With the shenanigans going on with the Nobel
arbitrage firm, it got me thinking about the gread
of the banks which seems to be moreso now than
ever. Could it be that since most of the scions
of industry who sit on these bank boards know that
by 2000, the jig is up? They had to authorize the
huge expenditures for y2k remediation. As usual,
the powers that be know the future before the
unwashed.

Where are you? ... About all I can remember from German 101.

Solon created the first 'Jubilee' in ancient Greece wherin ALL debts were forgiven, and this became an infrequent event.

G'nite ... Bob in DC.

ORCA -- Funny money is as funny money does. It can and does cause the most extreme things to happen. Shall we call those 'things' done yet? Perhaps. Perhaps not. We sahll see. However, WE do know that those funny CONfidence games do come to an end. This usury-based one has THAT written all over it! Has from day-ONE! Can we now percieve what else they can though into it to keep the CON going? Never before in our history, except for the great depression, have conditions been SO ripe for a recconning; Who's to bail out the debt? Who can pay it? Who can keep it going any longer? NOBODY!!! The great washing is near upon it. I would GLADLY like to know how it can be absolved without the forthcoming pain! I'm sure the FED and government would also!!!

BoardReader -- Thanks. Much Appreciated.

Xau should make a short term high between 78-80 take profits and wait for a pull back. Dec Gold should make a short term high between 301-303 take profits and wait for a pullback.

Current positons
Short snp at 1075 may get out in the morning looking for another rally.
Long Dec gold at 277 and 291
Long dec silver 4.85

"What exactly are the market participants worried about?"...

The proliferation of the derivatives business, which is essentially an OFF BALANCE SHEET phenomenon ?

Customers have bought "lemons", derivatives that they do not understand ?

Management "ethics" or lack of, in both derivative creation and consumption......their level of exposure...?

Too much power held by the large hedge funds ? Which may be beyond the market ?

Lack of disclosure ? Accountability ?

What internal checks and balances exist ?

Over the Counter deals, are essentially beyond any form of regulation !?

Has the derivative market outgrown its regulatory overseers ?

"Traders are always ahead of management, management is always ahead of the regulators, the regulators are ahead of the auditors, and the auditors are ahead of the lawyers".....J Heimann _ Merrill Lynch....

How ironic......when the music stops, who wins ???

And so, who is leading in the Derivatives Stakes....looks like "Out of ther Money Options", flolllowed closely by "Naked Options", and in third place we have "Knock out Options"..............

A the "Bhouys" still deny that gold shortfalls are at the core ?

Och aye

Haggis

THE Powers-that-be already know where they'll be ( and where they WON'T be ) come the 'time'. Do YOU? They expect to pick up the pieces with their jack-boots. And amazingly, many many hungry people will buy their line. Very very much like Hitler with Germany! Expect it!!!

comex silver stocks still are declining precipitously. regardless of whether they are exactly accurate or not, we do know they are very low. it is my thought that this obvious move in metals could be exagerated in silver in several ways: to date there has been little speculation. with speculation, besides the snowballing effect 1 ) inventories will be further reduced, faster, and it may cause large users to start stocking up at these low prices and low interests rates. silver the poor mans gold. i saw the average guy in the street in 1980 routinely buying 100 oz bars. i don't think there is enough silver to allow that same phenomenon to manifest itself again without much higher prices.

BoardReader -- We'll have a GREAT 'Jubilee'; A GREAT debt 'forgiveness'. But don't expect a lot of 'jubilee' out of it at this time. "Tis not quite that kind of time. Nope. This one is going to entail a WHOLE lOT of PAIN! The more so 'cause we all ain't all on the 'land' anymore, growing our own food and substance.

" This one is going to entail a WHOLE lOT of PAIN! The more so 'cause we all ain't all on the 'land' anymore, growing our own food and substance"........... well said

Indeed, City Slickers sure are going to do it tough........

Meanwhile, here in Outback Western Australia, we continue to explore, evaluate, develop and `mine GOLD......

Greenstone -- 'Mine' some grub while you're at it. The store may be closed, regardless of the metal in hand!

Equity markets fall sharply on worries Long-Term Capital Management may be only the first to fall. The impact on other funds, brokerages and U.S. banks is unknownBy AMANDA LANG New York Bureau The Financial Post
The 11th-hour bailout of New York hedge fund Long-Term Capital Management LP is just the thin edge of the wedge, traders warned yesterday, and other funds could also be in danger of collapse.
That could mean a massive shakeout as funds with highly leveraged positions that have turned sour face mounting pressure from their lenders.
What is less clear is how that shakeout might affect brokerages, investment dealers and even some of the largest banks in the U.S., all of which are tied to the funds in intricate loan and trading relationships. That uncertainty sent equities down sharply yesterday, despite renewed optimism the U.S. Federal Reserve may be contemplating an interest rate cut.
Wednesday's bailout plan for Long-Term Capital, cobbled together by the Federal Reserve Bank of New York and a who's who of banking elite on Wall Street, is an indication even the best bankers in the U.S. aren't sure what effect such a failure might have. None of them seems to want to find out, however.
Long-Term Capital, run by former Salomon Brothers Inc. bond trader John Meriwether, is not the largest hedge fund in the U.S., but it is one of the most aggressive and has been a Wall Street favorite, reportedly producing annual gains of 41% in 1996 and 17% in 1997.
It uses highly leveraged investments to create those gains, but that level of debt  up to 26 times its assets of about US$4.8 billion at the start of this year  threatened to push the firm into bankruptcy unless it was bailed out fast.
Such firms as Goldman Sachs & Co., Merrill Lynch & Co., UBS Securities Inc. and about 14 others agreed to inject US$3.5 billion in Long-Term Capital to cover claims made by its lenders.
In return, the group will have a large equity position in Long-Term Capital, and a handful of advisers will begin managing the fund's investments.
In a statement late Wednesday, Long-Term Capital said the cash infusion might help it recover some of its losses on high-risk bond investments. Just a few weeks ago, it tried to solicit additional capital from existing investors, as well as from outsiders that reportedly included U.S. financier George Soros, head of Soros Fund Management.
In a Sept. 2 letter to investors, it said it had lost US$2.5 billion, or 52% of its net assets, year to date. At that time it was believed to have US$2.3 billion in assets with about US$90 billion in trading positions.
The new injection of capital is expected to raise the value of its assets to a little more than US$4 billion.
Sources on Wall Street said yesterday as many as half a dozen other large hedge funds  those with more than US$500 million in assets under management  could be headed for a fall.
At the beginning of September, Soros's US$22-billion fund had lost US$2 billion over the previous year in Russian investments.
In August, Texas-based fund manager Dana McGinnis became one of the first to wave the white flag: he put the three hedge funds he runs under bankruptcy protection after lenders made a margin call  a request for cash against the US$200 million he had borrowed to buy Russian debt  after Russia defaulted on US$40 billion in ruble-denominated debt.
The problem was exacerbated for hedge funds because in Russia hedging was not easy, so investments in Russian bonds were essentially a one-way bet on prices.
Still unclear is how severe an impact hedge fund failures might have on the banks and investment firms that lend to the funds and trade their positions.
Hedge funds almost always are private limited partnerships and as such, do not publish detailed reports of their investments. They are not regulated the way mutual funds are, and there is no limit on the amount of leverage they can use, or the size of any one investment.
Steven Lonsdorf, president of Van Hedge Fund Advisors International, said Long-Term Capital's plight will probably force regulators to look at the rules governing hedge funds.
In addition, banks might find themselves subject to new regulations about the amount of leverage they can extend to any one client.
"Banks probably have substantial exposure" to risk of default by the funds, Lonsdorf said. In Long-Term Capital's case, it had credit lines with most major banks and brokerage houses in the U.S.
"Obviously they are not the only hedge fund that engages in these strategies."
Funds generally pay 20% of any partnership profits to their managers, and also tend to make investments designed to limit risk. For instance, while buying equities long, a fund might hedge by shorting Standard & Poor's futures.
While most funds use some kind of computer analysis to invest, some are more exclusively quantitative, while others, like Soros's fund, make fundamental gambles on price movements of such things as oil or gold.
Not all hedge funds are leveraged, Lonsdorf said. In fact, in Van's database of 2,600 hedge funds worldwide, about one-third use no leverage at all in their investments. About 54% use low leverage, defined as a ratio of less than 2 to 1 against its assets, while 16% use high, defined as a ratio greater than 2. With leverage as high as 26 to 1, Long-Term Capital was in a very small class.
"That is asking for trouble in volatile markets like these," Lonsdorf said, referring to market behavior that does not fit historical patterns.
He said the Fed or other regulators could look more closely at banks in future, and could also require hedge funds to make more complete disclosures.
A Fed spokesman declined to comment.
While fallout from Russia continues, one danger that still looms for hedge funds and banks is their exposure to Latin America, which could be contaminated by the economic turmoil in Southeast Asia and Russia.
At the end of the first quarter, U.S. banks' exposure to Latin America was US$76.4 billion, according to the Fed. That's 10 times their exposure to Russia.
Those figures capture commercial lending and other conventional forms of credit. They do not include lending to hedge funds, something that now has some experts worried.
Brazil may be of biggest concern. Its stock market has fallen 32.5% this year, and interest rates have risen sharply. U.S. banks have a US$27.2-billion exposure in Brazil.
But unlike Russia, Latin American countries are not likely to default on their government debt.


APH- I have closely followed your trades and believe you have an outstanding track record. However, I have noticed that you entry points are very 'skinny' when posted. That is to say that when you put up a post 'to buy Dec silver 495', for example, it never got back there! Maybe I am saying that you have allready established your position and then when you post to this group, they can not get the same price! This is by no way a criticism, you must take care of your ideas personally first, after all, this must be the way you make your living!

On the other hand, your stops are extremely tight and keep your trades well protected! I just want to thank you for sharing you insight with this group. I do not care what methodolgy you use, it obviously works for you!

In the final analysis, the decision to buy or sell is very personal. You can use the biggest computer in the world or you can flip a coin, ultimately the decision comes down to a buy or sell!

Thank you so much for sharing your trades with us. In my two years on this forum, you have been the most succinct, humble and accurate poster!

I went to the annual Stockholders meeting today at Claimstaker Resourses. A very interesting day. The blackdome property is very real. This company is going to have great cash flow starting in Oct. The real exciting aspect is drilling commencing in early Oct. on the Golden Trend Property. This property is located in the Carlin trend and has great showings. I have taken a substantial position and will take a greater one tommorrow.

Thanks

ALL paper WILL be aflame. Doesn't matter if it is imprinted with 'gold'!

No glee here
But - today really vexed the algorithm ( be quiet tsetse ) :
Revised XAU exit points ( poota says CHECK DAILY now ) ...
[Had to change from "puta" for lingustic reasons - no es mi lingua]
LOW 66.03 ( my low exit point a profit !!!!???? )
HIGH 88.14
Wow ( Caveat :this is what I alone am following, My money = my risk )

I get the feeling that the derivatives spring is sprung ( not unwinding ) .
It may take 3 to 4 weeks for this to become manifest.

Squirrel,
Wife says Sunday am. Does that work?
Warning - Will have little one in tow.
I will bring a gift - well a concept at least. : )

Bart,
I guess I missed a lot by scrolling on by ( scanned ) ...

KMA - Kitco Metals Association ; )
REMF - Really Excited Metals Fanatic ; ) !
( Hey, I'm a civilian - but my dad: geologist + Peleliu ( sp? ) , etc ) told me things )

BTW, would anyone be interested in a Vietnam oral history site? Let me know.

Last note - anyone else find a full-page ad for Saudi/US relations in their paper today ( by the Saudis ) hmmmm?

Please let us know if you decide to bail out of your SnP short. I'm short from the same level and looking for a lower close on Friday. Resistance at 1050 and 1025.

The lawsuits are going to be thick and heavy
on this LTC debacle. As I understand it, the
deal is this-- The institutions that bailed
this fund out get 90% of the shares. The managing partners get 10%. This includes Meriwether, Scholes, and that other Nobel economic genius from Harvard. The other chumps, the ones who put in a minimum $10,000,000 apiece, are hosed. ( serves 'em right, if you ask me ) Lots of big corporate lawyers getting ready to do battle, eh!

Anybody have any comments ( buy, sell or ? ) Claimstaker Resources?

The "bailout" , and the subsequent re-allocation of the companies equity, can only make sense if a GOLD DERIVATIVE position is involved....

370 tonnes of GOLD, 12 000 000 ounces.......US$3.5 billion

AND STILL TO BE DELIVERED......or was the paper gold bought.leased from the FED in the first instance ?

The qeustion, what is the investment portfolio of the fund ?

I do not quite understand why people are missing this.

Let me refresh minds.

October 1997 - Soros funds sell chunk of Newmont at $45 or so ( still largest shareholder - hello!!!!!!!!! )

Next - Soros funds borrow 2000 tons of gold from IMF and sell in market, buy T Bonds with proceeds. Is this true? I don't know. Heard it on radio program in Alaska. Could be?

August 1998 - Soros funds lose $2 Billion in Russia investments

August/September 1998 - someone buys huge position in Newmont at $14 to $18 per share. Rumour is it is Soros.

Early September 1998 - Soros testifies before US Congress - world financial system coming apart at the seams. Send money to IMF - give to Russian Mafia! US House says hell no! ( Soros has Newmont hedge. )

Mid September 1998 - Huge US hedge fund bailed out with Federal Reserve
pressure. Rumour is they have huge short position in gold.

Hello!!!! Listen to the tale of the tape. Soros knows damn well that there are large hedge funds in trouble with many positions and that they may only have one profitable position and that is their short gold trade, but........ when they try to cover it, who is going to sell it to them in this market?

Uhuhhhh?

We heard about Harvard yesterday now other universities report losses.
I fear this is just the beginning. What about all of the building programs underway based on University assets invested?

9/25/98 -- 12:10 AM

Schools' endowment funds suffer as market drops

Larry Goldstein, senior vice president for NACUBO, said colleges and universities are familiar with short-term stock market volatility. The 1987 drop, he said, was a dramatic hit when it happened.

``But most schools didn't do anything,'' he said. ``They waited it out and they were rewarded with a wonderful market thereafter.''
http://www.tampabayonline.net/news/news101h.htm

HighRise

What is the supposed "magick number=massive bank insolvency" for the Nikkei? 13650?, because it sure looks like there's a floor around 13700.

I got an options agreement contract from my bank this morning in which, if I choose to participate in level 2, required a margin account. Level 2 included spreads, straddles, and combinations. Buying only. Why would they require an margin? If I am buying puts or calls, ( cash options not physical delivery ) my exposure is limited to the cost of the option is it not? The potential gain is theoretically unbounded, but the downside is already paid.

The next thing that confused me was the odd wording about exercising the option. On a European style option, say DJX puts, do I need to take affirmative action prior to the closing on the expiration day to receive the cash profit? ( We're assuming the market fell below the strike? ) The wording, if I read it correctly, was that it would expire worthless, even if there was profit, unless I took action. I thought in a cash position my role was passive if I chose not to sell the puts prior to expiration..

Those are questions I'd like answered as well. LTCM kept their positions secret, even from their investors. I've seen that 350 tonne short figure several places on the net, but no source is named. Your theory is interesting and fits with the numbers. I say we give a Gold Star to the first poster who can confirm or refute the story with sources.

Since when, on the positive news that one US Bank lowers Prime Rate the following happens?

30 Yr. Bond is Down....interest rate up?
Markets go Down?
Japan 13784.62 -421.16 -2.96%
Brazil 6844 -436 -5.99%
Mexico 3690.480 -211.710 -5.43%
US S&P 1042.72 -23.37 -2.19%
Gold goes Up?

Will the Fed lower interest rates when:

The U.S. economy grew 1.8 percent in the second quarter, the Commerce Department said, up from the previous estimate of +1.6 percent.

Most economists had looked for U.S. gross domestic product, the broadest measure of economic output, to grow by 1.7 percent in the quarter.

The implicit price deflator, a key gauge of inflation, rose 0.9 percent, up from the prior estimate of +0.8 percent.

The Labor Department said that initial claims for state unemployment insurance benefits declined 8,000 to 292,000 in the week ended Sept. 19.

U.S. durable goods orders jumped 1.6 percent in August, the Commerce Department reported, far above most forecasts of a 0.1 percent increase.
http://cbs.marketwatch.com/archive/19980924/news/current/bonds.htx?source=blq/yhoo&dist=yhoo

HighRise

Arden you are right on with your comments about APH. He is the most unelfish person that I know of on this site and any other. Most people keep their information close to the vest but APH is magnanimous in sharing.

http://www.bigcharts.com/intchart/frames/frames.asp?symb=%5Exau

Thanks, I have noted your trading acumen also. I re-evaluate my trades everyday ( really every minute ) so the window of opportunity is very narrow. I try to keep the risk low. When I post a trade I consider it a low risk entry point, usually the trade is good for only 1 or 2 days. The actual entry price may only be available for a few minutes. Therefore may trades never get executed because I;ve figured it to close. All the trades I post are ones Im trying to put on or add on too. I try to get them posted ASAP so Kitco fans can benefit from them if they choose.

http://www.bigcharts.com/chart.asp?symb=xau&time=10&freq=1?idx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&type=2&style=1&size=3&state=0&sid=3599&rand=1889

options, futures, etc are tricky. options can be very over or under valued. i know many disagree with me, but a few major and or junior mining stocks, at these levels are both safer and should reap larger rewards. i like healthy companies that produce both gold and silver. my two favorite majors right now are Hecla HL ( 4 7/8 ) and coeur cde ( 6 9/16 ) both are screaming steals. both of these will act as the main silver proxies, but also produce siginicant gold. for juniors i prefer mining co. that have reserves rather than exploration, at this juncture. canarc, atna, redfern, mettalica, high river gold, etc - good luck. for options i prefer silver to gold.

.

I'm still confused about the implied *meaning* of the contract I was
sent. I'm going home, I'll scan for responses tomorrow morning.

Ex-44 Parabat/Padfinder and RLI-------Maseru?what's the problem ? Send in 32Bat and tell them they can have all the bicycles and beer. Good lads, those. Cheers mate. Pamberi ne hondo

i am not sure exactly what your question is? there are all kinds of margin accounts, and options; and spreads are just combinations of futures contracts. maybe if you ask your question more specifically, i or some one else can help you.

http://search.news.yahoo.com/search/news?p=%22Long-Term+Capital+Management+LP%22

Many of the bankers reportedly discussed whether the collapse of Long-Term Capital would put the nation's entire financial system at risk.

Global speculator George Soros was reportedly approached for assistance but declined.
http://biz.yahoo.com/rf/980924/5a.html
http://biz.yahoo.com/rf/980923/1c.html
http://biz.yahoo.com/rf/980923/1e.html
http://biz.yahoo.com/rf/980924/19.html
http://biz.yahoo.com/rf/980924/bhm.html


http://search.news.yahoo.com/search/news?p=+Gold+Hedge
Thursday September 24, 12:59 pm Eastern Time

NY gold trade dismisses LTCM shortcovering

NEW YORK, Sept 24 ( Reuters ) - Rumors that beleaguered hedge fund Long Term Capital Management had large short positions in the gold market were dismissed by market participants Thursday, most of whom pointed out that the fund was not an active player in the commodities markets.

But rumors began circulating late Wednesday and overnight that the company had a large short position in the gold market that was to be unwound as part of the bailout plan.

``It has never been Long Term Capital Management's policy to comment on our positions,'' a LTCM spokesman said.


``The gold market saw a spurt of short-covering a half-hour before closing Wednesday,'' said Carlos Perez-Santalla, a gold trader for Hudson River Futures on the floor of the COMEX division of the New York Mercantile Exchange. ``The assumption was that it had something to do with Long Term Capital. But I have my
doubts.''

Further rumors began circulating that the fund had large off-exchange positions in the over-the-counter options markets outside of the U.S.

``They have no positions in the gold market,'' said Martin Armstrong, president of Princeton Economics International, who runs his own fund. ``Ninety-eight percent of what they do is in interest rates. They have little involvement in commodities, if any.''

Other gold traders agree. ``Rumors like this tend to serve the gold bulls quite well,'' one commission house trader said. ``They get people talking about how LTCM has to cover millions of ounces of gold, hoping they can run some stop loss orders above the market. But we don't cross paths with these guys at all.''

But as another metals analyst noted, sometimes a rumor of such selling is all the
market needs to rally. ``If there's rumors of fund short-covering, it could definitely lead other funds to do the same,'' he said.

``I don't see any direct impact on the gold market from ( LTCM ) ,'' Hudson River's
Perez-Santalla said. ``It does, however, demonstrate instability in the market, which
tends to be bullish for gold.''
http://biz.yahoo.com/rf/980924/3i.html

HighRise

the headline news here is the multi "trillion" derivatives mkt and potential debacle. i think we may truly be witnessing something historic. dow down today after greenspan as much as guaranteed a rate cut is very ominous and in my memory unprecedented ( 20 years of martin zeig telling us not to fight the tape ) , asia is again way down tonight - does anyone know what gold is doing. i still do not know how to follow gold at night. thanks

http://www.mrci.com/qpnight.htm

Kitco doesnt work half of the time, and isnt now.
http://www.kitconet.com/gold.live.html#londonfix
http://www.kitco.com/gold.graph.html

Gold ( CMX )
Dec
296.70
297.50
296.30
296.80
+0.40
9/24/98 23:11
http://www.mrci.com/qpnight.htm f

GC Z8
December Gold
2968
+4
+0.1
http://www.dbc.com/cgi-bin/htx.exe/dbcfiles/curcommt.html?SOURCE=core/dbc

HighRise

i am sort of new at this computer stuff. can't seem to get that site. something about my server. am embarrassed to say i don't really know what a server is. i have a pretty good computer, but i am knid of like a kid in a jet plane. i'll write it down and ask my kid tomorrow. thanks anyway.

Well now salty ..
You can say what you like about them unmarried
lesbian Maori mothers .. but those Maori boys are real
good Rugby fans .. I mean the way those boys
have learned to sing those ALL BLACK hackers ..
and they can wag their tongues too ( that ones a bit
of a turn off ) just lak the ALL BLACKS do..
Its a whole lot better than our Spring Boks here
trying to sing their own National Anthem .. swahelie
weeli sili Afrika or whatever it is.

i see what you mean. i could not even get the rest of your message.

for ABM ..

You asked some questions .. namely
" It may have been against the law to deposit
gold in Swiss banks - but does that justify Swiss
banks confiscating the gold for themselves
because the depositers have been murdered by
the Nazis -with whom the Swiss collaborated?
*****************************************************
No of course not .. what sort of a question is that.
I pointed out that what they did was ( NOT "may have been" )
against German Law. It would have also been against US
Law. What would have happened to Americans who
sent gold to Switzerland and were discovered ??
Risks have always been involved in numbered swiss
accounts .. for Jews or whoever .. If you dont want
your identity disclosed .. you must give up something.
You blame Swiss for "collaborating" with Nazis .. You
must feel that they should have swarmed down from the
Alps and crushed the Nazi war machine .. dont you feel
that you are being a bit silly ?? Perhaps your statements
may be HURTFULL to Swiss.
then you say
"Furthermore, not an inconsequential amount of
gold is from the gold fillings from the teeth of
Jews sent to the crematoria. So perhaps that will
explain the vehement reaction to your comment."
*******************************************************
A lot of that gold came from Gypsy teeth.. I
received no vehement reaction from Gypsies.
Then you said ..

"Furthermore, there are many cases in which
laws are so inhuman that they must be broken.
Look to many of the apartheid laws in your own
country. "
***************************************************
To imply that I have anything to do with Apartheid
gives me the idea that you MIGHT be trying to
discredit my views by linking me to a South African
background .. right ??? otherwise why say it ???
.. In my original country .. the US .. we call that
a cheap shot .. in the country whose passport I
carry .. Australia.. we call it worse.. I LIVE here
as a resident .. so please desist on that one ..
as far as that goes .. the more I see of the flip
side of Apartheid .. the more justification I see
for the original concept. Im in no way racist .. but
so far I have failed to discover much merit in the
Black African culture.
then you say
" b. Just because you are blasted by many posters
( many of whom may not necessarily have been
Jewish ) "for being anti semitic and pro Hitler"
you react by being more warmly inclined
towards the Palestinian position ( which has not
yet retracted its determination to destroy the
State of Israel despite committing itself to do so
in the Oslo Agreement signed in 1993 ) ???.
Don't you think you are over-reacting??"
***************************************************
No not really ....
Do you REALLY believe that ANYTHING would change if
the Palestinians said "OK we dont want to destroy
Isreal "??? Seriously do you ?? was that another cheap
shot or what was it anyway ??.
.. I understand the Israeli/Palestian situation well
and see no easy accomodation. I have no favorite in
the struggle except for the complication that many
of my wife's relatives and my friends live in Israel.
If I had to fight I would fight on Israel's side but
that does not mean that I agree with the historical
justification of the Zionist movement and objectives.
This site is about gold .. Ive said all I have to
say to you .. what I said stands .. Which is that any
criticisn of current Jewish agenda .. whether it be
"nasty swiss banks" or "terrorist Palestinians" is
not tolerated by some Jews .. and draws argumentation
along the lines you have offered.
The Palestians continue to look better all the time
and Im not over reacting ..
I now brace myself for a small barrage of light
flak. I will not answer any such flak but wish to
advise any potential authors of any such abovementioned
ordinace in advance exactly where they can shove it.

Thanks

cpo

crusty
This is that haka the All Blacks taught the Maoris, clever devils indeed!
http://www.haka.co.nz/kamate.html
salty

for Glenn ..
A few days ago .. you made me very nervous .. with
that 1000 ton disapearance of gold demand from the
800 quid a year CRU guys ..
Now tell me .. aren't YOU feeling a just bit
nervous right about now ????

salty ..
They picked it up in no time at all.
Its a case of natural rhyvim.
crusty

.. for jinx44
If they sent 32 battalion with those
orders you'd never find Maseru again ..
( not that you'll ever find it again
anyway ) .. and ( not that that matters
much ) .

