Clinton is setting up Congress again, he wants to get even bad!

According to Clinton the Congress not funding the IMF is the reason the world economies are crashing.

Now he says they can't get a budget together, because they are spending to much time chasing him - never mind that he has been out campaigning and has not been in Washington to work on the budget.

He has nothing to loose, he will shut her down if he doesn't get what he wants - he is the master of blackmail.

HighRise

Highrise
Pardon. It was a case of mistaken identity.

Hong Kong
Hang Seng
^HSI
12:04AM
9164.39
+657.60
+7.73%

Now that the site is working I have to hit the sack, my timing is great.

Good Luck to All
and a Good Night!

HighRise

Here are news gladdening the hearts and minds of men and women of quality and rectitude:
Junk bond market evaporates, subprime lenders go out of business while subprime borrowers can get no loans, corporation internal cash flows deteriorate while the ( largely imagined ) stockmarket wealth of consumers is shrinking and much more:
http://www.msnbc.com/news/202747.asp#BODY

Here are news gladdening the hearts and minds of men and women of quality and rectitude:
Junk bond market evaporates, subprime lenders go out of business while subprime borrowers can get no loans, corporation internal cash flows deteriorate while the ( largely imagined ) stockmarket wealth of consumers is shrinking and much more:
http://www.msnbc.com/news/202747.asp#BODY

OK here we go.... REMEMBER!!!!!...This a crap game..what $ you lay on the table you could lose...but obviously don't think thats going to happen...oh, by the way this is NOT INVESTMENT ADVICE..blah...blah...
No siree..MR.Greanspan..we wouldn't even think of gambling in the T-BOND pit...we are all "investors protecting our financial well being"...now that a laugh...
Let's get back to gambling....I still have 10 Nov 128 puts that I haven't cashed in...paid $.15 ( 150.@ ) ...hope to sell Tue on the open..figure joe and jane 6-pak will have pay for all the stock they buy Mon....bonds down a touch..its hard to see that fine line between greed and need!!!...OK back to bonds...forgot a few things...Nov options expire on Oct 23.. wierd date ..but so be it...gives us enough time to wait it out and enjoy the long ride down to 106!!!!... should be able to pick up 20 ticks @ one cool K per tick...Right Gollum?...
Why 106....look at the weekly chart....Donald?... the selling pattern is obvious...somebody.. I wonder who...LTCM????did alot of selling to keep bonds under 125... I would guess this is where the trouble started...so the only way they can save their capital is to beat the price down...
Check the long term trend line of interest rates ( WSJ-Market section ) IF
interest rates breaks that trend line @ 5.09-5.10% we are going to see lower bonds...lots a people are watching the same thing...to be continued

Just a thought..Chicken man...

Bondsman
Please post that URL address again, it didnt seem to work. I am probably doing it all wrong.

THANK YOU all the kitco folk, for teaching me and my family so much.

Bondsman
Please post that URL address again, it didnt seem to work. I am probably doing it all wrong.

THANK YOU all the kitco folk, for teaching me and my family so much.

http://www.msnbc.com/news/202747.asp
Alternative: Yahoo-News-full coverage-world-economic slump-Wall St. Journal: Credit crunch...

all that creates thunder across the plains are not the hooves which rush before the Chariots...

Cheers to ya!

My last wish...every child in the world holds high a candle as a salute to your living past infinity...yup...uh huh..

UP....

POG will be;

ASB

I also look at the traders committments, but you have to admit that for gold it is rather hit or miss on how gold reacts to the fundamentals. One thing you must realize is that the hedge funds did not use the futures markets, they were players in the OTC markets ( forward markets ) This is an unregulated international market between banks, hedge funds, mining companies that is reported to be 10 times as large as the regulated futures markets. The OTC forward markets are a mysterious black hole, no one really knows what is going on there or who is doing what, LTCM did its business there, there will be other hedge funds crawling out from there in the not to distance future is my hunch is correct.

Just wanted to remind you that in the commodities market, there is a long position for every short position, and a short for every long. There must be a seller for every buyer.

