geared to publicly ejucated skolars, for CRIPE'S sake!

Soybeans ( CBOT )
Aug
628.00
632.00
628.00
631.75
+6.00
7/6/98
20:35


Soybeans ( CBOT )
Nov
598.00
601.50
597.50
601.50
+7.25
7/6/98
20:27


Soybean Meal ( CBOT )
Aug
160.50
161.00
160.40
161.00
+0.80
7/6/98
19:51


Soybean Oil ( CBOT )
Aug
25.70
25.79
25.70
25.79
+0.17
7/6/98
20:13


Corn ( CBOT )
Sep
239.75
244.50
239.75
244.50
+5.50
7/6/98
20:28


Corn ( CBOT )
Dec
244.75
250.00
244.75
248.50
+4.75
7/6/98
20:34


Wheat ( CBOT )
Sep
281.75
283.00
281.75
283.00
+1.25
7/6/98
20:10


Wheat ( CBOT )
Dec
299.50
300.00
299.00
299.50
+1.25
7/6/98
20:26


Oats ( CBOT )
Sep
121.75
125.25
121.75
125.25
+0.25
7/6/98
20:20

All: Before we let the gold bull rest in peace, consider food commodity prices. This year the ElNino may wreak havoc with crops, even though now the weather trend is currently reported as good. So, commodity prices might actually bottom after all. Just think about all those forest fires in Florida. And then we have a likely La Nina coming.

My guess is that US inflation will return before deflation dominates. Deflationary events will dominate later.