Silver triggering computer buy signals - up to $5.19 30 minutes ago.
This looks like lift off. Rody any read on the lease rates.

British Pound is very close to $1.70. This currency's action is typical of the DM and SF which have been very strong against the dollar after the breakdown from the 100 area ( 98.63, specifically ) . Weakness in the yen has been supportive to the Dollar Index which otherwise would be very weak. The dollar is falling against the European currencies!!! And we haven't gotten to Euro time yet./

Joh Disney, anything on the South African golds - is it a two day holiday there or is Yahoo asleep, agian.

APH says sell gold at 301-03 and the XAU around 80 - gosh just when I wanted to get giddy he sees pull back - probably right - usually is.

Well lets get there .... lets see those hedge funds run for cover. Long Term Credit Mismanagement may not have had a gold short position but somebody does and tightening credit will cause those guys some trouble.

It could get explosive at any time. Interestingly, stocks over night are not particularly weak. This consolidation zone from 93 to 107 on the SPY with heavy volumn will provide quite a base to a rally in stocks if it gets going or horrible overhead if the pattern breaks down.

Coke's earning warning this morning shouldn't set too good a stage for the DOW.

Take off in silver .....

South African gold stocks ( ^jgai ) up 10% at the opening at 1000 on the index - great recovery of the weeks decline.

US stocks still quiet ????

Going out soon for some Chinese ( food that is ) . Just want to jump on my hobby horse for a minute first. For the following commentary I am assuming you are way BSL ( beyond stop losses ) .
........................
I have 'Known' you guys/gals for a year and a half now. Many of you are 'slightly' down on your pm investments. I just want to say this: If you are not a trader---

DON'T SELL TOO EARLY!!!!!

You have not gone through all this pain to only lose a little, or to break even. You are in the only 'real' asset in a crumbling financial world. The downside exceeded your expectations. The upside will blow you away!!! How will you feel if you sell your shares for x, and two years from now they are worth 5x or 10x?? It is going to happen. I can't tell you when. I can't even guarantee the worst is over. The charts are screaming at me that the spike down to @271 was THE bottom.I have been wrong many times before. The road ahead will be covered with unexploded mines. Don't let the spin doctors talk you out of your position. There are HUGE unwound short positions here and they will throw everything but the kitchen sink at you. They will do their best to cover at lower prices. I hope THEY don't succeed. Be prepared for anything and HANG IN THERE. DON'T SELL TOO EARLY!!!!

This rally looks like it has legs this time.

Latest quotes at 5am Gold at 299 silver at 5.20

I hope to hang on - your are right Nick the establishment will throw everything at our positions to try and break our grip. The tops will have been seen over and over again.

Seems to me we are just coming out - the trick is to hold and add on breaks.

I remain curious that the S&P on Globex remains steady dispite 2-3% falls in Europe and the weakening of the dollar now across the board.

Dollar index has fallen below 96

for jims ..
rand at 5.81 .. jse-golds up
98 or a bit over 10 %

is what we may be entering ..
Nick is right is spades ..
This move is on Hedge fund short
problems .. which US Government
is covering .. ho ho .. talk about
a vested interest.
... stuff like "suplus demand all
over the place" will come from
the woodwork .. and the woodwork
is in London.

Reviewing Marshall's posts I support both sides and BEARS too!
1 ) most of his posts are quotes from elsewhere
Suggestion to Marshall: post a few line intro then the url {address}
We can look up the original post if your intro made it sound worth it.
This suggestion applies to others who use up Bart's bandwidth
in a similar manner. Maybe post a SHORT EXCERPT but give us the URL.
2 ) some here, just as there are many worldwide, deem any criticism of their sacred cause as cause for a jihad and censorship.

Suggestion to all members or affiliates or friends or defenders
of special interest groups, ethnic or racial groups, etc.
PLEASE DON'T BE SO DARN SENSITIVE AND READY TO FIRE THE EMOTIONAL ARTILLERY when someone posts criticisms of the BEHAVIOR of individuals or subgroups within such groups. If the evidence or the post or the news appears to be warranted we shall consider it. If it appears to be ranting - then we will try to ignore it. We are a helluva lot more intelligent than many give us credit for. I'd rather have all of us keep our freedom to run information and opinions up the Kitco flagpole for all of us to take shots at than for unpopular opinions to be pre-emptively shouted down.
( this applies to fans of particular sports teams, computer types, ALCOHOLIC BEVERAGES, as well as it does to ethnic groups ) .

We accuse GOLD mining corporations and CBs of being in cahoots to manipulate the Gold market. Members of these groups could post emotionally defensive rants regarding these accusations - or they could defend with facts, etc.

The ADL may very well be guilty of some of what the Marshall posted. So the accusations are run up the flagpole here and refuted on the basis of fact and experience rather than kneejerk emotional defenses.
AND LAST BUT NOT LEASET
I am sick and tired of GOLDBUGS PICKING ON BEARS! Bears are nice critters just trying to make a living. The inflammatory, insulting, derogatory comments about bears are uncalled for. Winter comes every so often whether we like it or not and thus being bearish may be as prudent at times as BULLING your way through the china shop.

I would like to bring to your attention something that looks suspicious:

Yesterday someone noted an article that offered a Princeton Univ. developed report on the " reason " gold is no more. If LTCMismanagement is not the culprit for the rumoured short how about this...from reuters a couple of hours ago..

Analysts said LTCM had been hit hard by a series of bad bets on investments globally.Gold traders said a rumour circulated in the market on Thursday that the fund would be forced to buy gold to cover losses in that market. But the fund declined comment and traders discounted the talk.

``Long-Term Capital doesn't have any positions in the gold market,'' said Martin Armstrong, president of Princeton Economics International, another hedge fund. ``They're
not a factor in the commodity market.''

Is it possible that THEY are the ones running for cover?

One other note...having been a trader years ago, I too recommend that those of you who now see the trend should remember that it is your friend. Don't sell early

These poor Princeton guys and gals should rise up and mount a concerted anti-defamation campaign. Just because they came out against Gold does not warrant using their name as an example of anti-Gold sentiment everywhere. All this anti-Princeton action is probably the fault of the Harvard and Yale fanatics. They'll stop at nothing to knock down Princeton!

http://biz.yahoo.com/rf/980925/fm.html

http://www.goldminingoutlook.com/

Couldn't agree with you more. Disagreeing with someone with facts, rather than an emotional response, makes us a little more civilized. I think John Marshall said that ;- )

.. are awful.

If they want to stay up in the mountains and scalp anybody who comes through during wars that surround them - more power to 'em! May the depositor beware! All is fair in love and war and that was WAR! It is not fair to have a bunch of better-than-thou kibitzers with 20/20 hindsight coming out of their burrows after the smoke clears to criticize those who survived hell and damnation by whatever means they could.

Ei laf eat!
Of the 24 Sub-Indices of the All Ordinaries Index the major movers were: Gold up 55 points ( 5.2% ) to 1,111.5.

are cool ..

I would be UPSET at the tone used in some posts!
Are there not any Maori out there who will defend themselves!

The head of the Financial Supervisory Agency in Japan says he "doesn't know" when the inspection of the LTC Bank will be finished. They have been inspecting this bank since June. I believe it is the third largest in Japan. I wonder if they are hiding something. http://biz.yahoo.com/rf/980925/bs.html

"Don't fire 'til ya see the whites of their eyes, ya say?" Durn, this is too good to be true. My powder is as dry as powder, and I'm packing some into the muzzle right now! Many of my charts show upward penetration of the 200-day moving average already.

and so was my grandpa! We come from a long line of sea-faring folk who figure you mountain dwellers are a bunch of satanic hermits hiding in the hills to ambush people. Mountains are evil places - everyone knew that in the old days. The evil would make you ill going up there - hard to breath, hard to eat and keep food down, hard to just walk! Fierce beasts, snow, cold, avalanches and scorching sun to fry your brains. Evil, evil, evil - you mountain dwellers are agents of the devil!

Nicko Jims

plot Au in NZ$ here
http://pacific.commerce.ubc.ca/cgi-bin/xrplot

Ain't she purty? That looks like great support at NZ$560 after coming out of the trough. I guess, that means the NZ is gonna drop faster than gold, if we're going to see Glenn's 225, Hmm, the S Pacific Peso ( NZ$ ) at US$0.40? Not impossible... not impossible at all.

Now, nick, the NZ/Aus cross-rate has been keeping an even keel at about 0.85, how far below US$0.50 could you see the Aus $ dropping?

Beautiful Jewel has a small windfall she wants to put into physical. Mate, you should've heard the questions she asked me when I looked into whether she should go with her new company's superannuation scheme ( a little like the 401, employer contribs, but fewer tax advantages ) after I read the contracts and all brochures and Trust Deed, she would make anyone proud what she understood of the risks...then she went to the broker who, by all accounts had tail between legs by the end of her discussion. She wants to buy physical....LET'S GET PHYSICAL......

Not time yet, imho, for paper..

Today's National Business Review was v bearish, NZ is now officially in recession, the bright spot say the spin Doctors, is that we're not as badly off as some of our major trading partners. ( Well, that's a relief ) The main cause for negative growth ( spinning spinning ) was not the asian problem. but our drought...again, that's a relief {:-{, would hate tho think how bad things could've got if the asian debt problem came home to roost...another Timber mill closed in Taupo region this week,

There were articles about how little is being done for Y2K, and the "D" word was mentioned in a feature spread about Deflation not being a friend. Yep, there talking about the depression of 1870, now that's a real depression, no mamby pampy 1929 style depression, no sir, I king hit..


Perhaps its time to whistle up Russell, the sixth sheep of the apocalypse..... ( sorry crusty, I had to call him something :- )


Wheeeeeeeheeeeee Russell......Wheeeeeheeeee ....Russell,


now, where's my tupping crayon?

So African golds jumping - what was that about the end of the 5th wave, yesterday. Wish I know enough about Elliot Theory to do a parody - if it doen't go up it goes down . . . a of b of 5 of c....?????

Silver got up to $5.20 about 30 minutes ago, pulled back to $5.19 basis DEC, Gold fell back to 297.80 after getting to $299.

German and London markets off 100 points. Weakness in banks to blame. Falls are gaining steam. They may have to cut interest rates.

See that Wheat at $2.79 - there was a comeback.

London gold 296 silver $5.19 spot.

Love to see them stick the shorts will $300+ and $5.25+ - I don't like shorts they have some of my money, when they give it back I'll be nice and smile.

http://biz.yahoo.com/rf/980924/bki.html

Mountain folk don't get conquered! We absorb and assimilate the barbarians. Look at the Peruvian and Bolivian natives of the altiplano. They still speak Quechua from before even the Incas! Look at the Afghani's - they sent the Russians packing and will do the same to any other bunch who tries to conquer them.
Coastal dwellers are like a bunch of prostitutes - willing to sell out to any bunch of sailers that come in the harbor! You can't or won't defend yourselves.
Mountain folk can melt into the terrain and pick off hundreds to every one of their own that they lose. Short of bombing us back into the stone age with nukes or overrunning us tens of thousands to one like the anglos did to the native Americans - mountain folk are just not conquerable.
We're MEN up here - not a bunch of seaweed sucking, sardine eating wimps!
We'll pick your bones and throw them out with the remains of the last Grizzly that messed with us!

The Second Law of Thermodynamics states basically that "All things tend toward disunity." It should exclude Gold in it's application to World Markets, however. The Giant Paper Money Pile is unraveling as we watch...tending toward disunity...swinging like a pendulum through and beyond the mean. So soon men forget, when they pile things up, the piles must eventually crumble and fall.

Haggis, What derivative regulatory overseers???? I have read there are none, at least directly. Just like the 10% margin in '29! This balloon is close to busting and that is what the markets are sensing, IMHO.

Now that's one ornery skwirl

zeke
bollocks
unity and disunity has nothing to do with it. "Unity" is your bias. ( I wouldn't a seen it if I hadn't a believed it ) The second law of thermodynmics is ENTROPY, that is the tendency to maximise randomness. No mention of unity. just randomness, and that's a bugger for our chartist friends....

Order is anathema to this universe, according to Thermodynamics.


thin long and hard etc
you got it! Bart provides this for our mutual benefit and at no cost to us, we ought never forget that. Now: Welcome.


ALL

Have I missed something?? Did anyone take up the wager with Glenn? TIA?

Bunch of cowards hiding in the hills! You folk never have to deal with really bad storms - like hurricanes and tornadoes. Groveling around in those dark holes for little nuggets of useless metal.
Enough already - flinging mud back and forth like others we know about.
Time to crawl into the cave for a nap.

Come on $300

Goldbug23
I was once on the side of the regulators. There are no international regulators for these derivatives that are being played often by spotty youths in spotty ties. No regulators, no gurantees, just confidence. The risks are huge, if confidence is lost, if there is a fear that the other side cannot settle...it's RUN FOR THE LIFEBOATS....

Now, I really ought to change my tune, but, can anyone spell Herstatt?

http://biz.yahoo.com/rf/980925/b7.html

When Grizz got on a rant about some folks being too sensitive about their sacred ox being gored I figured I'd join in the game - just to show some around here how dad gum ridiculous it can get. If I went back through a day's posts, I could come up with dozens of special interests that ought to rise up and scream bloody murder and go on a defensive rant.
JD had made a comment about lesbians just a bit ago. Just that could get a weekend roar going if we had some homosexuals here to take up the gauntlet.

Marshall should not be 404'rd since his posts were not guilty of any more than a lot of the rest of us {other than using up a lot of bandwidth when a reference to a web site would suffice}.

What a nice surprise to have in the AM. I always thought the little fellows across the pond did not really like GOLD the way we do .Glad I am wrong .

COMMENTS--Freight Train a comming ,hang on

http://biz.yahoo.com/rf/980924/bhm.html

Your post of 22:22 Hope your 'metal' lifeboat ain't just 'printed' on some stock certificate. They come apart REAL fast! About 2 milli-seconds after the rest. An 'enhanced 'earning' in a totally devalued currency is squat! Sounds like Anothers thinking. Is Eldorado just your pseudonym ;- )

crusty
See what you done!
You mentioned the Lebanese! And got skwirl in a turn.
Or was it the Albanians? or Albumens? i get confused easily.

Gold to break $300 "today"?

Not if the DOG* team get to it!

*DOG = Dump On Gold...kinda like the PPT for the PMs...

Europe is a bloodbath...again.

Globex down - more panic
Dollar down - beginings of apprehension
bonds up - loading the life rafts, faith in rate cut
metals up - buying frenzy
oil down - beginings of optimism

Fire in the hole - still sputtering

Comfort feeling: Watching the USD decline against Euros-R-Us, making AU a lifetime bargain. Pile it up to my nose and wait, either for the POG to rise significantly or the Euro to join the global chorus of competetive devaluation.

aurator:
My prof in statistics said: Random is the only valid category in science.

re Thermodynamics: Secret winds always come up.

When the markets of asia were lit up red, we were a little worried. When South Anerica turned red, we were more worried. When Russia went down, panic began. Now Europe is running red.

Gollum
Mine Kapitan! Good to see you awake. Grab some java...We've been bouncing over some fairly heavy ground-flack this am, the sky's been a bit lumpy but there is a golden sunrise over on yon horizon, I'm just not sure how far that horizon is yet...Perhaps you could check your instruments ( As Burke said to Hare ) and report...?

.. I meant to say Lithuanian
thesbians .. got.. all .. screwed..
up

Gold Coins Haven't Lost Their Luster in Turmoil

By TERZAH EWING

Staff Reporter of THE WALL STREET JOURNAL

Gold still trades below $300 an ounce, but the sector of the market favored by individual investors -- bullion coins -- is showing life.

The U.S. Mint says sales of its Gold American Eagle coins, partly triggered by world economic turmoil, are thriving. Foreign nations' bullion coins, including the South African Krugerrand, also are selling well. "It's insurance. It's financial security," says Ray DeMoss, a floral-marketing consultant in Ruston, La., who has been a buyer of gold in various forms since the 1970s. But he has accelerated his gold buying

lately and says the 30 South African Krugerrands he has purchased over the last six weeks are the first gold coins he has bought in a long time. "We're looking at a global money meltdown right now," he explains. "The stock market tanking was just the latest sign. The public's not stupid."

The U.S. Mint's sales figures appear to back that up. As of Sept. 23, the Mint this year has sold around 1.2 million ounces of Gold American Eagles, valued at $350 million, to precious-metals dealers, more than double the 447,750 ounces sold in the same period last year and well above the Mint's average yearly sales of between 300,000 and 350,000 ounces.

In August alone, the Mint sold 255,000 ounces of the gold coins, beating the 198,000 ounces sold in October 1987, the month of the Black Monday market crash. This month, as of Wednesday, it has sold another 209,500 ounces. If the pace continues, the Mint says it will sell 1.5 million ounces this year, the most in more than a decade.

The Mint won't comment on the reasons behind the sudden demand for coins, beyond noting that gold prices have languished near 18-year lows, presenting investors with a buying opportunity. But dealers and other investors echo Mr. DeMoss, saying that despite the two-year bear market for gold, which has seen prices plunge from highs of nearly $415 an ounce in February 1996, they expect the yellow metal soon will play its traditional role as "safe haven."

Precious metals, including gold, have rallied in recent days on the weaker dollar and what some believe is the growing possibility of an interest-rate cut in the U.S. They continued the upward climb yesterday. On the New York Mercantile Exchange's Comex division, the December gold futures contract rose $3.90 to settle at $296.40 a troy ounce. December silver settled at $5.153 an ounce, up 11 cents, also on the Comex.

Bullion coins are different from collectible "rare" coins in that they are backed by the governments of their issuing countries and, in the case of the American Eagle, are eligible for use in retirement plans, including IRAs. American Eagles come in four standard weights ranging from a tenth of an ounce to a full ounce; an ounce coin costs 4% to 6% more than the per-ounce spot price of gold, which now is around $294.

Dealers, who market the coins to investors like Mr. DeMoss, say they have ramped up their buying from the Mint and from other countries with similar bullion products because individual investors are snapping them up as fast as the firms can stock them. ( Investors can't buy the coins directly from the Mint. ) Says Chris Holton, vice president of marketing at New Orleans-based Blanchard & Co., the largest coin dealer in the U.S., "We've seen unprecedented demand. We've never come close to selling this much gold before." Mr. Holton won't divulge specific sales figures but says August sales alone were 18% higher than what the firm usually books in a three-month period. September sales, he says, are on pace to be only slightly below August's. Mr. Holton says his firm recommends a 10% portfolio allocation to gold.

Other dealers tell similar tales. Jim Foster, owner of Liberty Coin Galleries in Long Beach, Calif., where the bulk of the trade is done with walk-in customers, says his sales so far this year have more than tripled

from the same period last year. "It's accelerated in the last two or three months," he says, "but the whole year has been more active than last year." Meanwhile, the Mint says silver and platinum coins ( the latter were launched last year ) also are faring well, with platinum already outpacing projected sales for 1998. But it's gold that is the real star. "It's mainstream investors" reaction to what's going on in the world both politically and economically: the events in Russia and Southeast Asia and also events in Washington. They caused turmoil in the stock market, and investors decided to diversify into gold in order to protect themselves," says Mr. Holton of Blanchard.

Mr. Foster of Liberty Coin says his customers cite not only the recent stock-market roller-coaster ride but also rumors about the havoc that could be wreaked by the Year 2000 computer problem as a reason for

buying gold. "If your credit cards don't work and your bank cards don't work, what will work? Gold," he says. "They buy it 'just in case.' Some people think the world's coming to an end."

Richard Harmon, an unemployed plant-production planner in Broomfield, Colo., says over the last year, and particularly over the last two months, he has bought six gold coins, including four American Eagles

and two Canadian Maple Leafs. He also holds stock in gold-mining companies, and says he bought the coins because "we can't tell the world gold is a good investment if we don't own it ourselves." Gold, he says, "has history behind it. Ten thousand years can't be wrong."

it is for you
Fred
You might like to have a look at POG in NZ$, I posted the link last session. While the NZSE is now fiddling around 1700 down from 2100 just a month ago, Precious is looking better everday. I do still expect a spike down in US$, but I think we've had ours in NZ$. Can't see any reason for any NZ$ strength, Moodeys rating agency just dropped us a notch.

"Four secret winds blow strong"

which is how I also became known as windy

Good morning to you sir. I have been thinking about writing a dictionary. Right now we are working on defining the word "volatility".
I'm going to see if I can work up some good examples for the illustration.

Yes Aurator; Go to the head of the class...or just go to the head! My statement referred to a statistical approach to ENTROPY. Since the ENTROPY of the Universe continues to rise, you are of course, CORRECT AS USUAL. But so am I.

aurator
Does that also mean that "apartheid" has nothing to do with "coccooning"??

We know what "flats" are in the states. But I will disregard your comment f'art's sake!

What's happening with lease rates?

In 1929 after the initial market collapse from the overspeculative bubble and worsening earnings result. It paused and many people bought in. Prices had become more affordable. As we all know, the great bear market of '30 and '31 then plunged on down into the depths of the depression.

It wasn't the panic of '29 that caused national catastrophe.

It was systemic failure. Banks collapsed and hedges went sour.

The amount of real money in the system wasn't anywhere near the amount of virtual money. There was no way everything could unwind once the unraveling began.

The threat is the same today. Just as the capitalization of the bond market is some 200 time that of the equities market, the derivatives market is a behemoth of unknown size. Godzilla is having heart seizures and I don't think everyone is going to scurry out from under before the body falls.

Greenspan and the Fed are pulling back on the stick, and will pull harder. Reports are starting to come in from damage control. Ground approach klaxons are starting to sound. The whine of engine and outside air are picking up.

If the system fails, those of you in options may find them to be worthless no matter how large the book value. Those of you in physical had better have it in your possession.

If the system survives, there will be grat volatility for a while. The Fed and powers that be will pump things up one day, and some new panic will happen the next day. Metals will not escape. People will rush in to buy one day, and out to get back in the equity markets the next.

When it is percieved the markets have bottomed ( prematurely in '29 ) there will be a grat decline in gold from the highs. Not because it is not a thing of value, but because the flight money will be wanting to get back into the markets.

What's that noise? Could that be the first few tree branches as we barely clear the first ridge?

and we all know to whom...today I ask for their forgivness...anger and hatred are not what this world needs...so Mr. President...Mr. Camdesuss and all...I salute you...and I stand ready to help and try to make this world better for everyone...as Jerry Jeff Walker says ready to pick up the pieces wherever they may fall...

This WSJ article is notable inasmuch as it quotes a Kitcoite. I won't give any other clues except it is NOT the last guy.

GOGOLD

"Thank you tolerant 1. I have always knew you would live up to your handle. Right up to the handle, in fact. If you would please forward a cheque for 18 Billion Americain dollars, I would be very much appreciated."

"Eet should be a cashier's check, eef you please."

planet....18 billion eh...may I have until 4:00 pm to remember where I buried it?

I thought Burke only spoke to Wills?

Thanks Delphi for your Options 201 example for straddle trading.

I can recommend any Kitco readers wanting to learn a little about
practical options strategy might cut and paste his example he has
kindly provided below.

In a similar vein, I thought I might share a profit taking strategy
I used today. I imagine our options guru's like DA, EB, Delphi, and
Cherokee are doing this regularly.

You upovers probably know that one of our favourite trading stocks
down here is Normandy Mining Ltd. http://www.normandy.com.au
As Nick in Canberra said below, today it hit a 50% jump in 3 weeks.
Thats 96c to $1.44. One of my positions from last month was long
a 125 call at 8c which was under water for a while and has come
back to a good profit in the last few days.

Choice 1 was to sell at 22c this morning and pocket a 14c profit.
Choice 2 that I followed was to sell a 100 call at 45c instead.

Result: I've got a 2c opportunity cost compared to choice 1, but
I've still locked in 12c and I'm short the 100/125 call spread for
free.

Now the numbers :
Choice 1: Buy at 8, sell at 22, make 14c gross, go home.
Choice 2: Buy 125c @ 8, sell 100c @ 45, I can lose 25c maximum by
being short the 100/125 call spread. But I have a net credit of 37c
from my two trades. So you can see where my 12c locked in plus
my 2c opportunity cost comes from versus my 14c profit in choice 1.

Why do Choice 2 ?
Well I'm taking partial profit. The short call spread is a balance to
the longs I still hold which will lose money if Normandy falls.
Also I can trade a pullback on Normandy ( it is up 50% in 3 weeks ) .
I can buy back the 100c for less than 45c on a pullback and cheapen
the original 125 call position. Or for a riskier trade on a pullback
I could buy more of the 125 calls and turn it into a back-spread or
call-ratio spread.

I realise a lot of readers will find this elememtary and I apologize
in advance but hope this practical example is of use to some.

Caveats: This is NOT ADVICE etc etc etc
Warning: Brokers love this- you stay in the game and pay them 2 or 3
commissions. ( There's no guarantee the average broker will know what
you are trying to achieve, however. )
Further Warning: Not all brokers/exchanges will allow retail accounts
the same margin privileges that they allow to market makers. The broker
may want to keep your 12c to expiry, even though the options exchange
credits it to the broker. etc etc.

Remember: This NOT ADVICE is only worth what you paid for it.

Finally A$ Gold trying to break out: US$298 @ 0.5910 is A$504 troy oz.

Happy Trading All ! John_C@Sunny_Brisbane

http://biz.yahoo.com/rf/980924/bis.html

WOODY : )

fin that shares lives...paradise...go gold...squeak...and Mike Sheller...I love ya man...you are most integral to my evolving...knuckels still scrape the pavement...apparently this is a slow process....

Hey,Hey,Hey, GO RAY!
Especially surprising were the details given in the WSJ article for the reasons people are buying and also the detailed numbers.