Looks like greenback headed to Yen110 again. After that Yen 100!

Seems report re: Japanese Fed printing Yen to bail out banks at higher Yen/Dollar makes sense.

http://www.futuresmag.com/news/news.html#anchor143012
Goto FINANCIALS... within the report.
Maybe the long awaited repatriation of Japanese capital is now unfolding.
This could kill the stock market.

ordering a $64 bottle of wine. My, oh, my. This economy is totally screwed up.

can't see how gold is going to get past the forward selling-if anyone has any insight it would be appreciated; and am curious about the warehouse silver shortage? for the time being i think i will look at other mkts-sure plenty of volitility and action!

Might not be money rushing to Yen, could be Japanese investors fleeing $US. *shrug*, I dunno.

Tennessee 7/11, 800 more words....

This article may have been posted earlier. A
good read. One of the points made was that
each 1 rise vs the $ results in a 1 trillion  gain for Japan's banking and financial
system. This is equivalent to about 8.7 US$,
using 1 US$ = 115 J. Perhaps it would be
more instructive to look at this in terms of
ounces of Gold. See, Gold is the center of
the financial universe. Gold can be compared
to the Sun. The US$, Japanese , and Euros
are mere planets.
http://www.afr.com.au/content/981010/market/markets1.html

Visiting this site should set Revenue Canada web-monitoring robots' alarms off.

http://www.detaxcanada.org

1 trillion en = 8.7 billion US$. With Gold at 300 US$, that is about 30,000,000 ounces of Gold, or just under 1,000 tons.

auric
Pocket change! :- )

Croesus
Err, gidday, welcome to kitco. fair *and* beautiful?

All
Anyone care to update thoughts on lefty kiwi's Carolan Spiral Calendar analysis? 18 October? Is she is or is she ain't my precious?

Could be some secret bail-out thingie for the Yen, but this doesn't look Yen specific, it looks more like everybody getting up and leaving the USA party to me. Who can say.

That's why we know about it!!!!!We are insiders, right? And privy
to the secret deals betwen Nations. Bull.

I see this as nothing more than a "planted article" for the
unwary to read. Why would Rubin and Greenspan want to do such a
thing? EASY.

To give the impression that they have the markets under their
control!! Remember someone saying that the Fed had stopped the decline of
the gold market? Why this bull? For the same reason.

The truth is that they have lost control and they are trying to
avoid a panic situation. But he who panics first panics best!!!!

Rubin and Greesspan are scared out of their minds. They know what they
have created. They know it is all their fault because they encouraged
the bubble by their policies. Greenspan leaves in April of next year
and Rubin? He goes when Clinton goes. Soon. They are going to cut and
run and leave someone else with all the fun.

Nice guys.

Thanks, GD

Until the G-7CB's figure out what their going to do gold will not break out of current trading pattern. We need to see if Bretton woods is what currency crises needs to stabilize the valuation of world Money reserves.

For Bugal..
If the GOVERNMENT said that Elvis died and had something
to gain from it, THEN I would believe the KING LIVES.

For Nick ..
Regarding moon rocks .. Table Mountain is covered with
them ...

For Mozel ..
The landing was staged somewhere in Nevada. Disney
directed it. I should know!

you were sure right about shorting bonds last week-hope you followed your thinking. the way i heard it the japanese sold tens of billions of $ of us bonds - into a falling dollar would make sense. however this is all pretty unusally weird stuff. so we have a falling bond mkt just before the feds continue lowering everything- or so they all say - wild times ahead i would guess.

Why do I feel so dreadful every time I sell gold shares?? I have today taken @50K of profits from the recent rise. Gold shares will now ZOOM tomorrow and expose me for the slave trader that I am. I almost ALWAYS sell too early!! I have on occasion doubled my money and watched in impotence as the shares have gone to 50 x my sell price. Can't win 'em all. SELL TOO EARLY!!It is the only reason I am still trading. I never saw a profit I didn't like. I lose out on some biggies. I would not have held Bre-x at $250. Neither would I hold it at zero dineros.