You must allow your hormones to replenish before posting lovey, dovey mushprose....GET CAMDESSUS y CLITTON!!! ;^ ) ~ G&P!

In accordance with the PAPER issued........FORTY peopleo own&owe the same piece'o'gOld........what happens when two of them need it at the same time? stay tuned, we'll get to see. SO GO GOLDBUGS!!!

YES.

Does it really spin in the opposite direction than in New York?Although if they are based mostly in gold mine stocks maybe they'll float.Go gold!

All:

To: George S. Cole ( 970 )
From: Bill Murphy Friday, Sep 25 1998 6:29AM ET
Reply # of 1169

George Cole,
Lease rates exploding in London. One month just went up 160 points. Very vigouous around the fix.
Bill

http://www4.techstocks.com/~wsapi/investor/reply-5837949

Aurator: Anti-Entropy is what is happening at this moment ( as Paul said: "... in the twinkling of an eye ..." ) .

Globex down - - ominously down.
Bonds up - - fleeing from the Titanic to the Andrea Doria
Dollar down - - ominously down
Metal up - - spectacularly up
Oil up -- becuase of the dollar, not the economy

John - You do yourself a disservice when you say..."is only worth what you paid for it..." Many times people have made that comment around here and it is simply not true! Thanks for the detailed example. I certainly agree with practically every thing you said and I especially agree with your comment, "There's no guarantee the average broker will know what
you are trying to achieve, however" . Although you think that your example may seem simple to some around here, it is precisely this kind of instruction ( and mode of thinking ) that many others here want and need to be exposed to.

As reported in SI by Bill Murphy this am.

Lease rates exploding in London. One month just went up 160 points. Very vigouous around the fix.

We shall see but it is starting to look interesting.

Get all those who spends PUBLIC MONEY to bail out the INSOLVENT RICH.......

Go Gold ... The time has arrived .......

Sorry missed your post when I pasted the lease comment.

Who would have ever thought that American power would would start to decline with the rejection of gobal free markets as a solution to all economic problems

The insolvent rich. I love it. It points out that being in the "rich" doesn't always mean one has money. More of a class thing.

We may end up with some "low class" goldbugs hiring some very "high class" butlers and servants.

Shorts are going to get BURNED Today. Why should we have pity when they have been attacking us for the past 3 years without a second thought ???

The stock market still acts like a market that has put in a bottom. The news grows increasingly ominous, talk of deflation is on the lips of even the financially unwashed, and lo and behold we have our first "bailout" of the panic.
A huge list of shares are down anywhere from 20% to 60%, short interest on the NYSE is at record levels, and puts run ahead of calls on the S&P by more than 2-1.

A broad number of obscure small cap companies I follow have very salutory astrologicals forming up ahead through the late fall/winter/early spring. A new cycle is coming in for these shares, and amidst the gloom and doom it is time to bottom fish for crushed pennies from heaven and little darlin's which will surprise everyone as the market gathers itself like a cat for a leap up onto the couch. Oh, yes...I like gold too.

I don't think it's the free market system that's the problem. It's the secret market. The hidden world of manipulations, hedges, big deals. If we had a truly free and out in the open market these things wouldn't happen.

They never should have put more than one room in the White House.

Some of these hedge funds that are short gold have HUGE unrealized gains in their short positions....

oh, to be able to realize those gains and go long gold, huh...excuse me, I would like to be FIRST out the door, please....heh heh heh

So if we're picking servants, may I have the resumes of Ted Arnold and Martin Armstrong? I have four miles'o'fence that needs fixin' and a sewer line that keeps gettin' clogged. pleeeeeeeeease........I like clever jokes with my java in da' mornin', too!

I quite agree. The key word here is volatility. The bottoms have lots of whipsaw action.

Remember a few weeks ago when the bottom dropped out of the metals, only to come raring back a day or two later. Then again a few days ago.

That's what made it seem like a bottom was at hand in gold and silver to me.

Now we will see the same kind of thing in the markets.

Eventually it will dawn on everybody that the world hasn't ended, the economy is still strong, and what was all the shouting about. After a few dumb looks at each other they'll drop their pitchforks and torches and head back into town.

Let's see - 120,000,000 ounces and a price move of $ 10 -hum - looks like the bailout bunch just lost $ 1,200,000,00.00 . Leaves $ 2.55 Billion. I said cover @ the market !!!

with equities, for a period of time?" On the other hand, if we're
on the verge of panic, maybe the old rules don't apply, and with
everything pointing down, including fears, we really will be heading down! ( I mean equities, of course ) .
Gold sure looking good...Go GOLD!!

GCZ8 Last: 300.6
http://www.quote.com/cgi-bin/jchart-form?genApplet=yes

"martin....I've got to let you go......you know, you used to be a funny little sumabitch...."

Last Spring I found a sector in the Brihat Samhitra that pinpointed the Spring eclipse as the eclipsing ( detrhoning ) of "tyrants," and it did follow that Saddam Husein fading out a bit. Year before Sept 1 was death of world heroes ( Lady Di and Mother Teresa ) . This August we had a bottom in currencies and gold ( top in the dollar? ) it looks like, although remains to be seen of course. Every year the eclipses are about 20 days earlier aren't they? But I never get the co-ordinates until December. I'd like to look up next years positions. Thanks! Laksmi

You have put your finger on a very important point. The world, including America, despite murmurings and platitudes to the contrary recently, is still in a basically collectivist, authoritarian mode. Statists will hide behind "capitalism" when it suits their purposes as a milk cow for inflated government. This has been the case in recent years. But as has been noted often on this sterling ( and golden ) forum, a true unfettered and unmanipulated market does not exist. And here I am not talking about private groups, who have every right to buy or sell how and what they wish, but government which does so with confiscated funds and at the point of a gun. It is clear, especially with people like Soros talking about "the failure of Capitalism, " that there are no publicly visible defenders of true Capitalism today, save, perhaps, the Libertarians. They hardly represent the texture of American thought. In a nation which in any way can stomach Bill Clinton as their president, and the commander in chief of their children in uniform, it is obvious that the current financial problems, the result of chronic state intervention in markets and credit systems, will be the justification for a fresh era of fascism and collectism that, with contemporary communications and surveillance controls, will make the 1960 - 1980 period look like Laissez Faire Capitalism in comparison.

This will, of course, be wildly bullish for gold. Over a thousand by 2003!
Get Real...Get Gold.

When Abbey Cohen suggests that taking a slightly more defensive stance might not be too bad an idea during this time of temporary minor market fluctuations.

The market thinks it discounted the Coke news, but the Coke news will be worse than the market expects. This will imply that Gillette and other supposedly risk/dividend sure-things for the entire duration of this bull market with P/E's 10 to 20 times growth rates are equally at risk. The market swallowed the hedge fund news last night and woke up this a.m. with bad indigestion, peeking over a systemic risk precipice with no level ground in sight.

If no more new bad news: DOW down 200 - 300
If more bad news: DOW down 500+

Either way, gold closes over 300.

Gollum: Got physical in possession. Youbetcha.

-EJ

I notice that the notes, comments and articles per day about Y2K is way down. Is that significant?

The McLellan Summation index did go low enough in early September for a potential bottom. But, new lows in New York, on the rebound are over the benchmark 75 issues every day. This is not healthy. For a bottom to be in place they should dry up. ( This is happening on the gold front by the way )

About 6 months ago G. estimated Gold shorts at 8000 tonnes, much of it over the counter. I would think that this figure could have easily grown by 50%.
This is the engine that will power the next Gold rally. Also Joe public is beginning to get involved, and the Gold lineups will start soon.
Maybe we'll find Abbey Cohen in such......

I suspect some big short fund postions in XAU stocks exist. I notice that along about 9:00 or so ( about a half hour before the equity market opens in NY ) there is an attempt to push metal prices down. Once the market opens they are given free rein again.

I'm an astrologer, not a fortuneteller, so you are absolutely right that ANYTHING can happen. There are still some problems with the "all asset rising" scenario, but it could be coming now if this is not to be an out and out "total collapse" ( with apologies to Steve Puetz ) deflation. I am one who believes the deflation hath occured. The entire world is now fiat-based. This is the FIRST 60 year Konratieff deflation cycle in which this is so. The remedy for everything has been, and will continue to be, unfettered expansion of a credit and money base that is not backed by any commodity money ( specie - gold or silver, or even peanuts for that matter! ) . This is chronic INFLATION. Period. There is no other definition. It has nothing to do with rising prices, that comes later. The banks that are being called upon to bail out the first casualty of this mess are the same banks that got their seed capital for this bull market in the Green-span of the early 1990's recession. They buy treasuries, bonds go up, interest rates go down, the treasuries are reserve assets upon which further credit may be created and drawn, the credit goes to the faltering business of choice, misallocation of capital continues, ad infinitum. Nothing has changed.

Getting back to stocks, though, after a period of benign attention with perhaps a lower interest rate, we will see the market reassert itself in relation to credit risk, and bonds will top out, stocks & gold will be rising, and interest rates will begin to climb. Then stocks will go down for the count and gold will be king once more. 2003-2005 you will be very happy you bought those shiny little coins and bars today. Clink clink.

Just had a thought...any one with hard answers, please respond.

Long Term Capital's bailout was/is being orchestrated by the FED although from what I can tell the FED is not dropping any money into the pot.

If LTC is short the number reported number of contracts ( or even half that amount ) , they need to cough up a lot of money or a lot of gold.

Would the FED cough up gold from reserves to bail these guys out ?

...got to run and make a living. Go Gold!

I'm sorry, lakshmi, I don't use eclipses. I work with simple, basic, planetary transits in corporate or contract horoscopes. I leave the eclipse stuff to others. There's just so much I can juggle these days.

When 'free markets' are used as a tool of control, as a means of manipulation without constraints, as a focal point for the strong to bully the weak, THESE FREE MARKETS SHALL NOT LONG ENDURE!

This Hobbesian "each against all" free trade is the very reason the American Revolution was fought.

Bob in DC

ps: GO GOLD!

On Y2K, there's nothing new to say about it. No news. In fact, I don't know that there will be any news until after Y2000 except media coverage of the the Y2K bears going to extreme lengths to avoid the consequences of the worst-case scenario. The rest is numbers and media events like the Wall Street Test, about which the public is suspicious and uninterested.

My friend who sells Y2K mainframe software is sticking to his predictions:
90% of mission critical systems fixed
50% of medium critical systems fixed
10% of non-critical systems fixed

He is becoming more pessimistic on the consequences of the failure of the 10% mission critical systems, tho.

-EJ

Scale of Fund's Bad Bets Begins to Emerge
Swiss Bank Reports $650 Million Loss; Work on Rescue
Effort Continues

By Steven Mufson and Ianthe Jeanne Dugan
Washington Post Staff Writers
Friday, September 25, 1998; Page A01

The magnitude of bad market bets placed by a huge private investment
fund began to emerge yesterday as Swiss banking giant UBS AG
announced that it lost $650 million in its dealings with the fund and Federal
Reserve officials asserted that the $3.5 billion rescue package put together
Wednesday was needed to head off disruptions to the world financial
system.

Fourteen of the world's biggest financial institutions continued yesterday to
negotiate details of the plan, designed to rein in the management and stem
losses at Greenwich, Conn.-based Long-Term Capital Management L.P.,
one of the most aggressive and highflying of the so-called hedge funds,
which use borrowed money to wager on movements in currency, bond and
stock markets around the globe.

One banker involved in the talks Wednesday said that many of the banks
and investment houses had agreed to inject new money into the fund only
after the Federal Reserve Bank of New York officials had warned a group
of 16 senior Wall Street officials that failure to aid the fund would result in
"chaos" in financial markets and damage economic growth worldwide.

The banker said the New York Fed officials were concerned not only
about the prospect of losses to institutions that had entered into contracts
with Long-Term Capital but also at the prospect of a "domino effect" if the
sell-off of about $100 billion in market bets placed by Long-Term Capital
triggered financial distress at other institutions.

Though the imminent collapse of Long-Term Capital was averted, world
markets shuddered in response to news of the costly package and to the
possibility of further losses for major banks. In trading yesterday, bank
stocks led a drop of 152.42 points, or 1.9 percent, in the Dow Jones
industrial average, which closed at 8001.99, and the dollar fell against the
yen over concerns that currencies would be affected by the sell-off of
Long-Term Capital's holdings.

In an all-day meeting Wednesday with 16 banks and investment houses
held at the New York Fed's offices in lower Manhattan, central bank
officials provided constant servings of petits fours, coffee and warnings
about the risks to the financial system, according to one banker present.
But some Wall Street and financial officials questioned the unusual role of
the New York Fed in organizing assistance for an unregulated private
investment fund.

"Why should the weight of the federal government be brought to bear to
help out a private investor?" former Federal Reserve chairman Paul A.
Volcker said during a meeting in Boston. "It's not a bank."

At one point Wednesday, when talks slowed and one participant
wondered aloud whether the banks were simply putting "good money after
bad," central bank officials said that without a rescue plan the banks' own
capital base would eventually be put in jeopardy. "The central bank
officials' role was active," said one banker who was present.

"This is the rewriting of the too-big-to-fail doctrine right here," said Roger
C. Altman, a former deputy treasury secretary who is now with Evercore
Parnters in Manhattan. That doctrine holds that a handful of institutions --
such as Citicorp -- can never be allowed to fail because the entire financial
system would collapse. While conceding that the collapse of Long-Term
Capital would have had "bad implications," Altman said: "We all had the
sense that the doctrine applied to relatively few financial institutions. Few
people would imagine it applied to a hedge fund."

Others questioned whether the attention paid to Long-Term Capital was a
result of the firm's good connections. Its managers include famed bond
trader John Meriwether, two Nobel laureates in economics and David
Mullins, former senior Treasury official and former vice governor of the
Federal Reserve Board in Washington.

A spokesman for the New York Fed said the size of Long-Term Capital's
problems justified the New York Fed's involvement. "These huge numbers
are outlandish beyond what anyone could have imagined," he said,
referring to the scope of Long-Term Capital's role in international markets
ranging from trading in Japanese yen, British pounds and Danish mortgages
to U.S. Treasury bills, American stock options, and German, Russian and
Brazilian bonds.

The New York Fed spokesman also noted that the rescue package for
Long-Term Capital was put together with private investors. "They are
putting private money at risk," he said. "There is no taxpayer exposure. . . .
Nowhere does it get written that it is protected by the government."

Bankers involved in the Long-Term Capital talks said their goal was to
inject enough capital into the fund to convince markets that it wouldn't be
forced into a fire sale of its holdings to meet minimum collateral
requirements by its creditors. In some markets, Long-Term Capital was
such a huge participant that it simply couldn't find buyers for its holdings at
any price. Traders of mortgage-backed securities said that yesterday there
was already an easing of selling pressure as a result of Long-Term Capital
gaining more time to unravel its holdings.

One banker compared Long-Term Capital to a poker player. Its hand
wasn't bad, but he said that in order to be a big poker player in Las Vegas,
"you're only as good as your stack" of chips. The new money injected
Wednesday will give Long-Term Capital more time to play out its hand
and wait for the most opportune moment to unwind its holdings.

Nonetheless, bankers and investment houses were stunned at the size of
Long-Term Capital's holdings. Many of them thought they were the largest
counterparty, or trading partner, for the Connecticut firm, and were
surprised to find that there were more than a dozen other institutions
holding the other end of similarly big contracts with the firm.

"There was a feeling that Long-Term Capital was not disclosing enough
information to its counterparties," one banker present at Wednesday's
meeting said.

Many of the banks and investment houses at the New York Fed had
placed similar bets on world financial markets, bets that went badly wrong
especially after the Aug. 17 Russian default of ruble-denominated debts led
to a flight from emerging markets and after the Aug. 31 plunge in U.S.
stock markets. But unlike Long-Term Capital Management, the banks and
investment houses had bigger capital bases and other sources of income,
such as brokerage fees or other long-term loans.

"All Meriwether had was a gym and a trading room," said one banker.

Meriwether, the head of Long-Term Capital, had previously enjoyed a
good reputation in the business of bond trading and hedge funds.

Nonetheless, Meriwether came in for heavy criticism at Wednesday's
meeting from chief executives, many of whom wanted him ousted
immediately from the firm.

Today, the consortium of banks is expected to announce an agreement
under which Meriwether and his management team continue to run the
corporation, but under the close scrutiny of an "operating committee,"
which includes one representative from each bank, according to a source
close to the talks.

An oversight committee -- consisting of one representative from each of
the five banks leading the negotiations, Merrill Lynch, Morgan Stanley,
UBS, Travelers and Goldman -- will work full time at Long-Term Capital's
Greenwich headquarters and have authority over investment strategies,
capital structure, risk management, compensation, hiring and firing.

They will report regularly to a separate board consisting of representatives
from each of the 14 banks, of which UBS was the biggest creditor. Eleven
banks contributed $300 million apiece. Three banks contributed a total of
$300 million. Two institutions, including Wall Street giant Bear Stearns,
refused to participate in the rescue plan.

good article...thanks! interesting that Bear Stearns did not participate in bail out. smart.

I agree. I also don't think secret markets are free markets.

Site?

Thanks,


HB

Speculators betting turmoil will boost gold Increase in demand seen as investors look for safety Friday, September 25, 1998
ALLAN ROBINSON Mining Reporter Speculators in gold are detecting a whiff of danger in the global financial markets and betting the turmoil will translate into dramatically higher bullion prices.
The price of gold rose $4.20 ( U.S. ) an ounce yesterday to $293.80, and is up $19.20 from its 19-year low of $274.60 in late August.
Analysts say the metal will jump as investors look for safe places to put their money. As well, institutional investors will want to add to their holdings of the metal at a time when it is doing relatively better than many other slumping investments.
They expect that a weaker U.S. dollar, international currency turmoil and financial problems faced by international hedge funds will all combine to help trigger a boost in gold prices.
"I think [the U.S. Federal Reserve] is scared stiff," said Ian McAvity, author of Deliberations on World Markets, a Toronto-based newsletter. "They are absolutely terrified."
Federal Reserve Board chairman Alan Greenspan has already telegraphed to the markets the possibility of lower interest rates. And this week it was disclosed that the New York Federal Reserve, one of 12 regional banks in the United States, has been orchestrating the $3.5-billion bailout of Greenwich, Conn.-based Long Term Capital Management LP, a blue-chip hedge fund on the brink of insolvency with its $80-billion bond position.
Long Term Capital was run by John Meriwether, the former vice-chairman of Salomon Brothers and a legendary bond trader, along with two Nobel Prize winners -- Myron Scholes, who designed a model for pricing options, and Robert Merton, a laureate in economics.
The fund made complicated trades in the international bond markets. Reports indicate Long Term Capital was badly hurt by the Russian debacle and soaring U.S. Treasury bond prices, which the fund had hedged against non-Treasury bonds.
"These are smart guys and that's only one fund," Mr. McAvity said. "I think the whole hedge fund scene is coming apart at the seams. A number of hedge funds are in voluntary liquidation."
For gold bugs and mining companies, the hedge funds have long been viewed as ogres for shorting the metal. Mr. McAvity and others are now looking for the hedge funds to start covering their short positions.
Short selling of gold involves selling the commodity ( after borrowing it from central banks at a modest cost ) in the expectation it can be repurchased at lower prices and replaced.
As recently as two weeks ago, short positions in the metal were at record levels, said George Milling-Stanley, manager of gold market analysis for the World Gold Council in New York. The hedge funds have been shorting gold for almost two years, he said.
A reduction in U.S. interest rates and the expected lower dollar would have the initial effect of decreasing the prices of depressed commodities such as gold, base metals and oil because they are priced in the U.S. currency. However, over time the resultant increase in demand would spur higher commodity prices around the world.
As well, there are early signs that the yen is rising against the U.S. dollar even as the Japanese stock market teeters. The Japanese will be selling U.S. dollars and buying yen to help solve their own domestic financial problems, Mr. McAvity said.
"I think this is the first leg of a three- or four-leg bear market," Mr. McAvity said of the most recent slump in North American share prices.
The TSE gold and precious metals index rose 353.12 points or 5.8 per cent yesterday to close at 6,441.63. Shares of gold producers Barrick Gold Corp. gained $1.80 ( Canadian ) to $30.70, Euro-Nevada Mining Corp. Ltd. climbed $1.75 to $24 and Placer Dome Inc. added $1.15 to $21.25.
In this unsettled environment -- in which there is a lack of leadership in the United States, Japan and Germany to deal with the problems -- there will be a rush to gold, said John Ing, the president of Maison Placements Inc. "When currencies do not have a value, historically that is when gold raises its head as a benchmark," he said, adding that a weaker U.S. dollar will lead Americans to buy the metal.

oversight board of five is comprised of three BIG gold shorters....Merrill, Goldman and UBS. HuH? Get yo' money outta' these houses...theysa goin' down.

I played gold in the commodities markets back in 80-81,and after it hit bottom and started to turn up, it backed and filled for a day or to anfd then went limit ( $25 ) up . We could see a limit up day today.

Thanks Frail WOW!! $100 Billon is staggering thats about half the US trade deficit for the year . You can bet LTC has plenty of company too.

glenn says 255 before 300........

http://www.digisys.net/futures/chart/ts_cha22.gif

and with gusto.....blew the foam off........found
a cup-full of bs........

what has the sentiment been?
how long has this sentiment pervaded?
WHO has this sentiment?

the same ones who said crude oil was going to $8bbl....
peopleo..........glenn has told us WHY gold is going to
255oz.......

HE IS HEAVILY SHORT........with all his buddies....
when in rome shoot roman candles....and glenn is shooting
like mad...i would be posting EVERYWHERE too...trying
to influence sentiment, as he is doing here.

we are always looking for the 'edge' so to speak, in
trading futures...to have the voice of a floor trader
as another round of ammunition is welcome...
however, consider carefully what he said and why....

my bets are against the sure thing.....pog way above 255......

gee whizzzzzz, glenn.....check out the next url...what
do you 'see' grasshopper? hot damn........pog where?

yar by gar.......you can take the herd to the kraal.....
and almost ALL will enter....even with the grim reaper as
the hostess in drag!

cherokee!;..buying.gold.and.crude.calls.....afap!

I have a feeling that these are names involved in a kind of collusion to artifically drive gold prices down while profitting from massive short postions. Of course, this is only a feeling, not even an opinion.

You don't hve to look too far into the names of shareholders to see some very big and very european names.

hot damn glenn....

http://www.bmiquotes.com/cgi-bin/htx.exe/dbcfiles/curcommt.html?source=core/bmi

lookin.like.300+.to.me..........right.eb?

why.oh.why....is crude oil starting to fly?

WAR!....good god ya'll.... what is it good for?
absolutley nothing....$$$$$$
say it again now......WAR!

cherokee!;..listening.to.war........harmonious.discourse...eh?...

hot damn glenn....

http://www.bmiquotes.com/cgi-bin/htx.exe/dbcfiles/curcommt.html?source=core/bmi

lookin.like.300+.to.me..........right.eb?

why.oh.why....is crude oil starting to fly?

WAR!....good god ya'll.... what is it good for?
absolutley nothing....$$$$$$
say it again now......WAR!

cherokee!;..listening.to.war....from.afar........

"The Under-Standing of Eclipses" ( Sorry, I've forgotten the author's name ) is a book published about a decade ago. It contains a wonderful 6-page chart of all the eclipses from 1900 through 2026. Each year is on one line with the full moons represented by a dot. Each linar and solar eclipse is represented by a circle showing the exact shadow/light pattern that will be formed by the eclipse. With each year on a new line under the prior year, you can clearly see the earlier and earlier occurrence of the eclipse pairs or trios through time, in a regular receding diagonal across the page. I can no longer find this book in our library, but I have a photocopy of the eclipse charts for reference. Best I've seen.

Limit UP!! Give me a break. That would be real tough.
On COMEX Limit up is a $75.00 move in Gold and the they only close trading for 15 minutes. THAT'S IT! Then they open up again and let the metal go another $75.00. The book I have does not say what happens if it goes up again ( $150.00/day ) limit up. So the first $75 is only a curcuit break and a true limit up is $150.00. So for all of thous who think gold will hit $445 today you can all go and buy Nov98 $400 calls and I will be happy to sell them to you!

I NEVER said that gold would hit 255 before 300. I said it would hit 250 before 340!

DOW to open down 100 to 130. Up later in the a.m. Close down 200 if no new unexpected bad earnings news on blue chips or new hedge fund revelations, down 500+ otherwise. That's my guess.
-EJ

I have a buy stop in the dec SnP at 1050, would reverse and go long if the market trades under 1015 by 10 am cst. Short dec gold at 302 stop 305, if gold closes up here it would put it out of the weekly down channel and signal an end to the intermediate down trend.

yes, indeedO to your 8:56's!!!!!! Japanese BANKS could make a killin' right now by going big time LONG on the gold futures!!! watch 'em...they got their round eye competitors right where they want 'em. Off to the office to pump oil ( not too much! ) and almost break even. Good DayO!!!!! to all GOLDBUGS!!!!

Bear Stearns' non-participation may have been the correct move, but a
thank you letter is in order to the dirtied dozen.

If we can keep it alive by SHORT POSTS...eh...

To keep the site updating, please switch to short text mode in the "Viewing Options" box at the top of this frame. Thanks. Go Gold!

From the International Swaps and Derivatives Association web site, "financial risk
amounts to a samll fraction of the notional principal, typically from around 2% on
gross to 1% on net, based on ISDA studies of replacement value. Therefore, if the
notional principal of interest rate and currency swaps is around $28.176 trillion,
the financial risk associated with just interest rate and currency swaps is $281.76 -
$563.52 billion. For comparison purposes, Long Term Capital is receiving an
infusion of only $3.5 billion. And remember, the ISDA isn't even reporting the
notional principal of equity and commodity swaps.

CC, thanks for the post. You make a good argument but I dont agree with you. You imply RANDGOLD has high costs. This has been true in that past as they work to implement their 3-year planned upgrade to SYAMA, and deal with the occasional glitch will bringing millions of dollars of new equipment on line, but their cost of production at SYAMA was down to $277 by June ( per Kebble ) . While this may be somewhat high, it is already well below Durbans cost. RANGY states they are on track with SYAMA II for November of THIS YEAR, bringing down costs to $210, and increasing production to a target of 270,000 ounces. They certainly have confidence in this number otherwise they wouldnt be stating it so often publicly, and Id also add that the SYAMA II upgrade itself is some 7 months ahead of schedule. What if it actually took them an additional 7 months to get costs from $277 down near $210? ( Not a big deal in my eyes ) I highly doubt they are significantly off on this target, but even if they are and they only get costs down another $27 to $250, would this be the end of RANDGOLD? NO WAY. You could consider saying good-bye to many other SA mines though, if you are talking about many years at $250, which I doubt will happen.

THE WHOLE POINT to RANGY is divesting from high cost mines and branching out into cheap surface mining. You cant really expect me to label SYAMA HEAP LEACH, scheduled to produce AT LEAST 200,000 ounces at $130 as HIGH COST? They continue to add to their OXIDE RESERVES as well. LOULO now has over 500,000 ounces of oxides, with current drilling expected to significantly increase this figure.

Then there is the KING of the portfolio ( IMO ) , newly discovered MORILA. Id venture to guess that 99% of investors have SO FAR failed to notice what is developing here. Scheduled for production in 2000, theyve already fast-tracked the project due to the stunning pre-feasibility study that was recently conducted. Somewhere in the neighborhood of 240,000 ounces a year, with cash costs of $118 !! THIS ENTIRE MINE WILL PAY FOR ITSELF IN UNDER A YEAR AND A HALF. If gold does drop to $250 and stay there, RANDGOLD WILL BE ONE OF THE FEW COMPANIES STILL MAKING A PROFIT. I just cant buy your comment that RR can go belly up if gold make a prolonged detour below $250.

http://www.geocities.com/~polarbear47/slideframe.htm
Please click on MORILA and check the facts. Ive recently expanded the MORILA section with information that came directly from RANGY management.

If RANGY were still solely in S.A. doing deep mining, Id agree. Thanks for the post CCIm always looking to hear other opinions. PB

XAU 4 minutes ago ( est due to laaaag time ) was at 76.95 +2.26 and rising.
GO GOLD and DROOY!

Good luck to all our fellow Kitcoites, it looks like it is here. Where is Rhody, can the rise in the 1 month Gold lease rate be confirmed?

Gold is finally on the move.

Thank you Canadians for a pleasant trip to Toronto on Tuesday. Wife and I drove from Western N.Y. to Toronto via the QEW to see the Blue Jays play in Skydome. One pleasant surprise were the more courteous drivers evident as soon as we crossed the border.

I have NEVER seen a discussion of Anglogold ( AU ) on this site. Is there a reason?
Thanks

Tom

The equity markets started out down, but not too badly and it looks like they may come roaring back by this afternoon.

XAU stocks opened gapped up, and will likely drop by this afternoon. Bonds are up or at least not down. Which means no real panic.

I have my doubts spot gold will reach 300, and if it doesn't...
Well, it won't be pretty.

Silver is looking pretty weak. If gold slips, silver will drop like a rock.

Maybe some more bad news will come in, but if it doesn't....

Well, don't be afraid to take some profits.

I won't be able to monitor things this morning and afternoon since I have some errands to run. So keep things together till I get back.

And don't wreck the place, ok?

With the XAU up more than 50% from its August lows, the new bull
market chapter in gold is just beginning.

My Sept. 4th & 5th kitco posts ( re-copied below )
identified that time as the "ignition" stage,
of this new bull market --

"...the horses are out the starting gate..."

"...the market in gold... is improving, and will become brisk
as autumn unfolds..."

The "sunami tidal-wave" that will hit US shores - that I
referred to in my 9/4/98 post, is going to be an
investment & financial & MONETARY panic.

Hints of this, are beginning to become apparent with
the hedge fund & derivates debacle; but we've only seen
the tip of the iceberg, in this unfolding, unstoppable crisis.

Growing fear is the seed-bed for the coming
collapse of confidence, in both Europe and the U.S. --
paper currencies & artificial credit are about to be totally
repudiated, and ultimately replaced, over the next few years.

It is simply the natural order of things.....returning.
For every action, there is an opposite and equal reaction.

Mirroring the world-wide meltdown in paper money
& imploding debt,
is the newly born bull market in gold.

When the dust settles in this collapsing, inverted pyramid
of paper monies, and defaulting debt,
and make-believe derivative schemes,
the world-economy will dig in the rubble
of its own ashes of folly and excess,
and it will find gold.

And the freedom-loving nations of the world will agree to a new international monetary sytem which all races, ethnic groups,
and ideologies ..... will willingly trust and use:
an international money & credit system backed by,
and convertible to
gold.

Sincerely,
David Blair Macrory
goldfever@k-online.com



Date: Sat Sep 05 1998 20:00
goldfevr ( Economic Winter........and the warming trend of gold. )
ID#434108:
Copyright  1998 goldfevr/Kitco Inc. All rights reserved
Sept. 3rd & 4th's accelerating share prices in mining stocks,
on 3 to 5 times average daily volume, set's the stage.....
the fuse is lit....
the horses are out of the starting gate....
( for real.....this time......no more false starts )

hold on for the ride,
it's gonna be one hel-of-a race.

Date: Fri Sep 04 1998 11:07
goldfevr ( 'Economic Winter' - approaching.... ) ID#434108:
Copyright  1998 goldfevr/Kitco Inc. All rights reserved
The market in "golden overcoats" ... is improving.....
and will become 'brisk'....
as autumn unfolds.
...................................

deja vu --
from 9/27/97, kitco post:

"When the tent collapses,
it will not be the center-post that goes first;
but the side-posts ...
and even the stakes."
............................................

for another perspective:

The 'Titanic' IS sinking ....
no matter the wishful thinking and the denial
of the blind leading the blind...
( as they mostly ignore the 'golden overcoats' & the
'gold-lifeboats' )

Pride goeth before the fall... --
'Just how long did civilization,
believe it could get away with it:
creating a global economy....
based on paper currencies & artificial credit
created by the trillions...... out of thin-air?'

"It is not nice to fool mother-nature"....
especially when it takes the form of --
'mass-counterfeiting'....
by the international collective of
political & financial "leaders & experts",
and their corrupted institutions.

A few 'gold-lifeboats' ...
are beginning to be set-out ... upon -
the stormy, trecherous, world-wide seas of:

red-ink,
crashing-currencies, and
imploding-debt....

but by only by a few, informed, hearty, freedom-loving,
visionary souls.

Meanwhile, a few of them have reported that -
'a sunami - tidal-wave'
is approaching U.S. shores.

With the XAU up more than 50% from its August lows, the new bull
market chapter in gold is just beginning.

My Sept. 4th & 5th kitco posts ( re-copied below )
identified that time as the "ignition" stage,
of this new bull market --

"...the horses are out the starting gate..."

"...the market in gold... is improving, and will become brisk
as autumn unfolds..."

The "sunami tidal-wave" that will hit US shores - that I
referred to in my 9/4/98 post, is going to be an
investment & financial & MONETARY panic.

Hints of this, are beginning to become apparent with
the hedge fund & derivates debacle; but we've only seen
the tip of the iceberg, in this unfolding, unstoppable crisis.

Growing fear is the seed-bed for the coming
collapse of confidence, in both Europe and the U.S. --
paper currencies & artificial credit are about to be totally
repudiated, and ultimately replaced, over the next few years.

It is simply the natural order of things.....returning.
For every action, there is an opposite and equal reaction.

Mirroring the world-wide meltdown in paper money
& imploding debt,
is the newly born bull market in gold.

When the dust settles in this collapsing, inverted pyramid
of paper monies, and defaulting debt,
and make-believe derivative schemes,
the world-economy will dig in the rubble
of its own ashes of folly and excess,
and it will find gold.

And the freedom-loving nations of the world will agree to a new international monetary sytem which all races, ethnic groups,
and ideologies ..... will willingly trust and use:
an international money & credit system backed by,
and convertible to
gold.

Sincerely,
David Blair Macrory
goldfever@k-online.com



Date: Sat Sep 05 1998 20:00
goldfevr ( Economic Winter........and the warming trend of gold. )
ID#434108:
Copyright  1998 goldfevr/Kitco Inc. All rights reserved
Sept. 3rd & 4th's accelerating share prices in mining stocks,
on 3 to 5 times average daily volume, set's the stage.....
the fuse is lit....
the horses are out of the starting gate....
( for real.....this time......no more false starts )

hold on for the ride,
it's gonna be one hel-of-a race.

Date: Fri Sep 04 1998 11:07
goldfevr ( 'Economic Winter' - approaching.... ) ID#434108:
Copyright  1998 goldfevr/Kitco Inc. All rights reserved
The market in "golden overcoats" ... is improving.....
and will become 'brisk'....
as autumn unfolds.
...................................

deja vu --
from 9/27/97, kitco post:

"When the tent collapses,
it will not be the center-post that goes first;
but the side-posts ...
and even the stakes."
............................................

for another perspective:

The 'Titanic' IS sinking ....
no matter the wishful thinking and the denial
of the blind leading the blind...
( as they mostly ignore the 'golden overcoats' & the
'gold-lifeboats' )

Pride goeth before the fall... --
'Just how long did civilization,
believe it could get away with it:
creating a global economy....
based on paper currencies & artificial credit
created by the trillions...... out of thin-air?'

"It is not nice to fool mother-nature"....
especially when it takes the form of --
'mass-counterfeiting'....
by the international collective of
political & financial "leaders & experts",
and their corrupted institutions.

A few 'gold-lifeboats' ...
are beginning to be set-out ... upon -
the stormy, trecherous, world-wide seas of:

red-ink,
crashing-currencies, and
imploding-debt....

but by only by a few, informed, hearty, freedom-loving,
visionary souls.

Meanwhile, a few of them have reported that -
'a sunami - tidal-wave'
is approaching U.S. shores.

Can you Jog the frames please...tia

I did so well yesterday that I'll put my head on the guillotine again today. What a fool! Closing PM today:
Gold 303.30
Silver 5.34
Remember: "All you need to do is Ask, Look, Listen, and TRUST." The latter is hard to do after the beatings we have taken.

Thanks, yes we Canadians are a kinder, gentler, yet exceedingly more complacent, dubmer race of people. Why else is the unemployment rate double that of the U.S., our currency is crumbling, and capital and the brightest minds in the country are fleeing in sheer panic ( to the U.S. ) - because we allow our government to suck at least double out of our economy than our good friends to the south allow their government to. Yes I am proud to be Canadian and only wish we could borrow some fiscal smarts from America.

Someday, I predict our govenment will begin attempting to tax assets, in a last desperate attempt to shut down the economy - and they will succeed. Why can't we learn from our neighboors that government intervention and crushing tax levels hurt everybody more than they help?

FT 9/25/98

( 1 ) Tantalus @9:18-LTCM "after a period of stabilisation it will seek to raise more than 1.2bn and possibly up to 3bn from new investors." One banker said,"Has this guy got any shame? He brings us all to the brink with his black box nonsense and then has the balls to say we did it to keep him in work. That guy is toast."
( 2 ) Court freezes 113m in Russian banks-Lehman won a UK court order
( 3 ) "Rogue traders" cost Dresdner Bank big losses in Russian GKO position

Friday, September 25, 1998 Bailout of Hedge Fund for Wealthy Rattles Wall Street
Economy: The rescue involves private funds but was overseen by the Fed. Many see it as dangerous precedent. The rescue was attacked as a bailout for rich investors, a privilege that would never be accorded to the vast majority of smaller investors. And it was viewed as likely to embolden other big-time speculators to continue their high-risk ventures, confident that they will in the end be protected from failure.
By TOM PETRUNO, Times Staff Writer
http://www.latimes.com/HOME/NEWS/BUSINESS/t000087329.html

holding around 5.19 to 5.22 range. Dec S&P can't seem to work it's
way over 1054. Hmmmmm. Is it possible that these futures are retracing
somewhat this morning, and will continue in the direction they started ( in overnight hours ) this afternoon? Fox-man

with this spike in the price of Gold. You can be sure that there will be another "ill-timed" announcement of yet another central bank Gold sale soon... if only to allow the blood-sucking hedge funds to cover/change their sh*t-stained shorts in an orderly fashion.

Bart ,Thank you.
Mike, thank you for the kind thoughts, you are right I didnt owe the putz anything, but you know me I wont lay down for crap from any of them. I am leaving tonight for Garmisch, when I get established over there I will contact you for your snail mail and send you a few of the better ones.

All, I will be offline for a few weeks keep up the good fight against the schnooks and schmucks. To the one of my friends who disagreed yesterday, it did work apparantly so it was worth it. SHALOM to all I will return . Jere Smith

I think they're hanging there waiting for new money. If they don't get in the next hour, they will retrace.

"One-month lease rates, as implied by the London Bullion Markets Association, increased 130 basis points overnight to 1.70 percent."

I hope you are right, but I pick 294 and 5.17

geeeeeeeewhizzzzzzzzzzz
david.mccrory..........

at least let REALisTIC post it for you!!
he has needs too!!

glenn...how can you post to kitco AND
pound the floor of comex during trading
hrs...?? got a cape tambien?

is this the start of the promised bull? yes?

Golds dip this morning could be profit taking after the run, but given the fact that most technicians still regard golds upward resistance to be at around $303 ( see Ralph Acamporas view that gold must break through this figure to end downward momentum ) , it is not a good sign that the price this morning met a sell-off close to $301. I believe the rest of the day will measure the seriousness of that upward resistance.

http://cbs.marketwatch.com/news/current/futures.htx?source=htx/http2_mw

Gold market eyes day of reckoning for fund shorts

By Derek J. Caney

NEW YORK, Sept 25 ( Reuters ) - U.S. gold traders are viewing the recent rally in gold prices driven by hedge funds covering their short positions at a time when central banks are looking to restrict gold supply in the market.

Gold prices are trading at their highest level in more than 12 weeks, with many analysts believing that gold is being reconsidered as a safe haven amid concerns about the economies of Japan, Russia and Latin America, as manifest in the recent vulnerabilities in the currency and worldwide equities markets.

Against this backdrop, highly leveraged hedge funds are now believed to be fearful of being on the wrong side of the market.

Traders and analysts spoke of a day of reckoning for the funds that borrowed gold from dealers to execute short positions earlier in the year. Such dealers will, in turn, borrow gold from central banks. With the recent downturn in the economies around the world, central banks are believed to want the gold that they lent back in their reserves.

One-month lease rates, as implied by the London Bullion Markets Association, increased 130 basis points overnight to 1.70 percent. Lease rates are the cost of borrowing gold from central banks and are often used as a barometer of physical tightness in the gold market.

`` ( Hedge funds ) borrowed gold to short the market earlier in the year because it was one of the cheapest sources of money around,'' said Ian MacDonald, executive vice president of MKS Finance USA. ``But now the central banks are concerned over the ( worldwide ) financial situation and they want that gold back in their reserves.''

Meanwhile, many hedge funds are lining up to declare losses they've sustained in Russia and other markets and are believed to be increasingly short of cash to buy back their positions. ``They're in a double whammy because they don't have the money to buy the gold back and they will be forced to cover in a market that's moving against them.''

Dinsa Mehta, managing director for Chase Manhattan Bank, agreed that the central banks were beginning to constrict gold supply.

``The central banks around the world are beginning to exercise some caution regarding their gold reserves,'' he said. ``There was a mindset in which gold was considered just another asset to be lent to the market as opportunities arise. But that seems to be changing in light of the weakening economic situation.''

Gold bullion for London delivery has spent the last 10 months trading between $270.75 and $314.40 an ounce after falling from the February 1996 high of $417.70 an ounce.

Could this situation reverse the trend? ``It's a little early to tell,'' one bullion trader said. ``We need to see some evidence of fresh buying in the market before we're convinced this is a reversal.''

Gold market eyes day of reckoning for fund shorts
By Derek J. Caney

NEW YORK, Sept 25 ( Reuters ) - U.S. gold traders are viewing the recent rally in gold prices driven by hedge funds covering their short positions at a time when central banks are looking to restrict gold supply in the market.

Gold prices are trading at their highest level in more than 12 weeks, with many analysts believing that gold is being reconsidered as a safe haven amid concerns about the economies of Japan, Russia and Latin America, as manifest in the recent vulnerabilities in the currency and worldwide equities markets.

Against this backdrop, highly leveraged hedge funds are now believed to be fearful of being on the wrong side of the market.

Traders and analysts spoke of a day of reckoning for the funds that borrowed gold from dealers to execute short positions earlier in the year. Such dealers will, in turn, borrow gold from central banks. With the recent downturn in the economies around the world, central banks are believed to want the gold that they lent back in their reserves.

One-month lease rates, as implied by the London Bullion Markets Association, increased 130 basis points overnight to 1.70 percent. Lease rates are the cost of borrowing gold from central banks and are often used as a barometer of physical tightness in the gold market.

`` ( Hedge funds ) borrowed gold to short the market earlier in the year because it was one of the cheapest sources of money around,'' said Ian MacDonald, executive vice president of MKS Finance USA. ``But now the central banks are concerned over the ( worldwide ) financial situation and they want that gold back in their reserves.''

Meanwhile, many hedge funds are lining up to declare losses they've sustained in Russia and other markets and are believed to be increasingly short of cash to buy back their positions. ``They're in a double whammy because they don't have the money to buy the gold back and they will be forced to cover in a market that's moving against them.''

Dinsa Mehta, managing director for Chase Manhattan Bank, agreed that the central banks were beginning to constrict gold supply.

``The central banks around the world are beginning to exercise some caution regarding their gold reserves,'' he said. ``There was a mindset in which gold was considered just another asset to be lent to the market as opportunities arise. But that seems to be changing in light of the weakening economic situation.''

Gold bullion for London delivery has spent the last 10 months trading between $270.75 and $314.40 an ounce after falling from the February 1996 high of $417.70 an ounce.

Could this situation reverse the trend? ``It's a little early to tell,'' one bullion trader said. ``We need to see some evidence of fresh buying in the market before we're convinced this is a reversal.''

The lie machine will be out soon Feds,BOE UBS It would be wonderfull if the middle east moved in by the billion ~ i did ask yesterday if there wee any figs on Arabian Gulf states gold holdings but got no answer

go gold and stick with it Ignore the lies
cpo

That depends on what you mean by time...and rest can take on a different meaning depending on the context, what is rest after all? are you speaking present or past tense. When you think about like this you
begin to see things differently don't you.

That depends on what you mean by time...and rest can take on a different meaning depending on the context, what is rest after all? are you speaking present or past tense. When you think about like this you
begin to see things differently don't you.

.

Good one! I still love your comment: "This is too serious to be serious about. It's looks like the smoke and mirrors hiding the smoke and mirrors are starting to show. I read on another thread that Merrill Lynch has been messing with the books to coverup losses.

TRUSTED IN THIER GOLD!!! So they want to tighten on gold now, eh? Almost any comment now about "new CB sales" is pure hockey puck. Barbarick relic of the past indeed. CB's are soon to be the ancient barbarick relics, oh and they can take the codependant CG's with em.
Apologies, I just had to vent.
Nicodemus

TRUSTED IN THIER GOLD!!! So they want to tighten on gold now, eh? Almost any comment now about "new CB sales" is pure hockey puck. Barbarick relic of the past indeed. CB's are soon to be the ancient barbarick relics, oh and they can take the codependant CG's with em.
Apologies, I just had to vent.
Nicodemus

I can't see any Central Bank making an announcement now. There is too much uncertainty out there. I can't see how anyone would invest in any country that keeps selling gold at this point. The next announcement from some Central Bank would be more like "Ooooops, we made a mistake, sorry"

I have to agree!!

GET MERIWETHER!!! ( actually, I don't think we'll have to... )

``What we're looking at now is whether this is going to lead to other collapses,'' said Peter Cardillo, director of research at Westfalia Investments in New York. ``It's the end of the quarter, and people are already worried about earnings. It's not going to be a pleasant day.''

Haven't heard anything about the Islamic gold Dinar in a while. Anybody know what is going on with that?

depends on what you define as "things" and whether you are using "differently" in an abstract sense. Yes?

Tom

Now THAT IS a development few goldugs expected!!! CBs becoming goldbugs overnight.

It must be AWFULLY lonely on the SHORT side of the golden fence!!!

BOMBS AWAY!!! Desperate attempts to fill today's breakaway gap!!! "Hedge Fund" quickly becomming a dirt word!!! You mean to tell me gold actually DOES have intristic value?!

IT FEELS GOOOOOOOOOOD!!!

POG is being setup for a fall.

Or could this be that day-trader bear trap Gollum mentioned awhile back? .... Bob in DC.

Quote of the Day: ``It's the cockroach theory: There's never just one.'' Paul Migliorato, Jardine Fleming Securities

Nick@C-- BGS, Battered Goldbug Syndrome. You're too much, mate.

http://www.intersurf.com/~vor/golde.html

The Yahoo article says:

Meanwhile, many hedge funds are lining up to declare losses they've sustained in Russia and other markets and are believed to be increasingly short of cash to buy back their
positions. ``They're in a double whammy because they don't have the money to buy the gold back and they will be forced to cover in a market that's moving against them.''

What happens if these hedge funds go broke? I don't suppose banks can bail them all out. Will the banks tighten gold supply even more to bolster there reserve values or try to lower gold prices in an attempt to replace their gold at lower prices?

Already have Drooy and Newmont. All stystems are go. Fire when ready...

WorldBank has warned ITS SHAREHOLDERS that it may need a politically controversial capital increase if it is to continue providing emergency help to countries facing financial crises.
Possible options-- ( 1 ) member countries to contribute more capital and reserves [chances? Slim]
( 2 ) for shareholders to allow the Bank to operate with reserves relative to the size of its loan book. But as well as making it more likely that shareholders would be called upon to cover bad loans in the future, this could also make it more expensive for the Bank to BORROW in financial market...
( 3 ) another option would be to SELL parts of the Bank's loan portfolio.
( 4 ) create an off-balance sheet facility...[god knows there are a lot of THOSE around {:- ( (
WorldBank/IMF...bye-bye...start selling off the private jets & scale down the suites at George V [for starters]...

This gold is gone, for the banks to lower prices would only increase demand, and cause a scramble for physical making prices rise. I am wrong most of the time but I think this jig is about up. I sincerely hope that anyone now shorting gold will soon not have a pot to pee in.

My take on notveryLongterm Capital, it isn't very difficult
for knowledgeable insiders working the exchanges and monitoring
trading screens to discern who's putting on what kind of positions.
Given the legendary skills and eminent candlepower on board LTCM,
those positions and trading strategies were likely candidates for
emulation by other managers and funds.

Whether real or hoax-for those that have not been listening to Cdn National News broadcasts-Image of Christ appears on Tim Horton's Do-Nut
Shop. My skeptic wife just drove by and saw a clear image. Location
of our community-Bras D'or ( Arm of Gold ) , Cape Breton, Nova Scotia. Tim
Horton's now running their national ads after every newscast. Gud one
for Marshall to investigate. Beats Mother Teresa on a cinaman bun.

Just a wild guess ( not really ) but I believe LTCM and a few other "hedge" funds' positions have gotten rapidly worse over the course of the week...how many more losses will the banks stand?...Someone has got to have the balls to pull the plug on this and relieve some pressure...

those people over at UBS are getting stinky armpits and barfing under their consoles....WOW watch those derivatives unwind..."but, but honest gov. the equation said I would WIN ( not earn ) billions!"

I'm glad I stuck to real mathematics.

Isure said, and I quote..........."I sincerely hope that anyone now shorting gold will soon not have a pot to pee in."

yo comprendo, amigo. ;^ ) ~

Is it possible that AG wants to bail out LTC not to keep the bond market stable but to keep the creditors from reposessing the gold they loaned to LTC on the tacit agreement by AG that these guys were to big to fail. In other words we have a scandal that involves AG as the person who said these guys were ok to use for gold loans to manipulate the market and central banks used ltc for cheap gold loans. This deal smells bad at the highest levels.

Too much for one week, not nearly over but always a couple of knocks to get through something like 300. However the trend is your friend and enjoy the weekend. I have sold off some gains for the first time in a long time.

Question 1: At what price does the short covering begin in earnest?

Question 2: What could stall a rally?

A friend of mine, who is into a junior for over 100K, figures that if the rally is reasonably strong the producers will hold off until the rally softens before forward selling. However, if the rally is weak, they will forward sell as soon as they are comfortable with the price.

Going back to the hedge fund article, could the banks make gold available to keep prices lower to bail out the hedge funds - i.e let them cover?

Let's say that a global hedge fund ( "Global" ) borrows a 100 tons of gold from Germany's Bundesbank for one year, and pays Herr Tietmeyer 1.5% interest for the privilege. Global sells the gold on the LBMA for US$1B ( or about $318 per oz. -- a good price a year ago. ) Global purchases German eurodollar bonds with the pile of cash, with the euro-bonds yielding 5.75%. They deposit the bonds with a major German bank, let's say Deutsche Bank, with a request to issue a "guaranteed delivery certificate" in favor of the Bundesbank for 100 tons of gold. Deutsche Bank might charge Global 0.25% for the service, ( and may even buy some $320 gold calls for a year out ) but most likely not, since they like the increase in their asset base. The bank is likely "delay" the purchase of calls, since they know that Global is doing this deal with every central bank that has any gold left, and they are not too concerned that the price of gold will run away from them.

One year later, the deal is either unwound or renewed for another term. The bottom line is that Global has just made 4% net on the Bundesbank's reserves, using none of their own money! Now AE, $40M may not be a lot of money to you, but to this little fledgling hedge fund called Global, it is a nice chunk of change just for making a few phone calls.

What could go wrong? Once all the CBs are tapped out -- loaned out all the gold they can or care to -- what will keep the POG down? Once all the hedge funds start selling debt to make margin calls, the price of bonds will likely go to some very dark places. Just watch -- this is unfolding as we speak.

This racket works with borrowing Treasury bonds, selling them, and buying high-yielding emerging country debt, as well, as long as there is a meaningful interest rate differential.

If you run Global, and just borrowed all or most of the reserves of a country like Thailand or Malaysia, or Indonesia, and replaced it with a non-callable IOU, what is to keep you from making an extra billion or two buy shorting their currencies? After all, they have nothing to defend them with!

This is where we are. The hedge funds have gotten way too greedy, and the central bankers avaricious and stupid. This is an explosive combination. My reserves are represented by physical gold. My country should do no less.

the current hedge fund bail-out reminds me of the imf
'loan' to the mexican 'government'......
the rich and powerful taking care of the rich and
powerful....the masterful manipulation of WORDS
serves their purpose quite well...why not? they
are believed at each and every juncture....

peopleo wonder at the condition of the c$...what is
there to wonder about? look at the debt......the same
with mexico......mis-managed to the n'the degree....and
propped-up by lies and deciet...ie...mexico 'paying
off the loan early!' banking slick willies....

it does seem as though every conceivable chaotic and flux--able--heee.hee
event that could possibly occur.....
.....................................is fixing to occur....at the same ................................time.

went to wells fargo to wire ed & f man some geeters to buy more gold and
crude calls...i asked the supervisor making the transaction if she ever
invested in gold...she said only stocks picked by a fund manager...i countered with 'what about buy low, sell high? and the worldwide currency
and stock diaspora? and what about taking an extra-ordinary profit and
at least riding the storm with cash or ....maybe gold?'......she turned green! THEY DON'T KNOW!!!!!!!!!!!!!!!!!!!!! the peopleo have absolutely
no concept of self-preservation!!! they will feed the flies for many a moon.......

picked-up 4 dec '99 crude 2500 calls @ 20pts each......$200..
waiting for glenn to sell me some gold calls.....dodeedodeedodeedooooooo....oh glenn......glennnnnnn? ver.r.u?

cherokee!;..grabbing.the.winds.of.war.by.the.@ss.....gold-n-crude...yar.

If gov't's are willing to bail out hedge funds, I don't think that they would hesitate to sell gold as a part of thier assistance to the funds and to maintain "orderly" markets.

I think AG & RR are sending spam in the from of US $ to ever fat cat in a hedge fund

Cherokee,
How sound and reliable is E D & F MAN ?
Will they return 'geeters' on liquidated
gold & oil calls, going out a year or two?
And what about Solomon Smith Barney?

Are these guys "safe" because they're too big to fail ( TBTF ) ?

Sincerely,
David
goldfever@k-online.com

and the rest of the question is: Would you, over the weekend, wnat to be...........?

We will find out.

Tom

goldfvr...

as reliable as any pusher might be....
a paper pusher...

that's where the obvious comes into play david....
in order to survive...YOU HAD BETTER NOT DEPEND
UPON ANYBODY FOR ANYTHING!.....that's it.
it is coming...got it? better get it! physical.....
it's the only sure thing....nothing wrong with
feeding the children of the sellers of gold-n-crude....

Thank you for your post. It brings to light some of what is going on out there. Scary!

I do my trading through a Candian Bank and am wondering what exposure these banks, mine in particular, have to all this crap? Anybody here anything along these lines?

About gold selling to maintain an "orderly market" - It's my understanding that the US has a lot of gold - 2500 tonnes or so and I expect that they could easily mobilize this gold to do bail outs.

The connection among this old boys club seems quite obvious. It also includes Rubin and his ties to Goldman Sachs.

There must be a personal obligation working on this level. And this includes not just gold, it also includes the dollar value relative to the British pound. The Washington Post reported yesterday the LTC had a loss in the magnitude of $2.5 billion because this hedge fund bet on a narrowing of the spread between the dollar and the pound. Instead of, it widened. Doesn't that indicate that there were top level commitments made before the LTC financial managers would enter the bet they thought they could trust?

Now, why were they wrong? A very fundamental assessment towards the gold price and the dollar value ( which included the pound ) went out of the control of these guys. In these magnitutes there are only two entities which could have scruded them: the BIS and/or the Euro-block countries.

That means: the Euro-block countries are acting in a way against the dollar lords in a way which is nomore predictable by the anglo-saxon financial establishment.

But this also shows that the FED establishment, in it's character as a private institution, has it's acting financial wardogs. And the LTC was one of them. They must have lost an important battle.

have no fear goldbugs, this dip is to be shortlived.

once again I refer you to the weekly silver chart 1995-mar1997. we are following the move nicely--perhaps a little less vigorous than the silver move. I would speculate that the 310 level ( Dec ) should be the next target-to be reached by wednesday.

If you have an hourly chart, you will notice how it too has a close correlation with the 97-98 daily silver chart. today's peak corresponds to the 11/21/97 silver spike. it is possible that the 310 level will not offer much resistance and that 320 will follow immediately. if so, I would think that a big selloff-$15 or so--would ensue, followed by a blowoff top above 330 maybe to the 340's within two weeks.

thus speak Ze... charts

GOVERNMENT ADOPTS TOUGH STANCE WITH
WESTERN BANKS
Russian officials' comments on foreign financial institutions turned
bellicose on 24 September. Deputy Prime Minister Aleksandr
Shokhin told reporters that the attitude of Western banks and
international financial institutions is "driving Russia into a corner."
He added that "I do not wish to scare people with a prospect of a
default on foreign debts, but our partners, including the G-7
countries, should realize the situation" that Russia faces. The same
day, Central Bank Chairman Viktor Gerashchenko warned that
those foreign banks that are being "greedy" and are unwilling to
search for a solution during debt negotiations "may get nothing at
all." But he noted that some Western banks are acting reasonably.
The next day Shokhin told reporters that it would be shameful for
the IMF mission to leave Moscow "without cheering the world by
announcing results." JAC



INCOMES TO FALL, ECONOMY TO SHRINK
The Russian Central Bank on 24 September predicted that
inflation will soar to at least 240- 290 percent this year and that
the population's real incomes could plunge by 13-24 percent. The
bank based its predictions on a exchange rate of 20 rubles per
dollar. If the ruble's value falls below that level, then inflation will
be even higher and real incomes even smaller. According to
Interfax, inflation in July measured only 0.3 percent, compared
with 45.5 percent for the first 21 days of September. The Central
Bank also forecast that GDP in 1998 will fall by 5-6 percent. In
1997, GDP rose 0.8 percent. JAC
http://www.rferl.org/newsline/1-rus.html

Instructive cataloging who says "nay" to ( e.g. ) LTCM bailout--
Paul Volker had some scathing words; Toyoo Gyohten likewise assumed a 'fighting stance' in Toyko. Both gentlemen are G30/BIS...
The forces have truly been engaged.

This LTCM problem goes way beyond borders.

France Parisbas/Crdit Agricole
Germany Dresdner Bank, Deutsche Bank
England Barclay's
Switzerland UBS ( 1Billion SFR after tax write-off! ) , Crdit Suisse

Plus the American banks/brokerages. I suppose those who control these banks also control the private banks who have license to issue legal tender in most of the world.

A concerted effort was needed to stop redemptions from forcing the closing out of derivative positions, IMO.

I just wonder if LTCM was carrying out any PPT functions.

Looks like I was right when sold my gold calls today, when ask price was about 299. More then 100% profit is enough

Oh, yes in deedy do, we are having mucho fun.

Group think working S-L-O-W-L-Y, but working. A week or two from now?

Fall brings in its own sense of smell, of failing light and cooler breezes. The geese know when to fly to warmer climes. Will you?

Things may be what they seem to be .. or not. But we know what is regardless of these puppeteers and their plays. A time will be arranged for the great ones to flee to their warm hidaways. At last the people will look up to see nothing and the dream will evaporate before our eyes.

Until then, hold hands while crossing the streets of this very busy world. No one considers the childern. Think about them, often.

All we need now is for a money market fund to "bust the buck." If that happens in this market environment, all hell will break loose. If John Q. Public cannot even hold cash as a safe haven, where can he go? Does anyone have an idea?

Is there a psrticular chart that you can steer us to for a visual.
An earlier poster today showed a chart which looked ominous.
Thanks.
Highhopes

and the puff so large that Mexico would be barren...to ya...which if spelled differently was a Pug during my childhood...although linguistics is not the tempestous meaning behind this missive...

I just before ice realized that I have Zero desire to harm who in addition to the aformentioned was my organ/piano Teacher at Trinity...I have no desire to cause harm...nor injure anyone...and if you play the Recorder are you a hypocrite...and Zero was the name of another dog during my childhood who was named such because we got her for nothing and was more than a treasure...to all the small people that wore Dr. Denton's...

NO more hatred...or anger...lots more Jerry Jeff Walker and steppin out of other folk's way and saying excuse me...yup...Darn GLAD to meet ya...first beers our on me...but served in a glass...

And remember what David Brower ( Earth Island Institute ) said...

"Just because we can do something does not mean we should."

know if Bank of America participated? My BoA stocks went from a high of almost $100 in July to $60 now. They're bouncing around this week $56 to $64. This 40% drop resulted from Russia exposure and I need a bailout too! I actually got rid of half of it at about $95, couldn't sell the rest then because they were book shares. Anyway, should Congress be checking into the bailout? Those fat cats didn't bail any gold bugs when they were raking in 47% gains!

Thanks, Cowgirl

S&P's unable to break the 1059 in the last 2 hours. Its now almost 3pm and about time for the weekly late afternoon beating.......volatilites in the 5min have dropped substantially in the last 30 min and I would suggest selling any breaks....good level seems to be 1055.50.

Put your cash into Physical Silver. I have done that for the very same reason as you. I invested in Silver because it is selling at very cheap prices ( Its been going up big time this past week ) . If you already own Gold, Silver is the way to go.

Ofcourse, this is just my opinion based on the historical stats on silver investments. I have found that PHYSICAL ownership is much more than an just an investment; It is a guarantee that your money will at least retain its value.

: )
Gregg

Hi Kevan! Just wanted to give you a Namaste-Dig it!

: )
Gregg

Hi Kevan! Just wanted to give you a Namaste-Dig it!

: )
Gregg

RJ's opinion is that Another is a sales gimmick, I tend to agree. But, that does not mean that Another is wrong.

Some of the hedge funds found out that there was no market to unwind their postions even if the position was theoretically profitable. In the Brazilian gov't debt market, one fund that was doing yeild curve arbeitrage, found that both it's long and short position lost money; that is ( they thought ) impossible. But it happened.

Another has said that "when the world monetary system breaks down, there will be no markets" buy or sell. His prediction does not look so farfetched today.

If the markets did spasm, our gold shares might not be tradable and therefor valuless.

RJ's opinion is that Another is a sales gimmick, I tend to agree. But, that does not mean that Another is wrong.

Some of the hedge funds found out that there was no market to unwind their postions even if the position was theoretically profitable. In the Brazilian gov't debt market, one fund that was doing yeild curve arbeitrage, found that both it's long and short position lost money; that is ( they thought ) impossible. But it happened.

Another has said that "when the world monetary system breaks down, there will be no markets" buy or sell. His prediction does not look so farfetched today.

If the markets did spasm, our gold shares might not be tradable and therefor valuless.

Hi Kevan! Just wanted to give you a Namaste-Dig it!

: )
Gregg

The banks should be OK during rounds one and two -- their deposits are guranteed by the full ( of sh!t ) faith and credit of the government.

The US will resist all temptation to monetize gold reserves. Chairman Greenspan knows that if that happens, the end is near. The solution to all the financial woes of the world is to have honest money -- backed up by an asset that is not a liability of somebody else. Gold comes to mind.

Japan will not allow the yet to become the reserve currency of the region, yet recognizes the need for a reserve currency other than the US$. The only alternative that will be paletable to Japan and acceptable to China is to have an ACU ( Asian Currency Unit ) that is backed, in part, by physical, unpledged gold. China should propose this before they resort to devaluing the renmimbi. Japan is likely to jump on the idea, since nothing else seems to work for them.

I don't think this gold bear has run its course. Stocks have taken a
big drop from the peak; the dollar's come down nicely and it appears
we'll even have lower short-term U.S. interest rates. Still we can't
get more than a short-covering rally. And a rather tepid one at that.
Looks to me like we'll get new lows within the next few weeks. Very
frustrating.

"What, it may be asked, will be the value of gold to them, the people of the United States, if they neither require it for internal circulation, which they may think can be managed as well by paper, nor for payment of foreign liabilities, from which, under our hypotheses, they will be comparatively free.

"If that mischievous financial policy, which has had its origin in the North American Republic during the late war in that country, should be indurated down to a fixture there, that Government will furnish its money without cost! It will pay off its debts and be without a debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the History of Civilized Governments of the World. The brains and wealth of all countries will go to North America.

"That government must be destroyed, or it will destroy every monarchy on this globe."

..... The Times of London, 1865

as quoted in "Real Money versus False Money" by T. Cushing Daniel
( Monetary Educational Bureau, Washington DC, 1924 )

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

This, indeed, appears to be more than a mere skirmish. ..... Bob in DC.

This is a smart thing.

In IMF, I stands for International. What does the MF represent? ( Rhetorical -- do not answer or Bart might revoke your posting privileges. )

I don't think the U.S. can sell gold because it's illegal to do so. Congress
would have to change the law. The golden eagle is actually minted
with gold bought in the open market and not out of U.S. reserves because
of the law.

COMEX metal warehouse stocks - Sep 25


TOTAL STOCKS CHANGE
GOLD 924724 ounces unch
SILVER 72252682 ounces dn 1802399
HG COPPER 65322 tons up 1377
--------

GOLD
Scotia Mocatta 285223 unch
Morgan Guaranty 130360 unch
REPUBLIC NAT'L 509141 unch

SILVER
Scotia Mocatta 3628304 dn 530941
Morgan Guaranty 20208036 unch
Republic Natl ( NY ) 40850393 dn 1271458
Republic Natl ( DEL ) 7565949 unch
Wilmington Trust 0 unch

I thought the Robber Baron Bankers ( The Federal Reserve ) stole the people's gold in 1934, and that this confiscated gold was to back the Federal Reserve Bank who had license to print money. Thus the Fed owns the Gold and not the US Government.

If anyone really knows, please post. TIA

Also note this wasn't just an American event. It happened in England and Australia as well.

Todays events, the failed gold rally, the Dow recovery ( S&P futures were -20 this morning, implying a market sell-off in the vicinity of -200 or more, the unabashed cynicism of brokerage houses who rally around the members of their inner-circle, the Fed participation, or rather manipulationit all verifies the fundamental dishonesty in global trading. And gold seems to be at the center of it all. If I have resisted conspiracy theories up to this point, I will no longer resist paranoia. As I indicated earlier, gold came under pressure over $301. Obviously, the manipulators entered the market to attack its rise. Whether banks sold gold, or the Fed itself, considerable selling wiped-out any perception that gold would allowed to become a "safe haven." Such a concatenation of events deeply troubles me and my hopes for a gold bull.

the very real probability that the BIS/Orient is of a like mind
There are many revealing snippets that add real substance to this BIS/Orient~BIS/Occident

DEJ@not.over.yet? No. Wellington is still in Spainthe Waterloo revisted lies ahead

This IS one omnipotent dude............ ( ? )

Supposedly.....during the other days 'session' he was overheard talking about Sammy Sosa and the fact that Sammy said that Mark M. would win the home run race.........AG said something to the effect that Sammy may be dead wrong about his prediction of Mark winning the 'race'.

Well......that day/night Sammy WHACKED 64......AND......65 to TIE Big Mac.

Hmmmmmmmmmm.......moral of the story: Well, there is no moral....it's just a neat story and it goes with what 'Who Cares' has been saying regarding the omnipotent AG..........and that old commercial saying......."when he talks, people listen"....or something like that.

Anyway, thought youse bugs would like a break from the grind and have a little levity thrown yer way.......uh huh.

go gold...

cherosaki! - when gold gets to 300+ ( IF ) then their will be MANY peopleos waiting to sell it into the dirt from which it came.............RJ has mentioned it too..............take heed. Ten cuidado..........this bear ain't dying as quickly as one would imagine. I wil put in some shorts too.........I still believe the bottom is not quite in yet..............but, what do I know.............. ( proud Disney owner ) ....... ( comin' back????? ) ........ ( or sinking, sinking, SUNK ) ..... ( ??? ) ...

go DELL! ( smile ) ...

and Silver is a dog.........but I like dogs....... ( eh Ben? ) .....whoof whoof!! ........get ready for the selling to commence......... ( ugh ) .

Mr en.....you are my fren...yuk-yuk...

away....back to grinding......



as Wonderfilled as they were sent...Dig IT!!! Thank you for the thoughts and can't wait till yuz both get here for dinner...off to watch the Littles attack baseballs...Crazy Unkle Kevan has to be there or they will keep the other team wating until I show up to root and cheer...bbl...Peace...

What a fun week it's been. My favorite quote of the week was from the Prime Minister of Malaysia when he started talking about foreign investors "robbing" his country, that rocked, by far the most accurate description of events I've heard pass through a set of political lips. So let me get this right - if I invest a million bucks in something, it doesn't come through for me, and I take my money out, I'm stealing. I'll have to keep that in mind, I'd hate for someone to start sending out the attack dogs and accusing me of war crimes or something. At least south east asia can tinker with the system, lock down their markets, and keep all of us bad people from stealing everything they "own". So they've got that going for them, which is nice. So that was my favorite sound-bite. First rule of politics - if the game starts going against you, change the game.

COMEX Metal Warehouse Statistics for Sept. 25

-- TOTALS
Gold 924,724 + 0 troy ounces
Silver 72,252,682 - 1,802,399 troy ounces
Copper 65,322 + 1,377 short tons
*********************************************************************
My guess is that we're seeing more Comex Silver drawdowns because there
are some accumulations by big players going on. Time will tell, whether
this is true. Even if this Silver is making its way to LBMA, it doesn't
mean it's going to be necessarily available to the open market in the
near future. Isn't most of Buffett's Silver being held there?
Also, there isn't any reason to believe that consumption has gone down
that drastically. If anything, demand is increasing because of seasonal
factors and commercial use.

Of course, this is all my own speculation....Silver may plummet below 5
bucks once again because of massive shorting. I'm betting its not. Hope
I'm right! Go Gold! Go Silver! Fox-man

as Wonderfilled as they were sent...Dig IT!!! Thank you for the thoughts and can't wait till yuz both get here for dinner...off to watch the Littles attack baseballs...Crazy Unkle Kevan has to be there or they will keep the other team wating until I show up to root and cheer...bbl...Peace...

Observation and a Question.

I've been enjoying this forum for about a month, and appreciate the varied views and observations herein. I'm in agreement with you Voyeur Professor, that there seems to be an incredible battle to contain the free floating price of gold prescribed by supply and demand. But the demand is increasing, causing the 'fire in the HOLD' to get hotter. It is getting harder to contain and as with all bubbles, the longer they run, the more dramatic the release at the end. These things can be posponed, agreed for a long time, but not indefinatly. I think it is obvious that the pressure in the kettle is increasing and containing it is requiring more energy.

korondy -- thanks for you 'global' example

Now the question. Is there any way to find out buyers and sellers of large quantities of gold. i.e. to disect todays trading?

It would seem to me that it takes large postions and that should be hard to hide, but what do I know?

Milo

Rather the "fur flying" territorial battle typical of the banking world, AKA "business as usual" {:- )

ComEx Commitment of Traders ( Sep. 22 )

Commercials: Long 106,870 Short 96,553 contracts
Speculators: Long 13,273 Short 32,286 contracts

Not as bullish as the Sep. 15 report but still pretty good.

See http://www.cftc.gov/dea/futures/cmxlf.htm

COMEX silver warehouse stocks down 1.8 million today.

Somebody is taking delivery.

Gold = producer sales.

PGMs = wait for rise.

Indeedy

According to Executive Order #12919, your president and the F.E.M.A. has the power to do just about anything he pleases in an emergency situation. While they may not choose to sell the government's gold, they can just confiscate yours and sell that. The definition of "emergency" may be an arbitrary one.

http://www.hevanet.com/nitehawk/nwo16.html

Did you guys take care of things while I was gone? Just looking around it looks like everything pretty well went as forcast thsi morning.

Just sitting at my desk and then the whole building shook back and forth for about 10 seconds. Am told it was rated a 5. Just a walk in the park for you California dudes. This must mean something for gold. What it is, I have no idea. Puetz, Sheller ?? Other lunar/astrology experts??

http://cbs.marketwatch.com/archive/19980925/news/current/capitol.htx

Today look sooo good for the bulls. I really thought today would be the day. So sad ....so sad.... To open $6.0 above the 200 day moving average only to close below it again..... so sad..........
But have no fear. maybe if all of Kitco buys gold futures contracts.....and don't use stops, it's only a matter of days till $400. NOT!!!!

I remember asking this question a few weeks ago and got no answer So am i to understand the Brit Gov stole our gold as well in 1934?
what happens if you have lost it???

curious

cpo

You sound a little bitter I take it your are losing on this rally. I think short term the Gold will back off ( for maybe an hour or two on Monday ) . SOOO many LOSING SHORT INSTITUTIONS..and SOOOO little time. Good luck my friend your gonna need it. PS if you trade on the floor how are you posting here in the AM??

Please take a look at Richard Nolles site :
http://www.astropro.com/forecast/predict/1998-09.html
very good on quakes hurrycanes etc and check out october

get & keep gold
cpo

From the WSJ Article *snip*

**Mr. Foster of ( L ) iberty ( C ) oin ( G ) alleries says his customers cite not only the recent stock-market roller-coaster ride but also rumors about the havoc that could be wreaked by the Year 2000 computer problem as a reason for buying gold. "If your credit cards don't work and your bank cards don't work, what will work? Gold," he says."They buy it 'just in case.' Some people think the world's coming to an end."**

Some people think the world is coming to and end?..........HUH?

So is this " dealer " saying his customers are a bunch of doom and gloomers?

Whackos?Retards?Fatalists?Survivalists?End O'da World'ers?

Is this " dealer " implying his customers are..........

Stupid?Wrong?Ignorant?

Reminds me of a poster HERE!!yuk yuk yuk yuk yuk yuk yuk yuk

Where's Ted when ya need him?yuk yuk yuk yuk

Think I'll open me a coin shop.Must be a REAL easy business when you can lambast your customers in a National Newspaper,eh BART?Yuk yuk yuk yuk...

I will make a commercial with--- bombs going off-----comets plummeting to earth-----

fire and brimstone----moon turning red----- and at the end saying--- " GOT GOLD? "

Ha ha ha ha ha......I love it!!

Go gold.........Go Disaster

Go UBS

Go producers

Several more informative links at this site about Y2K
Again it is not so much WHAT was said but WHICH media is spreading the word about "bunker mentality", "Federal agencies flunk", etc.
http://www.chicagotribune.com/business/businessnews/ws/item/0,1267,9693-9678-323,00.html

Regarding Gresham's law:
A problem much talked about among Goldbugs is the low price of Gold due in part to the low demand for it since it has been stripped of its role in commony circulating money. In many respects, it matters not if most or all of the first billion or so coins disappear into private hoards because
1 ) in dire times they will come out again when needed and
2 ) the more that are sold and sequestered away - the higher the demand which will stimulate mining and Gold mine stocks and the price for the physical Gold. Both of the outcomes in #2 would make Goldbugs happy.

The enterprise to mint 10-grain Gold coins can be looked upon as an effort to increase demand for Gold - even if the 10-grain coins are only seed to initiate people into buying more Gold in larger coins. Such an increase could help our own Gold holdings {and portfolios of Gold mining stocks} even more than the amount we invest here - especially for those with large Gold investments. Let's call it a chance to INFLUENCE THE MARKET FOR OUR OWN INTERESTS instead of merely being passively buffeted by the manipulations of governments, etc.

I can't remember the specifics of situation in Britain in the 1920-1930's, but I remember that there wasn't too much Gold circulating in Britain and that the Govt wasn't honouring the redeemability of its notes for Gold ( I believe this is correct, though the exact details could be wrong ) .

I toured the Perth Mint in 'stralia some months ago. The Guide told us that the Mint was put there so that this community ( mostly miners ) would have currency for commerce. So people would take gold to the mint, and the mint would coin it.

He had everyone move to the next room and I asked him when they stopped using gold coin as currency, and he said it was in the 30's ( I forget the year, it was around '34 ) and by British edict. Australia was a British colony then and under British rule.

Again this is to the best of my knowledge, any corrections or comments are welcome.

The long bond closed at new high's today with yield at 5.12%. The 90 day Treasury bill closed yielding 4.38% ensuring a rate cut next week by the Fed. Gold is rising as an hedge against the coming bankruptcies and as a safe haven in times of declining equity prices, uncertainty and distress. I'll repeat, the deflationary trend can't be stopped or reversed by any CB or politician. It will run to exhaustion and this is a long term process. I know that 99.999 % of the participants in this forum disagree with my thinking. Anyone expecting inflation to return will be greately disappointed and wiped out like the hedge funds. The long bond is shouting loud and clear, DEPRESSION is ahead starting in Q1-2 of 1999.

Right now the lilly white BONKERS as a group of concerned citizens ( CONCERNED FOR THEIR HIDES ) will bale LTCM.

If it works they own LTCM lockstock and have a pitbull hedge fund to manipulate markets and gold; as for the limited partners, they get a well deserved S-H-A-F-T, no tears their.

If they lose then the taxpayer's money saves the bastards, unless we say F$%# You, we just flushed our support down the toilet.

Don't worry. Let them sell. You buy. If you are speculating they can burn you good, but if you are taking delivery, one day they will wake up and their gold will be gone. Actually they will quit long before then. What they are doing is bluffing. They are saying "We have so much Gold we can force the price down any time we want. If you buy we will make sure that its value declines even more". This is smart only as long as it works. If this bluff is called they are in big trouble. I wonder how many times they will raise before they fold. The outcome is not in doubt. Its only a matter of how much money is going to be in the pot when the winning hand is shown. It won't be theirs.

5.2 is pretty big, even for CA. Any damage to Cleveland? What about Miami. I wonder if all these disasters are going to hit Berkshire and its reinsurance division. I don't think there is too much earthquake insurance in Cleveland though, so not much risk there.

And what about the Carolinas, anyone have a figure from the last hurricane?

The gold bull is alive and well. Greenspan is in panic mode organizing a bailout for a high stakes gambling casino. The printing presses are running full tilt.

Gold rallies tend to have sharp bottoms. They shake out all the weak hands before going up. We have been in a vicious bear market for so long no one has faith in any rally. Everyone takes quick profits.

We will retest 300 again shortly. The first two times weakened the shorts . As they say the third time is the charm.

Buy gold! Buy silver! It's going to be fun.

All: I guess the world is safe again -- the crisis averted, for now -- with all eyes on the price of gold.

http://www.nypostonline.com/business/5765.htm

Amazing how quickly LTCM was propped up -- no need for the ineffective IMF this time. Certainly shows you that whatever they were up to was too big to fail -- apparently too closely enmeshed in the world's financial syste. There may be less reserve the next time something like this happens. And, Wall Street will remember that it was the derivatives superstars that got in trouble this time, not some mere rogue traders. Just wait till we hear about those mere mortal investment firms that got burned.

Just a thought -- the great depression began somewhere near 1925 with the US markets crashing in 1929. But -- it was not until 1932 or so that the Rothschilds bank Creditatenstat ( sp? ) in Austria failed. I think if we do have a world financial crisis -- even with derivatives -- it may occur unexpectedly -- possibly farther into the future than we might guess.

I shudder to think what would happen if AG and RR were not at the helm.

Whatever you think of our financial leaders, they are competent, and are charting a difficult course. Those of you who do not think they are doing an admirable job ought to think what it might be without them. Think about what you would do if you were AG, and thrust into the position of defendint the fiat currency system.

It is not a matter of whether you agree with whether or not we have a fiat currency system, it is a matter of maintaining the status quo.

I personally do not want the price of gold to skyrocket, as it would probably mean the end of our current financial system. This may very well happen anyway, but it would be good if it happens fairly gracefully. I think AG knows his role quite well in this matter. I sincerely hope that AG and RR are able to maintain their current level of involvement until the world's financial crisis is over. Might take years, unfortunately.

Arden - Today's gold market was a good example of fine tuning the entry point of a trade. If you where not following the posted trade the window of opportunity closed very quickly. ( sell dec gold 301-303, xau 78-80 ) Gold traded above 301 for less then 15 minutes. I shorted it at 302 with a 305 stop, it stayed above 302 about 3 minutes. Because I try to fine tune the entry a lot of trades never get filled. But the ones that do usually turn out to be low risk high return trades. I also sold my Select Gold fund the first hour when the xau went over 78 adding an additional 3% for the day.

Follow the money = ( taxpayer-- US Gov. -- IMF -- Debitor -- NY Bank )
Same, Same ( taxpayer-- NY Bank )

After Y2K - the 2nd & 3rd whammy. After we've used up our supplies and are exhausted we get nailed with the Biblical propecies - black days, red moon, famine, pestilence, war, death, etc.
Y2K just softens us up for the final curtain of TEOTWAWKI.
Nothing but cockroaches, rats and ground squirrels left ( no trees either ) !

We best sell out our Gold before then cuz the four horsemen won't be buying it ( and the survivors won't need it ) . Whether you unload by the bar or by 10 grains at a time - best unload it while the market is willing to buy at a sizeable profit - for you.

E-mini as well as Gold and Silver. Any comments on what lies ahead
for Monday? How are you positioned on your Dec S&P's? TIA Fox-man

It didn't take a rocket scientist to guess we'd be 100+ points under at the open today as I guessed or that the market would go up in late morning trading. But I was way off on my guess at the close ( down 200 ) and gold ( over 300 ) . Alas, 'twas not to be. Not yet. Good thing I'm not a day trader. I'd be broke.

Monday the market will have to balance the rate drop against the lower earnings reports and maybe we get a wash. Unless a few more hedge fund cockroaches scurry out from under the accountants' desks.

Think I'll go home and have a nice, big drink with my wife. Gulp!
-EJ

Dow/Gold Ratio = 27.31. The 233 day moving average is 28.56. The past 19 consecutive closings have been below the 233.

XAU/Spot Ratio = .252. The 233 day moving average is .248. We have had two consecutive closings above the 233.

Posted this in July...in the light of recent events, it seems 'repostable'...
From reading a FT 'Special Survey'in July--

"Oh yes, there was mention of the fact that derivatives had not taken off in Japan because of the "gambling laws". Yes, the gambling lawsmy goodness!" {:- ) )

I heard today, and I presume it is true, that the major investors in the LTCM were the presidents and chairmen of the biggest banks and brokerages. It was their personal funds at stake. They agreed to pony up corporate funds for the bailout. They were invited to the meeting by the Fed and were surprised to see each other when they arrived.

Of course, if we were on a gold standard, then we would not need the services of AG and RR, except maybe as accountants.

Donald
It is rumoured that Burke said to Wills, sometime after their food had run out and they were in the middle of an Australian desert.."We could always eat an Aborigine." The party had been trailed by a party of Aborigines who were watching over the expedition to Cross Australia South to North to make sure they would not come to harm. When the Aborigines overheard this comment they left Burke & Wills to their own devices and a place in the history books as more noble and misguided English Adventurers. Saw a memorial to them in Melbourne..

Burke & Hare are much more, well, colourful. Vivisection, anyone?

All
So the DOG team managed to keep my precious below $300 today, eh?

Battle has been commenced, a skirmish around the border patrols will not decide the war.

S&P - Flat, may go long Monday morning, the market could get pushed up to 1100 waiting for Greenspan. More importantly I'm looking for a low risk short. I think it will be between 1080 - 1100.

Dec Gold - Short at 302, I think we are in a wave 2 correction not sure how far down it will go.

Silver - Flat - Sold out at 5.20, no particular reason, every thing else was going back down.

I knew that only someone from your part of the world would understand my comment of this morning.

"He's a fund manager, and his big win comes only from new money. He's just lucky that it's looking good now and he'd be silly not to put that in his sales kit.

"One fun thing about working in the institutional investment world is that you see it just like any other biz: the engineers invent cool stuff,
marketing creates demand, and the sales team racks up the revenue. It's no different from Microsoft, and the fund managers are as loyal to their
customers as Chairman Bill is about his.

"Like that great line from FIASCO: 'lull them into that calm and then totally rip their faces off.' Trice's fund is making big, leveraged derivatives bets just like Meriwether, just like Soros. And just like those guys, he honestly believes he can spot mispricings. Only difference is that he's packaging it for former Fidelity customers."

Interesting view, no?

-EJ

Given the fact that Alan Greenspan decided ( on the spur of the moment? ) to take up an invitation to address the House Budget Committee on Sept 23 - at almost the same time as the NY Fed was co-ordinating the hedge fund bailout - I cannot understand how anyone would be surprised at Gold's inability to hold the $Us 300 level today.

For the past 48 hours, a ripple of deep fear has gone through stock markets everywhere. The main victims have been the banks. The spectre of "systemic risk" is surfacing in the popular press from Australia to Asia to Europe to Latin and North America.

How would a fear of systemic risk be confirmed? Well, a fast rising $US Gold price would certainly be a good way to do it. That happened on Friday morning, but didn't last. If the Gold price has been depressed in the past by forward selling, shorting, threats of CB sales etc, why would anyone expect it to stop now, in the midst of increasing fear over a looming systemic risk as presented by the hedge funds?

If the world now expects a Fed rate lowering on Sept 29, then the time after the FOMC meets will be even more dangerous. Meanwhile, Gold is NOT in a $US bull market. The technicals look promising, but no cigar yet.

Fascinating that today Cleveland received a Mars conjunction to its 20.51 Leo Venus, within a degree, and a Venus square ( also within a degree ) to its 22.53 Gemini Saturn. All against a backdrop of Jupiter squaring that Saturn from 21.53 Pisces. Hmmmm. Maybe this astrology stuff works after all. The great metaphysical thinker and writer Harold Waldwin Percival once said that astrology works best in retrospect. But it does work.

Please, however, do not lump me ( and I do mean LUMP ) with Steve ( Eclipse Man ) Puetz. He has said publicly on many occasions at Kitco that he does not believe in astrology. That, of course, is his right. And there IS a difference between people who use eclipse data to buttress their predictions, and astrologers. Not necessarily one and the same. ( one is a usurper, perhaps... ) I personally am not an eclipse man. I use simple planetary transits to corporate and contract horoscopes. Steve would not know what the hell I was just talking about. And just as well.

Silver stocks fell 1.8 million oz to 72 million oz.!!!!! That ws probably reported earlier but I have had problems getting on Kitco for the last 6 hours.

If silver hadn't sold off with everything else, if APH hadn't liquidated his silver , if APH hadn't been dead right about the reversal today, if the XAU hadn't stopped right where he expected ( under significant resistance,if AG didn't have the interest rate cut to levitate the stock market next week - heck, I'd be pretty excited about my small long silver stock position.

However, we have seen silver and silver stocks decline now for six months. Metal market bulls don't have much staying enthusiasm with good reason. But I think that is changing.

I'd say the stock rally Monday and Tuesday will be a case of selling on the news. The consolidation pattern being formed is massive between 1050 and 930, should it be resolved on the downside look look out.

A little confidence in the dollar early next week, stock strenght folowed by what .... what is left but the beginning of October.

http://biz.yahoo.com/rf/980925/3y.html

This seems like the most honest appraisal, yet, from Japan..
"And that's very serious, because they have over $U2 trillion
in derivatives all changing hands with foreign institutions.
This will cause a systemic meltdown, unless we do something
new to contain the problem in Japan, it will create an
enormous contraction of credit worldwide."
-------------------------------------------------------------------
http://www.afr.com.au/content/980926/world/world2.html

http://biz.yahoo.com/apf/980925/emerging_m_1.html

...the real earthquake is brewing in the horoscope of Alan Greenspan.
Today his 22.49 Leo Neptune was exactly conjuncted by transiting Mars. You don't have to be an astrologer to intuit what Mars represents. Even aurator's erudite understanding of mythological history and symbolism makes it a no-brainer ( tell the people what Mars represenhts, Salty ) . But the real fireworks for the Chairman will come in January/ February 1999 when transiting Uranus sweeps across his natal Venus / Jupiter conjunction. Verrrry powerful. Mark your calendars. And stay away from the fan.

P.S.: Don't forget Afghanistan and Iran in the next week or two.

http://biz.yahoo.com/rf/980925/im.html

XAU END OF DAY SUMMARY
1998-09-25
ABX-Barrick Gold-------CLOSED AT $20.5000 0.3125 XAU CONTRIBUTION ( Est. ) 0.38
ASL-Ashanti Gold-------CLOSED AT $08.1250 -0.1250 XAU CONTRIBUTION ( Est. ) -0.04
BMG-Battle Mountain---CLOSED AT $05.8125 0.0000 XAU CONTRIBUTION ( Est. ) 0.00
CDE-Coeur D'Alene----CLOSED AT $06.2500 -0.3125 XAU CONTRIBUTION ( Est. ) -0.02
FCX-Freeport Mc-------CLOSED AT $13.0000 -0.1250 XAU CONTRIBUTION ( Est. ) -0.07
GGO-Getchell Gold-----CLOSED AT $16.5000 -0.1250 XAU CONTRIBUTION ( Est. ) -0.01
HL-Hecla Mining--------CLOSED AT $04.8125 -0.0625 XAU CONTRIBUTION ( Est. ) -0.01
HM-Homestake Gold---CLOSED AT $11.7500 -0.2500 XAU CONTRIBUTION ( Est. ) -0.17
NEM-Newmont Mining-CLOSED AT $22.8750 -0.5000 XAU CONTRIBUTION ( Est. ) -0.25
PDG-PlacerDome Gold-CLOSED AT $14.1875 0.1250 XAU CONTRIBUTION ( Est. ) 0.10

XAU CLOSED AT 74.11 -0.58

is unconfirmed. Gold has tested the $300 threshold twice, and failed.
I have been watching lease rates. If they are still down at .6%
for one month gold, then the CBs are providing plentiful gold at
ludircrous borrowing rates to short it back down. Have you seen
a one month lease rate lately? The lease rates must go back up
over 1% to verify the bull, IMHO

Rhody

http://biz.yahoo.com/rf/980925/beb.html

You are really showing your colours now wishing for the existing "system" to remain intact. It is corrupt, unstable, and based on the shifty foundations of fiat currency....the sooner the whole thing goes under the better.

The only question is how many will realise exactly what happened...these derivatives guys surely can't see past the end of their algorithms...they still don't get it....interest will always end in out of control growth and busts.

The only hope for the next generation is AG is true to his youthful innocence and puts the world currency on a gold standard....else we will get the same old shamozzle in 30-60 years time again....

WE ARE CLOSE!!

I've always said that once the shorts have been covered in ABX, that's the start of the bull market in gold!!!!!

ABX has been shorted 10-15Million shares for about 2 years on the TSE.
That's about 5% of the total shares O/S in ABX

Trading in ABX has been VERY! heavy lately.

Example...Today, about 4Million shares traded on NYSE when the average is about 1M.
Note that only ABX and PDG were the only XAU stocks to go up.

lakshmi

here is some data for solar eclipses:
http://sunearth.gsfc.nasa.gov/eclipse/SEcat/SE1996-2020.html

I last visited this site in September 97 and there were tables of SOlar and Lunar eclipses for past 300 years available. I downloaded them all into my archive. Let me know if you'd like any historic data. I used these tables and a gregorian calendar when I questioned Peutz's Solar eclipse linked to financial crashes and Blood in the streets assertions here at kitco over 12 months ago, it was in 3 parts...

Date: Wed Sep 10 1997 01:37
aurator ( Puetz Predictions Pulverised:- ) ) ) ) ) ) ) :

Tantalus Rex, nice catch on the short positions. I, too, think gold is about to take off. But, like Rhody states, the CBs still control the pace of the bull. When they decide to put the clamps on leasing by raising their lending rates, the bull will commence - at the speed they dictate. We're so close we can almost touch the horns. There should be a small dip down early next week, but the POG will have breeched $300/oz by friday. Last chance to load up at ridiculously low prices.

LIQUIDITY! .... Banks which have been chartered to supply liquidity to the American ( and world ) economy are, instead, diverting resources to support the gambling habit of their cohorts.

Those who foresee deflation may be right! .... Bob in DC.

http://www.mgl.ca/~yauger/Xdaily.html


One less bear.....

I have seen it in more than one place that lease rates went up to 1.7% overnight. There is mention of this on golden eagle.

http://biz.yahoo.com/rf/980925/82.html

shorts that really need to cover are the ones engaged in the
gold carry. We will know when they scramble to cover when
one month lease rates for gold shoot past 1%. At lease rates
below 1%, the CBs are offering so much liquidity that I can't
see gold breaching the $300 threshold. Bart has not updated
his lease rate figures, and as far as I know, neither has the
World Gold Council.

I know Bart says the lease rates are market driven, but if they
are, then 0.60% lease rate says gold is almost free to borrow.
This means no bull.

If leasing gold is a manipulation to begin with, then it follows
that the lease rates are also a manipulation. They can be set
arbitrarily low to encourage shorting. Lease rates are low,
and that means the manipulators are also denying the bull.

Whether you believe lease rates are market or a manipulation,
if they are under 1%, we have no bull. I wish it was not so.

I agree with what you're saying about the gold carry.
My reasoning is that those who've manipulated POG via leasing/gold carry also have a stake in shorting ABX.

"As they've manipulated the POG down... they will also manipulate the POG up."

So, ABX short covering is just a simple indicator of the GOLD BULL to come.

The distinction is critical. One year leases were at 1.6% last week,
and they follow producer hedging activity. It is the one month gold
which is involved most in the speculative gold carry. If that 1.7% is
for one month gold, then the bull is on....... If it's for one year
gold leasing, its just a minor tick up. Given the recent run up
in gold, some producers may be hedging. Watch the one month lease
rates. They follow the gold carry. If we rip past 1% YEEEE HAAAAW!

The Real problem lies with the Fractional Reserve System of Usury banking. Even if we were again on Gold standard, the fractional reserve system would lead to expansions in the money supply and then ultimate collapse. The Tally system in England worked very well during the middle ages. The key being that there wasn't usury that got people to put their money in banks. The banks would in turn loan it out to people who would buy something from a seller. That seller would return the money to the bank. The bank would loan it out again. It's called fractional reserves, and it works principally the same whether you use bogus Fed notes or circulated Gold & Silver coin.

Of course with Gold & Silver Coin there is more of a check to the bankers' power as people can withdraw funds ( real coin ) .

But What I am trying to say is that even if we were put on a global gold standard, we would still have a boom to bust cycle due to the Babylonian System of Fractional Reserves and Usury. It just wouldn't be manipulated to these extremes.

Here's an excerpt plucked via Washington Post.

By Steven Mufson and Ianthe Jeanne Dugan
Washington Post Staff Writers
Friday, September 25, 1998; Page A01

Scale of Fund's Bad Bets Begins to Emerge as Swiss Bank Reports $650 Million Loss; Work on Rescue Effort Continues........

The banker said the New York Fed officials were concerned not only about the prospect of losses to institutions that had entered into contracts with Long-Term Capital but also at the prospect of a "domino effect" if the sell-off of about $100 billion in market bets placed by Long-Term Capital triggered financial distress at other institutions.

*****AS I SAID YESTERDAY, THE BAILOUT IS ONLY A SHORT TERM SOLUTION.*****

!!! MORE HORROR STORIES COME YOUR WAY SOON !!!
and halloween is a month away too....

It is one month lease rates!!!! See my 12:12 post today.

http://cnnfn.com/quickenonfn/investing/9809/25/q_october/

Excellent catch on The "needy" of Asia. Thx.
-EJ

It's not only the banks funnelling depositor's assets into
gambits, it's government agencies also. FHLBB which has issued
more credit in the bond market this year than the U.S. Treasury
is being called on the carpet for deploying those funds raised
into arbitrage strategies.

Apparently these institutions ostensibly existing to serve
intermediary between savings and productive investment have been
transformed into vehicles for investment joyriding around the
casino.

I believe it is one month because it went from .4 to 1.7 you can find it mentioned on that forum right now. There was also discussion this morning and I believe it was on this board.

Unless you're SURE prices will go up. Meantime - buy and quickly turn the stock over for a profit. If you have enough turnover then you can comfortably sit on fair inventory. Buy bullion, turn it into small, high premium pieces and unload 'em. In the next few months the sheople will be hammering down our doors to buy small Gold coins. We must be ready. Why let the coin dealers have all the fun?

We hairless apes with sweet-tooths going back eons will pay a lot for fudge during the dark, destitute days of the Great Depression II. They may not be able to afford more than a bite but they will buy. Frugal types will buy the ingredients {which will sell a stiff premium}.
Maybe more can be made from the above than from Gold or Silver.
How many Silver pieces is a pan of fudge worth - when you have not had a candy bar in months?

investment joyriding around the casino!

'bout sums up the insanity for me....these guys are who millions live and die by.....time to make up our own rules....

I could see a hedge fund manager swinging off every pole on WALL STREET!

"If you've had a turbulent August/September period," Rusca said, "It's less likely you're going to get sucker-punched in October."

More wishful thinking. Pessimism is bullish at the bottom of a bear market, but we're at the hairy edge of a bear market, and the mood has turned bearish.

October will make September look like fun in the sun for Wall Street.

Boom, bang, bing. The machine has chunks of split bearing in the gears.

-EJ

sideshow compared to the gold carry. The gold carry works in only
one direction........down. When the gold carry unwinds, there are
two scenarios:

1. The shorts scramble to cover their positions as they perceive
POG firming despite constant shorting. They cover initially
with leased gold from multiple CBs. This causes lease rates
to rise and the subsequent shorting quenches the bull. The
shorts then cover and replace the borrowed gold. I think this
is what happened in Mar-Apr of this year in the false bottom and
rally. Lease rates rose and peaked at 3.5%, but for only one
day. The CBs helped with false rumors of CB gold sales, and
swaps. DEAD GOLD BULL If the lease rates go past 3% ( assuming
the Fed drops interest rates by .5%, then the CBs lose control,
and the narrowing profit margins turn off the gold carry and the
BULL LIVES!

2. The CB decide they have lent to their capacity, or that they want
the POG to rise for political reasons ( like the EURO entry )
they raise lease rates arbitrarily, or simply stop leasing.
The gold carry is turned off, and market forces ( including the
gold carry short overhang ) kill the bear and the BULL ROARS.
This is the bear trap that Farfel so oft referred to.

Maybe, but the sticks been pulled back and it all just depends on whether we make it over next few ridges or not. So far we've hit a few branches but no solid trunks.

No bull market has ever begun when things looked rosy, nor has any bear market begun when things looked terrible.

I would say right now things look terrible....

last Friday, Sept 18, one month leases were 0.42%, up slightly
from .36% the week before. If one month leases are now 1.7%, then this
satisfies the requirement of leases rapidly rising past 1% to
initiate the bull.

IF ONE MONTH LEASE RATES ARE NOW 1.7%, THEN I AGREE, THE GOLD BULL
HAS BEGUN.

"October. This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August and February."

Mark Twin Pudd'nhead Wilson ch 13.

ne'er the twin shall meet
I meant Twain, as in Clemens, Samuel Langhorne ( 1835-1910 )

I don't see anything out there in equity or bond markets
domestic or abroad that isn't being moved by hot money
seeking temporary home.

http://biz.yahoo.com/rf/980925/bci.html

Wallstreet Week is blasting hedge funds and the recent NY Fed bailout.

HighRise

hmmmmmmm......

The world will probably have ANOTHER form of currency by then.......or it won't even rely on currency ( it will exist as something else ) . The world will be a DRASTICALLY different place. No worries mate ;- ) Our children and our childrens children will adapt......what choice have they? Live or die..........

But......gold will still be around.....more of it............used for jewelry and various other trinkets. And it's value will be the same.............and ( some ) kitcoites will still be calling it to skyrocket to 30,000+.......... ( won't happen ) ...................uh uh.

Gold will ALWAYS have it's allure......perhaps.

away...to wait for spud to have a word ;- )



ANOTHER fine 'Merkin.

mike sheller...
the stars are the guide to the future...looking
at the past....iran and the ghani's are fixing to rumble...
casa ibn saud has its' days numbered....tet will be a joke
compared to this changing of the guard.....

black gold......manipulated.....yet free as a bird....
free to fly with the vagaries of greed of avarice.....
it will lead the golden one to the aerie on high.......
oil, with gold and ALL other commodities riding on
the dark ones' back.........due to.....

WAR!.......

regardless of irregardless not being in the dictionary....
and not being a 'proper' word....

gold will fly high.....due to war.
oil will lead the way......due to war.
the crb will cut a chunk out of the moon en-route to europa..due to war.
....................and chaotic weather.

the smoke signals are choking those whose nose chose to attenuate the signal..inhale, and admit it!

CHOP-ASAKI!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!....

cherokee!;...in.s.texas....looking.for.azau.in.octillo.springs...!;...

http://www.smh.com.au:80/news/9809/25/text/business4.html

lease rates rose overnight from .4% to 1.7% I do believe that qualifies
as a rapid rise of leases past 1%. If this figure is accurate,
THE GOLD BULL HAS BEGUN TO ROAR.

If the Fed drops interest rates to 5.25%, then the CBs lose
control at one month leases of 3.25% as the gold carry shuts
down. The CBs still have control yet, but the lease rate
spike indicates they are now struggling. They begin to worry
about the safety of their gold. They demand greater security,
greater rates. The shorts are scrambling to borrow gold to
dump on the head of the emerging bull.

Gold flatlined to slightly dropped today. But lease rates rose
to 1.7% from .4% Don't kid yourself. GOLD ROARED TODAY, BUT IT
ALL WENT INTO A CHANGE IN LEASE RATES, NOT SPOT. Sweat was
running out from under the office doors of CB presidents and hedge
fund CEOs.

ubs and more....

http://www.aci.net/kalliste/

Mark was Samuel's twin.

Reading the Missoulian ON-line***Canyon fined $330K for violations
on Kendall property.

Clock starts ticking****Canyon Resources has 17 months to get EIS
study going again or will lose the lease according to the Missoulian

Canyon already owes state $500K for past work done on McDonald
property. This isn't going to help Canyon with the anti-cyanide crowd
voting on November ballot. With Canyon already on the shitty with
the state they need to gold makes its move to the big 350 quick.

Being a shareholder I would appreaciate if anybody has any more info
on Canyons $cash on hand

http://nt.excite.com:80/news/bw/980925/diversified-envrnmentl

And he's not going to lease his way out of trouble cheaply either...

From my 9/15 to Spanky - bears repeating:

Calendar days to watch -
Afghanistan - September 30, October 5
Iran - September 16 - 27 especially around the 25th
NYSE, Clinton, USA - end of Sept, 1st week October, Especially Oct 1-3

Chopasaki!

The rapid rise in the lease rate which has been low thru this rally indicates a demand for gold either to sell short OR cover. Based on today's price action which do you think was operative? ANS They borrowed frantically to suppress the price.

re DVEV - Wish I'd though o' that.

Great name for a ming man - Schmelter.

Donald
I don't know whether the Missoulian is run by enviromentalists or whether
their views reflects Montana's view on mining PM's in their state. I do not know how close the vote was on the last time the cyanide ban was on the ballot but I'd be holding off on any company with alot of Montana gold holdings until after the vote. I've been trying to see if there are alot of commercials being run on television this early supporting the ban to gauge the amount of money behind them but I don't know anyone in
the big sky country

http://www.nypostonline.com:80/092598/business/5849.htm

Where is Allen ( USA ) ? I remember him posting some weeks ago that he felt this derivatives thing was beggining to unravel and that equities were just the backdrop of a much bigger problem. I don't know what will happen, but anyone that thinks '29 can't happen again is a fool.

Recieved the Association for Investor Awareness ( A.I.A. ) designation for
providing investor information.

ok people, I'm only 10% away from regaining the 50% shotgun blast loss
I took in August ( kept saying "It can't go any lower, can it?" ) . LOL,
Now fully back in with HM, BMG, DROOY, & BGO. So I'm expecting any of
you with any cash available to buy lots of the aforementioned stocks!!!

crazytimes-- you got an SI membership, you wanna relay
something for me to Ray DeMoss on the Murphy thread?

To wit:

Hey Ray, how do you rate. Only times I got my name in
the paper was municipal court!

No problem...I've got his email address. I'll be glad to send....

My intuition is telling me this thing is going lower pretty soon. You hear a bunch of stuff and it sounds bad, then you hear contrarian indicators to confuse the whole thing - put/call ratio is bullish, we've had a "capitulation" day where the market got really scared, we've established a trading range through multiple re-tests, etc, etc, etc. All these analysts don't mean a hill of beans - if they had been right, then they would have been in cash come the later part of July, and they would have shorted everything under the sky. Sure, looking back on it they can all explain it, but how many of them made money when it happened ? I'm betting not that many. Not that far down the road people will be looking back saying "Of course it went lower, it was so obvious it was going to, all the signs were there", and they'll be saying it while adding up their losses, 'tis the way of things I guess. Same people a year from now will be saying "Of course Gold went up, it was so cheap, everyone should have been buying it", while they're looking at YHOO stock that's finally trading at 5$US/share. Everybody knows where we're headed, but people are afraid to trade on their gut, they trade instead on silly indicators and what they see on television. Good luck to us all.

Great post. How very true.

comex silver stocks down to 72,000,000 ( down about 5-6 million for week ) . sure seems like this might cause or has caused some speculative fever; and hecla and coeur still on the bottom. any thoughts on whether this is real. i am already loaded up and prepared to wait long term ( gold and silver ) , but am i missing something here?

CH-- and thanks.

Some posts I made back in Febuary when Gold was ABOVE $300!!! And some reaction back then!!!

Date: Mon Feb 16 1998 08:45
glenn ( My Two Cents ) ID#376309:
Spot Gold will break $280.00 before it breaks $320.00!


Date: Mon Feb 16 1998 08:54
STUDIO.R ( @glenn.....here's my two cents worth re: gold price..... ) ID#93232:
- -


Date: Mon Feb 16 1998 08:59
Poorboys ( Glenn Wake up!! Have you seen the Options ? ) ID#224149:
250,000,000,000 And rising ---No End to the SHEEP----Like the Bunny Battery----and then some ---Take a ride on the Reading ---If you pass -----Go------ collect ---

As far as my charts say. We did break $280 before $320 spot!
We may go back up in a week or so but remember, eventually we will break $250!

True, but how many bull markets have begun at the end of 18 year bull markets with equities trading at huge P/E multiples of earnings growth rates and cockroaches crawling around all over the place?
-EJ

So Short the F outta it bud!!

Not many. Besides, we still have an awfully lot of unwinding yet to do. Even the markets that don't end in a depression don't turn on a dime. There's a lot wood left to cut with the ol' whipsaw.

``The greatest worry on Wall Street is the fund's equity derivatives portfolio,''

Long-Term Capital starts asset sales

By Apu Sikri

NEW YORK, Sept 25 ( Reuters ) - Long-Term Capital Management LP, on life support with a $3.5 billion capital infusion, began selling off assets on Friday in a bid to stay alive, but bankers warned the liquidation will be a long and tortuous process.

The Greenwich, Conn.-based fund, run by bond whiz and former Salomon Brothers Vice Chairman John Meriwether, put its most liquid assets on the block, selling Danish government and mortgage bonds and other European securities.

A consortium of 14 banks overseeing the fund and reorganizing its portfolio said in a statement that they aim ``over time, to reduce excessive risk exposures and leverage, return capital to the participants and to realize the potential value of the portfolio.''

Financial stocks from Zurich to New York fell on concern that the full extent of the damage -- both to Long-Term Capital's creditors and to other hedge funds that followed similar strategies -- was not yet known.

Treasury Secretary Robert Rubin called for the Treasury, the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission and other agencies to review hedge funds following Long-Term Capital's bailout.

``I have asked that the staffs of the constituent agencies prepare a study of the potential implications of the operations of firms such as Long-Term Capital and their relationships with their creditors,'' Rubin said in a statement.

Rubin, along with Fed Chairman Alan Greenspan and New York Fed President William McDonough are expected to testify before Congress next week on the Long-Term Capital bailout and the risks of other hedge funds, a Congressional aide said on Friday.

Early on Friday, credit rating agencies Moody's Investors Service Inc. and Standard & Poor's Corp. said they were reviewing all major U.S. and European banks for possible downgrade.

``We're scrutinizing every bank with emerging markets exposures, hedge fund exposures and other types of risky assets that could be impacted by these huge market movements,'' said Christopher Mahoney, managing director at Moody's.

Long-Term's troubles raised concerns banks would pull back from all but the highest-quality borrowers, triggering a worldwide liquidity crunch.

``The credit cycle has definitely turned,'' said Tanya Azarchs, director at Standard & Poor's.

Standard & Poor's took the first shot at banks on Friday by cutting its rating on Bankers Trust Corp. senior debt to A-minus from A. It cited the bank's heavy dealings with riskier clients.

As banks and brokerages realign their securities portfolios to reflect a risk-averse global financial environment, major western bond markets seem to be holding strong.

U.S. Treasuries were also higher late Friday.

``There was an ongoing small liquidation centering around Denmark from sales clearly associated with the ( Long-Term ) fund,'' said Neil Ellerbeck, portfolio manager at Chase Asset Management in London. But ``overall, the European bond markets are in good shape and can absorb the supply,'' he said.

Several European banks have already taken hits from investments in Long-Term Capital. Dresdner Bank AG ( quote from Yahoo! UK & Ireland: DRSD.F ) said it would take a charge of $144 million from a stake in the fund. CS Group said it had a loss of $55 million from counterparty exposure in a trading position.

The announcements came after UBS AG said it had lost $685 million from its equity stake in Long-Term.

The greatest difficulty in disposing of the assets of Long-Term Capital will be in equity derivatives. Long-Term made aggressive bets on financial contracts linked to stock market indices, such as Japan's Nikkei-225 index, bankers said.

``The greatest worry on Wall Street is the fund's equity derivatives portfolio,'' said a banker who did not want to be identified.

But even as the fund and its bankers struggled to contain the damage, a fierce debate was raging in U.S. financial markets about the wisdom of a rescue package that raises questions about the integrity of free markets and ultimately may succeed only in prolonging the agony of the hedge fund and the financial markets at large.

``It sends very questionable signals about our markets. We tell other countries that capital cronyism is bad and then we do something similar,'' said Richard Schwartz, who oversees $22 billion in bonds at New York Life Asset Management.

``We would have had some dislocation for a month or two, but then the markets would have returned to normal,'' he said.

Long-Term suffered large losses in the last two months amid market turmoil aggravated by Russia's default on domestic debt last month.

As the fund's losses neared 90 percent of a capital base of nearly $5 billion, the Federal Reserve Bank of New York convened a meeting of top banks to provide the hedge fund with a new infusion of capital. The bank regulator feared a domino effect with huge losses among the largest banks.

The fund's partners include Nobel laureate economists Myron Scholes and Robert Merton and former Federal Reserve Vice Chairman David Mullins.

Getting crowded.

The difference between another '29 and not is razor thin. Even '87 wasn't as similar to '29 as we are. This is a GLOBAL situation just like '29.

The call could go either way.

1. Astrological -- If the moon passes someone's Uranus, figure that
will stink & will sell.

2. Technical ----- Will make a chart based on the various appendages
on my body. Will be using the "Head & Shoulders" chart reversed.
That would be the "Kneecaps & Crotch" chart. Will be looking for
a little head, if that happens, common sense dictates that the
combination of the small head & big head together predicts a raging
bull market in whatever I do.

3. Fundamentals --- Who looks at those?

All in fun yall, really do enjoy & learn a lot from all of you.

today was in response to shorts borrowing gold to short the rise
in the POG with the aim to stop it. They did. Don't kid yourself,
the gold bull roared today. The action was not showing up in POG.
Rather the roar was absorbed into an appreciation of lease rates.

I think we shall now test $300, and if we breach that, 315 is
the next resistance level. This was the level that stopped
the spring bull. I think you will see lease rates of 3% plus
when we get that high. With prime about to be lowered to 5.25%,
then the gold carry terminates at 3.25% lease rates for one month gold.

The curious thing this time, is if the CBs succeed in manipulating
gold back down this time, it will be tantmount to driving the world
into depression. Greenspan knows! Lowering interest rates also
destroys the gold carry. Right now we have lease rates rising, and
Greenspan is hinting about lowering interest rates. This is the
best of possible conditions for gold.

Has anybody seen leasing rates for silver?

Correctness of predictions is not a determination of MANLINESS.

We either get deflation...glenn's correct... or we get inflation...others are correct.

Thing that bothers me is even with deflation bonds may fail if the almighty gobermnt DEFAULTS. Then what do you have unless you got physical.

glenn...lighten up...time tells all...your record speaks for itself...

Tom

I don't believe your intuition is lying to you. There is one helluva bunch money wound into treasuries from the carry trades, flight money, speculators and investors.

The bond markets have about 200 times the capitalization of the equity markets. And....the leveraging in the bond and treasury arena is at much higher factors than in the equity markets.

When rates are raised, these holders will think they have made some great windfall profits. The trouble will come after when they all try to cash in and deleverage.....

APH - I saw your post last night about wanting to short Dec gold between 302 and 305. I thought to myself that we were a long way from that point so it was an interesting idea! I awoke this morning to see gold quoted at 302! and Dec silver at 525 which was your original target. I thought about you and then about the rest of the Kitco friends and their ideas and comments. While I was busy reflecting upon world events and the like, our brethern Glenn and his compatriots were shorting the bewhatitz out of the gap up in gold. I watched all day with amazement. Both schools of thought are correct. Your's and Glenn's in the very short term in selling an overbought market and those of most of the Kitco group of seeing a sea change in the total investment outlook. For once, everyone on this group is right ( frankly that scares me! )

For the second time in a few weeks one of this group has been quoted in the WSJ! Gee, in the old days, we used to say when Walter Cronkite was announcing the price change in gold on the nightly new, that it must be the top of the move! Now are we to apply the same criteria to our Kitco brethern? My God Bart, what have you created? The last bastion of the gold bugs? Cut out all of the rancor on this site amongst us, my friends, our time has come!

Using Bank for International Settlement figures, this strategist estimated that the world's biggest banks have lent more than 129 percent of their capital to global emerging markets, and so far about 30 percent of those loans are non-performing.

``If it's 30 percent, we've just wiped out half the world's bank capital. And half the world's bank capital is $623 billion,'' he said, to stress the severity of the impending credit crunch. ``This is all very
much back of the envelope but that's 70 percent of U.S. ( gross domestic product ) .''

So pretty soon "The Fed" will anounce it has been buying equities in order to prop up the DOW, to avoid "The Domino Effect" contagion that
would have brought down the biggest US banks and brockerages due to extreme-risk positions held in equity derivatives taken to to raise earnings and increase shareholder value , Yes?

Mighty Oaks from little acorns grow..Kneecaps & Crotches Har Har...

We shall watch this crotch together, yes?

Some time ago the assembled sages@kitco were chasing a gold chicken standard, Oak, it may yet fly, this golden chicken...

ARe you able to use your acorns to divine anything of this market? Divining sticks were once used by magicians to find gold, I have that on good authority, but I believe they used Willow not Oak, I may be corrected.

Overheard on my very fine tuned Citizen Band Radio that picks
up cell telephone calls:

Mr. Rubin----- this is Bill Clinton, the President of the United States.
I have on my desk a blank, signed bank draft that I want you to use
first thing Monday morning to buy S & P 500 Calls.

Come pick it up, and fill in the blanks. The US equity market must
be supported in this time of crisis.

But Mr. President------We only have 35 billion left, and this derivative
problem may take trillions. How can we possibly bail out all the banks
in the world?

Look Robert-----My Presidency depends on a strong economy. A
market crash right now would send my popularity polls plunging. I order
you now to get your ass over here pronto; pick up this check, and use
every last dime if you have to, in order to prevent the imminent collapse of our
markets Monday morning. I only have two years to go, and if I can just
prop up this market for a little while longer perhaps I can avoid
impeachment. It's my ass on the line Robert, not yours. Now do as
you are ordered or I will release your FBI file you piece of sh-t.

I really don't give a rats ass about what happens after I leave office.
DO YOU UNDERSTAND?

Yes---Mr. President.

Good post. Fort Apache, Kitco.

Arden: I must have missed the WSJ quotes. *pout*

Gollum: If I'm right, I'll pick you up in my new sports car, if not, I'm out my original July gambling money.

What a windfall for Clinton ( pardon the pun ) . Georges may allow him to 'GIVE' money to 4 states at one time, and be such a hero.

Whoa!! Discovered a Fundamental!! A blow to the acorns causes much
distress & tends to take the wind from one's sails. OOOOOOoooooooo!
Need to take a break. *startling revelations in the stars I'm seeing*

Haha, good one!

down on gold to force it to $250. What good will it do you if you can't buy any ?

Gollum - perhaps this Fort Apache inhabitants should wear gold ribbons!

Greenspan was in DC entertaining your Congress while his boys in NY were coniving to save the old friends at LTCM, years earlier Mr. Al Capone was entertaing the local police chief at his Florida ( digs ) Mansion while the St. Valentines Day Massacre went off in ole Chicago, but old Al had a rule -ONLY SCREW WITH THOSE WHO SCREW WITH YOU- and those bankers screw everyone; end of transmission.

i remember reading years ago John Kenneth Galbraiths thesis on the great depression. to make a long story short: he maintained the cause was a sort of pyramid scheme: companies whose only assets were the shares in other companies and of course very liberal margin accounts. i think the present day situation is similiar, if you think of the hollow companies in much of the world, caused by a lack of transparency and of course the amazing worlds of derivatives and leverage. if this is so, we may need to literally unwind the entire world

Great! Don't forget, it's not all down hill. There might just be a wee bit of volatility twixt here and there.

Another take on Greenspan

"When the history books are written, Alan Greenspan will go down as the most incompetent and irresponsible Fed chairman of all time. This guy's career at the Fed has been nothing but misreading the situation and ultimately having to ease a ton. Now we have reached a point of no return, as financial systems and bubbles around the world are imploding, and we are easing yet again.
I know many people would say that of course, we must ease. The problem is, at the same moment you are trying to undo the damage from the bursting of the bubble you've created - by easing before people can feel the pain - you foment MORE speculation. I had believed that Greenspan understood the situation and would not ease until after speculators had taken more pain. I should know better: EVERY time I think he might actually do the prudent thing, I am wrong.
Obviously he is panicked about the situation because if you look at his history - and I have studied it very carefully - he has a tendency to react ONLY after it is obvious what is going on. He is very spooked by what he sees coming next and therefore he has taken the precaution of easing before there are any major disruptions here in America.
The problem is, now the speculators are going to get drunk all over again and more sheep will get sucked into the market. He has created financial addicts who need another "hit" of easy money so they don't have to go through withdrawals. I don't know how long or how far this rally will carry, but you should SELL into it. This is the last chance to get out at GREAT prices.
After today, the S&P 500 is up 10 percent on the year. It is hard to make the point that we are in major financial pain here in the United States. I believe there is major trouble coming, but you certainly can't make the case that it is here and now. After all, Alan Greenspan wants to see the whites in everyone's eyes before he does anything resembling tightening - why should we get a preemptive easing? The guy is going to cost many people a lot of money and a lot of jobs. By the year 2000, people won't have many nice things to say about this yo-yo."

From Contrarian's site

Cool. This ol' Fort Apache denizen, though, much prefers camoflage and low profile.

arden
For the second time in a few weeks one of this group has been quoted in the WSJ!

Please,would you post that here for those of us who don't subscribe? Who else was quoted?

Do you remember when Andy Smith quoted the Antipodean Contrarian Newsletter? You don't see publications like that any more.

http://www.intellectualcapital.com/issues/98/0924/icbusiness4.asp

will be found floating belly up soon??? Who's going to rescue the banks who just rescued the fund ?

Hedge fund fears grow

Equity markets fall sharply on worries Long-Term Capital Management may be only the first to fall. The impact on other funds, brokerages and U.S. banks is unknown

By AMANDA LANG
New York Bureau The Financial Post
The 11th-hour bailout of New York hedge fund Long-Term Capital Management LP is just the thin edge of the wedge, traders warned yesterday, and other funds could also be in danger of collapse.
That could mean a massive shakeout as funds with highly leveraged positions that have turned sour face mounting pressure from their lenders.
What is less clear is how that shakeout might affect brokerages, investment dealers and even some of the largest banks in the U.S., all of which are tied to the funds in intricate loan and trading relationships. That uncertainty sent equities down sharply yesterday, despite renewed optimism the U.S. Federal Reserve may be contemplating an interest rate cut.
Wednesday's bailout plan for Long-Term Capital, cobbled together by the Federal Reserve Bank of New York and a who's who of banking elite on Wall Street, is an indication even the best bankers in the U.S. aren't sure what effect such a failure might have. None of them seems to want to find out, however.
Long-Term Capital, run by former Salomon Brothers Inc. bond trader John Meriwether, is not the largest hedge fund in the U.S., but it is one of the most aggressive and has been a Wall Street favorite, reportedly producing annual gains of 41% in 1996 and 17% in 1997.
It uses highly leveraged investments to create those gains, but that level of debt  up to 26 times its assets of about US$4.8 billion at the start of this year  threatened to push the firm into bankruptcy unless it was bailed out fast.
Such firms as Goldman Sachs & Co., Merrill Lynch & Co., UBS Securities Inc. and about 14 others agreed to inject US$3.5 billion in Long-Term Capital to cover claims made by its lenders.
In return, the group will have a large equity position in Long-Term Capital, and a handful of advisers will begin managing the fund's investments.
In a statement late Wednesday, Long-Term Capital said the cash infusion might help it recover some of its losses on high-risk bond investments. Just a few weeks ago, it tried to solicit additional capital from existing investors, as well as from outsiders that reportedly included U.S. financier George Soros, head of Soros Fund Management.
In a Sept. 2 letter to investors, it said it had lost US$2.5 billion, or 52% of its net assets, year to date. At that time it was believed to have US$2.3 billion in assets with about US$90 billion in trading positions.
The new injection of capital is expected to raise the value of its assets to a little more than US$4 billion.
Sources on Wall Street said yesterday as many as half a dozen other large hedge funds  those with more than US$500 million in assets under management  could be headed for a fall.
At the beginning of September, Soros's US$22-billion fund had lost US$2 billion over the previous year in Russian investments.
In August, Texas-based fund manager Dana McGinnis became one of the first to wave the white flag: he put the three hedge funds he runs under bankruptcy protection after lenders made a margin call  a request for cash against the US$200 million he had borrowed to buy Russian debt  after Russia defaulted on US$40 billion in ruble-denominated debt.
The problem was exacerbated for hedge funds because in Russia hedging was not easy, so investments in Russian bonds were essentially a one-way bet on prices.
Still unclear is how severe an impact hedge fund failures might have on the banks and investment firms that lend to the funds and trade their positions.
Hedge funds almost always are private limited partnerships and as such, do not publish detailed reports of their investments. They are not regulated the way mutual funds are, and there is no limit on the amount of leverage they can use, or the size of any one investment.
Steven Lonsdorf, president of Van Hedge Fund Advisors International, said Long-Term Capital's plight will probably force regulators to look at the rules governing hedge funds.
In addition, banks might find themselves subject to new regulations about the amount of leverage they can extend to any one client.
"Banks probably have substantial exposure" to risk of default by the funds, Lonsdorf said. In Long-Term Capital's case, it had credit lines with most major banks and brokerage houses in the U.S.
"Obviously they are not the only hedge fund that engages in these strategies."
Funds generally pay 20% of any partnership profits to their managers, and also tend to make investments designed to limit risk. For instance, while buying equities long, a fund might hedge by shorting Standard & Poor's futures.
While most funds use some kind of computer analysis to invest, some are more exclusively quantitative, while others, like Soros's fund, make fundamental gambles on price movements of such things as oil or gold.
Not all hedge funds are leveraged, Lonsdorf said. In fact, in Van's database of 2,600 hedge funds worldwide, about one-third use no leverage at all in their investments. About 54% use low leverage, defined as a ratio of less than 2 to 1 against its assets, while 16% use high, defined as a ratio greater than 2. With leverage as high as 26 to 1, Long-Term Capital was in a very small class.
"That is asking for trouble in volatile markets like these," Lonsdorf said, referring to market behavior that does not fit historical patterns.
He said the Fed or other regulators could look more closely at banks in future, and could also require hedge funds to make more complete disclosures.
A Fed spokesman declined to comment.
While fallout from Russia continues, one danger that still looms for hedge funds and banks is their exposure to Latin America, which could be contaminated by the economic turmoil in Southeast Asia and Russia.
At the end of the first quarter, U.S. banks' exposure to Latin America was US$76.4 billion, according to the Fed. That's 10 times their exposure to Russia.
Those figures capture commercial lending and other conventional forms of credit. They do not include lending to hedge funds, something that now has some experts worried.
Brazil may be of biggest concern. Its stock market has fallen 32.5% this year, and interest rates have risen sharply. U.S. banks have a US$27.2-billion exposure in Brazil.
But unlike Russia, Latin American countries are not likely to default on their government debt.


On the other hand, it might depend on his agenda which we are not neccesarily privy to.

We hear a lot about the big losses and hedge funds that go belly up. Every deal, though, has two ends. What do we hear about the big windfalls and the guys who end up with the marbles?

moa: I am just as much a gold bug as you are -- except for one thing -- I want to make money in precious metals slowly, with intact markets. I know that -- if for example -- gold doubled tomorrow - it would probably mean our fiat currency system had melted down completely. And the derivatives markets as well -- for both winners and losers. Forget those winning option or futures trades.

I really don't think you want that -- because that would almost certainly mean a world-wide depression. And -- if you had any money in any equities -- even gold equities, you could kiss it goodbye. You would probably lose your job, and if you had any debt you would have to pay it off. Further, if you had any savings outside your own physical possession, you would have to kiss that googbye as well!

Just how long could you live only on what you have stuffed in your mattress?

Moa: this is why I want to make money in gold -- slowly. AG et al may be able to pull this off, and if he does, I will make alot more money investing in precious metals and precious metals equities than if you get your wish. Your investments would probably also benefit by a delayed rise in gold -- you would have more savings to buy it.

If AG steps down for any reason, we may very well be in serious trouble, as I doubt anyone else in the wings has the skills he has. Any thought about what might happen to the FED around y2k if their finely oiled fiat currency machine falters?

Don't blame AG for our fiat currency. He would also like to go back to the true gold standard we had before the 1900's. The worlds financial system was more stable than it is now. But -- it is too late for that, and the fiat currency hand must be played out, whether we like it or not. Fast or slow -- the outcome will be the same, eventually. I vote for slow, even if that means the illusions and corruption of our current economic system persists a bit longer. If I were alone in this world, I might prefer to get it over with. But I am not, and alot of innocents less prepared than I would suffer. There is much suffering already, with 1/3 of the world in a depression. But if the other 2/3 goes, there will be noone to pick up the pieces and start over.

Then our depression will be much longer -- and all will suffer longer. Do you really want everyone in the world to go through what Russia is going through right now? I am preparing for that eventuality -- subsistence farming would be a necessity -- and others will need access to knowledge about such matters. But I will be quite happy not to have to disseminate this kind of knowledge. As the result of being an ( experimental ) physicist I also can fix just about anything, and I know full well how important that survival skill is. Ever been to Utah? In virtually every other state most Americans have lost the skills of self sufficiency, although it persists in rural areas. Got a Chevy?

Am I right in assuming from what I have read over the last 36 hours that the hedge funds in general have been betting on the Interest rates to raise rather than fall.

If this is correct, can AG afford to lower interest rates without causing further hedge funds to come under pressure.

Let me know if this makes sense or is just talking sh%t

Statistically speaking, you are correct. I take it you too are a random walker. Even the random walk theory has a loophole, tho. Sometimes systemic risk goes nonlinear.
-EJ

Good post.

What really boggles my mind, is that what the Fed did was slightly delay the enevitable. Anyone who thinks that this is somehow fixing this problem is nuts. IMHO, the Fed had to do what they did with LTCM, lest the global meltdown would have started today, instead of say a week or two from today! This is the tip of the iceberg if you ask me.

The hedge funds do not necessarily bet on interest rates to go up or down. They bet that whichever way they gi they will stay within historical parameters. They then take a hedged position to protect themselves from any excursions and at the same time make money off the spread in return between different financial instruements.

They are not fond of inverted yield curves.

What you want doesn't necessarily come to pass.

Wishing does not make it so. We don't shape events
here at Kitco. Get real.

Let me ask this question of the group. If you had $2,500 in a self-directed 401 ( k ) account to invest on Monday where would you put it? I am faced with the dilemna and frankly and not sure whether to go with gold shares, growth shares or money market to see have things pan out. Any thoughts you all?

Your 22:46
There is a right way and a wrong way in everything, even in financial matters. The current system is doomed. We just don't know when.
Your post hints of little concern for future generations. You would like to prolong the farce as long as it benefits you financialy. It CANT last it can only be delayed. The longer its delayed, the bigger the pain.

Easy and steady as she goes up. While I'd like the satisfaction of being right soon with these precious metal investments, I concur with you we will make more moeny and be able to enjoy it if the path is smooth on the upside. However, I am affraid it won't be. In fact my personal long gevity probably depends on paying less attention. But you know, what is more exciting, interesting and stimulating than participating in this huge real life poker game.

But as a poster on another board noted: I'm not married to these stocks, I'm married to my wife.

ENVY - according to my best sources, both Steve Kaplan and Ray DeMoss have been quoted in the Wall Street Journal in the past few weeks. I have met and know each of these men from the Kitco site. I guess my point is that Bart has provided us all with a place to exchange ideas. Much has happened here since I first joined over two years ago. At times, when gold has been going down and almost everyone has been losing money or at least their pride, discussions have been rather nasty at times. But, now, when the tide is turning our way, lets rally around the flag! Realistic, leave Steve Puetz alone. He is entitled to his opinion and has the guts to post it here. Give him the respect he deserves for his courage at least, if not his ideas. Any person who has the gumption to stand up and state his beliefs on this site is deserving of respect and proper discussion without malice or regard to race or religion. Bart has given us a site to express our individual views which costs each of us nothing! We should all treat this privilege accordingly. If you want to buy products that Bart offers, then you should support that. If you do not participate in those products, then thats is ok, but give each and everyone else the same respect that you would want for yourself.

Shek: There are no hard truths, only shades of truth, and opinions. I cannot say that contarian is wrong about AG. All I know is that I am contrarian in my one way, and only seem to really make money when the markets are not doing well. I see too many warts to feel comtortable, and the warts seem to be increasing every day.

I think AG is not in the past, fighting inflation. I think he is afraid of repeating the inflationary mistakes of 1925-1929, when the fledgling FED inflated the US money supply on the urging of desperate European bankers, who had nothing to lose from watching the US market bubble and crash. I think then there was an element of inevitability, as equity from all over the world had fled to the US markets.

So -- what would you do if you were AG? Lower rates? Or let the markets do it for you? I don't know. I think before we criticize someone such as he, we ought to walk for a bit in his shoes, and think about what a gold bug might do if he were a FED Chairman. It might not be that much different from what he is doing now. The WJC fiasco is working out perfectly for him, I think, depressing the US markets when they need to be depressed. No one can do anything about the runaway derivatives markets, but hopefully preventing a runaway market bubble like we had in 1929 might ease the pain a bit.

An old Italian proverb:
"Potete chiudere i vostri occhi ai torti mentre la vostra uva si sviluppa, ma finalmente li distrugg la vostri vigna e."

You can close your eyes to wrongs as long as your grapes grow, but the wrongs will eventually destroy you and your vineyard.

Great post, and thanks for the info re: WSJ.

Very interesting thought, and in my opinion quite true. Thanks for the English translation. I would have had some trouble otherwise.

A fractional reserve NON-DEBT fiat system similar to the Tally system, but BALANCED with GOLD!

If leverage in such a system is limited to the banking sector ( fractional reserve banking ) and eliminated, or securely regulated, for the investment sector, this could work! Echoes of Glass-Steagall.

A beginning? ....... Bob in DC.

Sometimes by delaying the inevitable, you can get the bomb disarmed before the fuse burns down. One either makes the attempt or puts his fingers in his ears.

The broad narket has been declining since late March. There have been a few big down ( and up ) days but nothing larger than the 519 point drop in the DOw which was nothing much to speak of when you compare it per centage wise with great market drops of the past. This bull market had all the signs of being a long cruel grinding out proceess ( and might yet be ) instead of a broken cable elevator drop.

Up until Russia. That put a little too much strain on cables already under high tension. At least one hedge fund broke. There may be more. We are not out of the woods yet. The fuse is still burning.

The Fed may not have bought ENOUGH time.

"When the EMU announced that the Euro would have a 15% backing, this
did not sit well with the Europeans. So now the Commission is considering
18%. My guess is that the final result will be 20% to 24% which is based
on surveys done by the European Media."

I have no doubt that this is true IF the Euro is to be a real
currency. If the Euro is just a device to keep the price of gold down
all these years then it does not matter. Gold will rise anyway.

IF the Euro is for real then the biggest effect will be on the $ and
on gold. But I don't think this will take AG by surprise. Who knows what
is really going on with all of this. All I know is that gold is going up,
and that gold stocks are going to make a few people very rich. I plan
to be one of them but on a smaller scale.

I do not care what the Central Bankers do from now on out. The die
has been cast in the prior stock bull market and positions must be
unwound before anything else can happen. This will take 12 to 15 months
and stocks like DROOY will rise to very high levels.

It is silly to try and pick the botton in anything, just be close
enough and you can prosper. The people that try and trade in and out
will get left out at some point when gold gaps up the limit for days
at a time. The stocks will also. There is NO BULL MARKET LIKE A GOLD
BULL MARKET. I have bought DROOY at prices from 2 3/4 to 1 7/8 over the
past 9 months until I have a very large position. I do not trade the stock and will not until much higher prices. It , like others, are a
no lose situation because of what is going on. I don't care if it is
inflation or deflation. Drooy will eventually exceeed its old high of
$50.

DROOY will turn out to be the "Wells Fargo" of the golds. Did any of
you posters predict that Wells Fargo would go to over $300 when it was
trading at $8 in 1982? Of course not. But I believe that the banks and
gold stocks are going to trade places, and since bear markets take a
shorter period of time than bull markets, gold stocks will reach new highs of unimaginable prices within 3 to 5 years.

The reason I say this is because the trades and money flows that
caused the banks to reach historic levels will BE FORCED to trade the
other way and so gold will be the only beneficiary of this change. Silver
will also if there is a bimetalic standard, otherwise it will eventually
get left behind. I don't know what will happen, so most of my investments
are in gold.

Nothing I have seen in the past few weeks, much less the past 30
years in investing, changes in any way what is going to happen. Which leads me to my best point.

It has taken me a long time to realize something: Human beings do not
change. What has happened in the past will happen in the future.
Right now, with Clinton etc., I feel like I am in a combination of
the late 20"s and Germany before it inflated the Mark to 0. From top
to bottom society stinks. The top rules by decree and the bottom goes
along, feeling powerless. Ugly things happen to no avail. Etc. Etc.

So true value will win out. It always has in the past and it will now.
It is a no brainer. But holding on to the top is going to take an
exceptional person. Most of the rest will bail out long before and gain
little.


The war has begun, only the strong will survive. It will be tough.
I am always early so will always keep a position until the end looks
like today in the stock market. Tops take time. Patience can set you
up for life.



Thanks, GD

My one shot with your self directed funds - buy a gold mutual fund with some exposure to South Africa or buy Hecla Mines at 4 1/2.

I am very much impreseed with the size and volumn of the cogenstion zone rising wedge pattern in the S&P between 940 and 1060. APH says he is looking for a quick rally into which to establish a short position. If the market got hit with some bad news ( like every week ) after the rate cut, and we broke down out of that wedge, Peutz could be very right, maybe not in time, maybe not in degree but certainly on the main theme - a very big drop is probable if we fail at 1060 and subsequently fall below 96. IMHO/

Its been a great week, thanks friends.

for the last 18 years in general ( with a few blips to the contrary ) and the last 10 years, there has been very little speculation in the metals mkt. i think this is changing, and could be a bigger variable than even the fundamentals, which many are rightfully focusing on.

arden
Well put ( z )
Thank you for reminding us that we ought to apply THE GOLDEN RULE at this kitco.

It is appropriate at a gold site, indeedy.

I think it depends on how risky you want to get *grin*. If it's "good money" then I usually look first to see if my own business needs it, then I look to see if my family needs it, then I look, etc, etc. If it's "gambling money", then my bet would be on something that could leverage 1 ) a falling dollar 2 ) a falling market 3 ) rising commodities and 4 ) destruction of substantial amounts of "money" ( derivatives ) . What investment is that ? Well, I don't know yet either, I'm still looking. Maybe a precious metals mine in a foreign country that has been especially hurt by the rising dollar, one that could also benefit from lower US interest rates and a rising POG over about a year. Difficult to say and you should never listen to me, I do know that.

Thanks for the suggestion. I think I will go with the gold mutual funds and hope that we are in a real bull and not just the bull dropping of the past few false rallies. However this one feels right to me. Since we are involved with such a touchy feely administration in the White House I guess it is all right to have viceral feelings toward the markets. It won't replace charts but may be in there with astrology.

Shek: How would you like your children see the vinyard destroyed? Suddenly in a nuclear explosion, or more slowly so that they have time to learn more about the realities of life and get away before they are swept up in the maelstom?

My spouse finally sees the light about WJC -- it took years. She voted for him in 1992 and 1996. Now she finally sees him for what he is -- a hypocrite when it comes to women's rights and childrens' rights. Monica is not much more than a child -- emotionally.

Time is a nessary element for people to see the truth for what it is.

I think we were put on this earth to learn, and become wiser. You learn more when you do not return to reality in a flash of light.

Perhaps that vinyard will produce wine again, if it is not too badly damaged. Renewal is also part of that cycle of life.

I don't know.
I believe that there is evidence that suggests that our current system is in a very *critical* situation. I believe that AG and the FED have no room for error. I also believe that the Y2K could add fuel to the fire. The combination could be explosive within 12-15 months.

That is why I lurk around at Kitco. A positive
message of optimism. Not just nailing some other
poster, but telling it like YOU think will be the
ultimate outcome.

If you own DROOY, watch out. I will be right behind
on Monday.

Anyone have or know where I might obtain information on which
mining companies are forward sold ( and are currently selling forward )
& the degree to which they are doing this? Is it listed in their
financials? Also, anyone have figures on the amount of gold mined
this year as opposed to what is going out the doors as coins, manufacturing use, etc.? I remember reading somewhere ( to many of my
memory brain cells died in the 70's. ) that current demand was far
outstripping what was currently being mined. Is that true?

( -10% & holding )

Aurator - I guess my thought about the WSJ is like this. About the time I first bought a computer and found out about the Internet ( thru my son - I am fifty years old ) . Bart started the discussion group on Kitco. Well I have been a regular since that time, sometimes vociferous and at other times learning viewpoints of others. It would appear to me that because of the devastation in gold and gold investments that like minded people have all gravitated to Bart's spot. We have debated, fought, bitched, called each other names, etc. But the bottom line is that when the 'press' looks for a 'goldbug' quote, they find members of our group! Isn't that interesting? You could spend your whole life looking for notoriety, but then you step up to the plate at Kitco and tell people what you think and you are in the WSJ! Honesty is always the best policy.

Shek: How would you like your children see the vinyard destroyed? Suddenly in a nuclear explosion, or more slowly so that they have time to learn more about the realities of life and get away before they are swept up in the maelstom?

My spouse finally sees the light about WJC -- it took years. She voted for him in 1992 and 1996. Now she finally sees him for what he is -- a hypocrite when it comes to women's rights and childrens' rights. Monica is not much more than a child -- emotionally.

Time is a necssary element for people to see the truth for what it is.

I think we were put on this earth to learn, and become wiser. You learn more when you do not return to reality in a flash of light.

Perhaps that vinyard will produce wine again, if it is not too badly damaged. Renewal is also part of that cycle of life.

one nice thing about this rally, is that many of my juniors seem to have overhangs that are getting cleared out and then they pop up like a cork.

"... Then our depression will be much longer -- and all will suffer longer. ..."

Every day the current system continues, idiots get rich while prudent people get robbed. Example: running up credit card and buying stocks. If it does not work out, you declare bankruptcy.


"... In virtually every other state most Americans have lost the skills of self-sufficiency, although it persists in rural areas. ..."

Funny thing you should mention rural areas. The cornerstone of the dollar fraud is manipulation of commodities, agricultural especially ( in order to pretend dollar is worth something ) . This has totally devastated farmers ( the only self-sufficient people remaining in the US ) . You have proud, honest, productive people being destroyed by the system, while bums are getting rich. Yes, if you participated in the system and borrowed as much as you could to "invest" in what the system told you to invest, you did get rich.


"... Do you really want everyone in the world to go through what Russia is going through right now? I am preparing for that eventuality. ..."

Nobody deserves more to go through what Russians are going through more than the Americans. Many Russians risked their lives and the lives of their families to bring down their insane system. The reward: US government sends IMF to educate elite in the art of fake money and IRS in the art of abusing the little guy. The fall of USSR, rather than bring shift toward sanity in the USA, brought us the "omnipotent USA," master-of-the-universe, and 80+ tomahawks flying after pervert-in-chief gets caught with his pants down.


"... Ever been to Utah? ..."

Own a whole mountain there. Among many necessities there is a bottle of fine champagne waiting for the day the system will no longer be able to feed all its followers and be set on fire by them.

"... Then our depression will be much longer -- and all will suffer longer. ..."

Every day the current system continues, idiots get rich while prudent people get robbed. Example: running up credit card and buying stocks. If it does not work out, you declare bankruptcy.


"... In virtually every other state most Americans have lost the skills of self-sufficiency, although it persists in rural areas. ..."

Funny thing you should mention rural areas. The cornerstone of the dollar fraud is manipulation of commodities, agricultural especially ( in order to pretend dollar is worth something ) . This has totally devastated farmers ( the only self-sufficient people remaining in the US ) . You have proud, honest, productive people being destroyed by the system, while bums are getting rich. Yes, if you participated in the system and borrowed as much as you could to "invest" in what the system told you to invest, you did get rich.


"... Do you really want everyone in the world to go through what Russia is going through right now? I am preparing for that eventuality. ..."

Nobody deserves more to go through what Russians are going through more than the Americans. Many Russians risked their lives and the lives of their families to bring down their insane system. The reward: US government sends IMF to educate elite in the art of fake money and IRS in the art of abusing the little guy. The fall of USSR, rather than bring shift toward sanity in the USA, brought us the "omnipotent USA," master-of-the-universe, and 80+ tomahawks flying after pervert-in-chief gets caught with his pants down.


"... Ever been to Utah? ..."

Own a whole mountain there. Among many necessities there is a bottle of fine champagne waiting for the day the system will no longer be able to feed all its followers and be set on fire by them.

Got that from my Italian uncle. Not sure if I spelled it right.

Let me get this straight.

They took $4 billion in capital and leveredged it into $100 billion in investment positions.

Their investments turn against them and become worth $96 billion.

All capital is gone and the banks which lent/own the remaining $96 billion start to worry and call for more margins.

As LTCM starts to liquidate it's positions, markets begin to erode and it becomes obvious that the size of the fund will CAUSE the markets to become hostile to liquidation.

The Federal Reserve brokers a bailout by the largest banks in the country whereby they recapitalize the lost $4 billion and become owners of this overleveredged hedge fund. This is done for the stability of the markets.

The markets react by doing nothing, not realizing that $96 billion in investments MUST be liquidated due to banking regulations. If not immediately in a fire sale then in an "orderly" fashion. By the end of the fiscal year for accounting and reguatory reasons?

When do market participants realize that the first one out gets to leave with all their dough, last one out gets nothing?

When do market participants realize that 30% of hedge funds are leveredged over 10X and therefore in the same position?

I am a 44 year old in Australia confronted with the same question except that I had to decide what to do with $250k in a self-directed super fund I set up early 1997. I lost 25% of my investment in SE Asia stocks that year - I was following the advice of "Experts". I sold out of all Asian stocks and and re-invested in "Safe" Australian stocks late 1997 - just before the 1997 Oct "Correction". Now I'm beginning to really get pissed off. Just when the portfolio recovered very quickly to April 1998 and I am actually getting something back the markets go into a headspin. Now, I'm really getting mad because I have lost 50% of my super fund which I need in the future as government funds will not be able to support my retirement. I feel like hanging somebody off the lamposts - probably a financial "expert".

By now I don't believe anybody and decide to get scientific about this ( I am a geologist ) so I set up an information system that allows me to monitor all stocks ( i.e. options, warrants, indices ) on the Ozzie market on a daily basis and the entire North American market ( approx. 20,000 stock, mutual fund, option prices ) . I have also compiled historical databases of commodity prices ( gold back to 1889 ) , all globally traded currencies, the Dow going back to 1915, all the major global stock market indices - and have come to the conclusion that everybody else has that we are in the most serious global financial crises for 60 years. All at a time when there is SO MUCH paper out there.

So, in answer to your question I have put all my remaing superannuation assets ( I am single, involved in consulting in the exploration knowledge industry - which pays the bills - and so can afford to take a risk ) into bank put warrants ( expiring 1st quarter 1999 ) and gold call warrants on some of the major gold PRODUCERS ( NOT explorers ) in Australia ( Normandy, Acacia, Lihir, Resolute Resources, etc ) . I am sceptical about gold miners in third world countries ( if the price of gold goes up then local people will confiscate the mines - nwhat we in the mining industry call "Sovereign Risk" ) .

So there you are - thats my strategy using completely objective information from my financial database. Oh, by the way, maximise your use of the Internet - both for getting the widest possible view of the world ( even all the nutty ones ) and for building up your financial databases in order to remove all emotion from the financial decision-making process.

Cheers & Beers,

Melbourne.

AG apparently thought it was a bubble years ago. But what's a free-market central banker to do? Let the bubble blow itself out, but as gently as possible. But is it a bubble?

Let's look at the most actively traded stock today, Dell Computer.

I'm dropping a name here. I did a presentation to Michael Dell a few weeks ago. He's a very bright guy. A very hands-on "power user" as a corporate manager is called who actually uses the products hisr company makes. He asked all the right questions. I've also worked with his competitors and it's obvious to me why he's winning. Everyone I've met at Dell is smart, hard-working, and effective. They have a great strategy and near-perfect execution. And of course great products.

Still:

DELL Market Cap
Sept. 1995 $4B
Sept. 1998 $84B

Is Dell really doing THAT well? Can anyone? Is anyone THAT smart?

-EJ

.

I am a 44 year old in Australia confronted with the same question except that I had to decide what to do with $250k in a self-directed super fund I set up early 1997. I lost 20% of my investment in Asian stocks that year - I was following the advice of "Experts". I sold out of all Asian stocks and re-invested in "Safe" Australian stocks ( large blue chip companies ) late 1997 - just before the 1997 Oct stock market "Correction". Now I'm beginning to really get pissed off. Just when the portfolio recovered very quickly to April 1998 and I am actually getting positive returns the markets go into a Tailspin. Now, I'm really getting pissed off because I have lost 40% of my super fund which I need in the future as government schemes will not be able to support my retirement. I feel like hanging somebody off the lamposts - probably a financial "expert".

By now I don't believe anybody and decide to get scientific about this ( I am a geologist ) so I set up an information system that allows me to monitor all stocks ( i.e. options, warrants, indices ) on the Ozzie market on a daily basis and the entire North American market ( approx. 20,000 stock, mutual fund, stock, option prices ) . I have also compiled historical databases of commodity prices ( gold back to 1889 ) , all globally traded currencies, stcok prices, the Dow going back to 1915, all the major global stock market indices, mutual fund prices ( more than 9,000 of them!!!!!!!! ) - and have come to the conclusion that everybody else has that we are in the most serious global financial crises for 60 years. All at a time when there is SO MUCH paper out there.

So, in answer to your question I have put 80% of my remaing superannuation assets ( I am single, involved in consulting in the exploration knowledge industry - which pays the bills - and so can afford to take a risk ) into bank Put Warrants ( expiring 1st quarter 1999 ) and gold Call Warrants on some of the major gold PRODUCERS ( NOT explorers ) in Australia ( Normandy, Acacia, Lihir, Resolute Resources, etc ) . I am sceptical about gold miners in third world countries ( if the price of gold goes up then local people will confiscate the mines - nwhat we in the mining industry call "Sovereign Risk" ) .

So there you are - thats my strategy using completely objective information from my financial database. Oh, by the way, maximise your use of the Internet - both for getting the widest possible view of the world ( even all the nutty ones ) and for building up your financial databases in order to remove all emotion from the financial decision-making process.

Cheers & Beers,

Melbourne.

PS. I don't believe the world is going to end.

Another interesting post from Contrarian's site

"Today was the Dell analyst love-in down in Texas. Michael Dell said all the predictable, wonderful things. Naturally its stock caught fire, leading the charge as the market screamed higher.
Let's put some numbers in perspective. Dell's market cap is $80 billion, yet we sell only $150 billion worth of PCs in the world annually. If you assumed that Dell achieved 100 percent of the worldwide market for PCs at $2,000 per box, and a 5 percent net margin, Dell would net $9 billion a year. With 1.3 billion shares outstanding, this would translate into $7 in EPS.
At today's prices you would be paying nine times earnings for a company that has 100 percent market penetration, assuming no pressure on ASPs or anything like that. To look at this differently, people are assuming Dell's growth rate won't slow. In which case, it would have 100 percent of the PCs in the world in about five years.
Some people might be saying the PC market is expanding, but the truth is, the growth is being seen not in dollar terms but in unit terms ( and even that is slowing ) . It is hard to imagine that growth will occur in the world at all because of the way it is presently contracting. In any case, the stock is patently ridiculous.
This doesn't mean it won't go higher or down immediately. I don't know what IBM ( IBM ) , Gateway ( GTW ) , Compaq ( CPQ ) , Micron Electronics ( MU ) , Apple ( AAPL ) and the Japanese are going to do if Dell takes the entire market share. Somebody should clue in these other players.
The PC stocks may be the biggest joke that I have seen in my investment career. Sure, the Internet stocks are silly, but the PC stocks actually have fundamentals, which have been deteriorating, yet people still are giving them astronomical valuations."

Charles Keeling: I am not the one who is wishing. You should read my posts. I am preparing for the worst, but I am not assuming that it is inevitable.

Got gold, grub and guns -- engineering books, subsistence farming books, and a Chevy? I have a 3000 gallon water tank behind the house.

Still haven't got around to the gieger counter, but I do know how to make a leyden jar with aluminum foil leafs. Almost as good. Have good books on radiation shielding, too.

If everyone assumes that we will be immolated, they may get what they wish for. I do not. I would rather always have my eyes open so that I can move out of the way, rather than passively await my fate. Isn't that a survival characteristic?

Wish I had more time to work on that 'free energy' device. Would eliminate alot of wars.

All: Where is the money coming from this time? What if the Banks who bailed out LTCM need bailing out?

Speaking of bailouts, is anyone checking our official federal debt?

With all of these promised bailouts, and little cash available to do same, it might be tempting to boost the national debt once again.

It seems there is a common thread in bailouts over the last 40 years or so -- and that is -- the unsuspecting public usually pays the bill, one way or another.

i lost my brain cells in the 60's, but here is a little. homestake and coeur are both famous for not hedging, too much, on purpose, because they know many of their investors want to use the stock as a proxy. barrick is famous for being one of the first and most sophisticated hedgers they did very well. mined silver has had a significant shortfall over consumption since the 2nd world war, plus silver had to work down the millioms of ounces in inventory that the u.s. had built up over 50 years or so. it was heap leaching that caused a big burst in production in the 80's, however oxide ore is getting used up. can't remember gold production stats, maybe someone else.

Many here might disagree with me, but since I'm not a believer in the
Doom & Gloom crowd ( yet ) , I would stick it in the "interest" fund, with
maybe 20% in a good Mining stock. I pulled out of the market over a
year ago with mine & wifes 401k's. She was upset as she watched the
market soaring while we made 5 1/2%. I doubted myself. But now at the
end of the year we will be up 5% & I doubt most others that stayed in
will be able to say the same. My 401k plan does not have a PM fund. If
it did I still wouldn't put more then 20% in. I've mentioned before the
50% drop I took in August. Until I actually believe the world as I know
it is coming to an end or the markets straighten themselves out. ( DOW
around 5000 ) it will stay there. I use money I can afford to lose playing this gold game.

$ 75,000 please. Pretty please.............Oh all right, $3 OK!

Yep. It's kind of like Friday night in the old wild west saloon.

The big rancher and some of his men came in earlier. They are over in the corner playing cards.

The forman of the adjoining ranch and a couple of his friends have just come in.

Everyone knows the forman has been messing around with the ranchers cute young wife.

The place has gone dead quiet.

Everyone knows that soon as anyone moves a hand or heads for the door it will be the end of the world.

So there they stand, waiting for someone to blink....

Tort, for the short run ( no pun intended ) I would park cash in the Money fund. T-Bills please. The metals stocks have been blown out. The rise that they've had so far is a good run. There is probably so more to go, but not much more. I wouldn't take a gold MF position until the downtrend is broken on the charts. I haven't seen that yet. What I have seen is a bounce to the downtrend line and then failure. We are getting close to the downtrend lines. The test will be soon in coming. The difficulty is this, if we break the downtrend lines with conviction, it will be difficult to get on board the gold train. Otherwise the decline will be swift, as is usually the case. This is a high risk market, and a bear to boot. I don't think we've hit bottom in the stock market yet either. Just my two cents, and they're not even copper ones at that

i own vengold which i think is connected with lihir. have wondered about the politics of the area. does it seem secure?

Free Kiwi and Tortfeasor - as you may know I am a geologist with over twentyfive years in the gold business. To me, the best possible investment for my future and the future of my family is in gold reserves in the US. My view is very simple. The US dollar has been very strong for a long time. The dollar price of gold has been going down for a long time. The US gold industry has been in complete chaos. Very good people and very good properties have been thrown into the trash heap. You should invest your money in a US based company that will produce gold at a profit at today's prices. As the fickle world of Wall Street looks for the new, great idea, such a company will prosper.