I bridge the psychological 'what-if' gap by holding a core portfolio +++ them little round shiny thingies!! If Au went to $1000/oz tomorrow, I would not weep. I would miss out on what I sold today ( and last week ) but I would still stick to my method--ALWAYS SELL TOO EARLY. I miss some biggies. I also miss a whole lot of disappearing acts!!

Now if you are not a trader--just ignore all of the above!! If you read one of my previous posts about NOT selling too early--I am assuming that you have never heard of a stop-loss, are in for the long run, and bought at much higher prices. In a couple of years we'll all sit around the Squillionaire Hotel drinking pina colladas!!
............................
Saw Rene Rivkin on the tele this am. He is one of the all-time Aussie share trading gurus. He said "You are crazy if you are not in 100% CASH right now." --or words to that effect. He is not a gold bug--just a money bug, and a damned good one at that. 'Crash Time' coming to a theater near you--soon!! Any of you whom have not taken defensive measures do not deserve to play the game. Get real. These are extremely dangerous times. End of sermon. Where's the fridge??

"First, I'll tell you how the stock market is being rigged.
Then I'll tell you what is even more important - what's
going to happen in Washington and why you should get out of
stocks before the rigging adventure leads to disaster."
-------------------------------------------------------------------
http://nypostonline.com/business/5459.htm

i commend you on selling early. i too often am looking for the home run. as i mostly play exploration plays wts,it makes some sense. my favorite plays are those companies that have reserves AND good exploration possibilities - especially when we are at the bottom - like now? that way i have two ways to win. gold or silver go up or they hit a big hole. the best thing about home runs is that they sure save on commissions.

reports that were due Sept 30. I think that I read recently that the reports are effective Oct. 15. Does anyone know the exact date? This is extremely important since I believe that the Yen repat will reverse after the reporting date, with negative consequences for POG.

i read a similiar article - half was over my head and i can't remembeer the other half - however i do remember that the writer expected a strong reversal and the dollar to go back up to around 135 yen - you would think if it was that obvious the mkt would discount that - but i am now out of my league.

Nick,

What do you think about holding Lihir Gold at the moment?

Leland
It looks like John Crudele is another main stream journalist gettin his info from kitco.

I have kept a few 'home runs' in the deep freeze. I am waiting for 'ten-bagger-country' on these little pissants. I trade the biggies and store away the littlies. Go back about ten years and look at the charts of the little pissant wannabee gold/silver shares. Looks like a bungee jump.
They will all be worth 10 x in a few years 'IF THEY SURVIVE'. I'll give you ten bucks for your Bre-x certificates!! cheers, N.

I didn't trade it - all my gambling money is tied up on other bets, and I promised myself I'd limit my speculation and sit in cash. Besides, there wasn't any way to know it was going to happen last week - I was expecting it as a reaction, not as a pre-emptive Pearl Harbor job *smile*.

Lihir is like holding gold x 2. If Au goes up you'll double or treble your money. If gold goes down or New Zealand invades Papua New Guinea ( that'll flush Auracious out ) Lihir will go down x 2. Partly hedged ( 40%?? ) and swinging by the gonads in the financial maelstrom. I liked them a lot better at half the price a few months ago!! ( In fact I bought and sold them 4 times ) . cheers, N.

What is yr opinion on holding Lihir and its future

Thanks for yr comments.Check out a stock called cardia Mining who are involved in Acid Mine Cleanup with new technologhy developed with the University of queensland.They have trials in the states with Cardia tipped to be the next Memtec.

it was impossible to figure. on the one hand you have a super over bought mkt and on the other you have every pundit in the world insisting the feds are ready to lower the discount rate by.50. on top of that a world in ecomomic melt down. nothing would surprise me at this point.

...Clinton futures. After Nov. 3rd, sanity may return to US politics!! ( then again, I am an optimist ) . Where is mozel?? I am running short of green cheese.

grizzly . . Sun, Oct 11, 2:17PM CST ( -0600 GMT )
BTW, I said I've no idea where it's going about silver in an earlier post and I meant in the SHORT TERM. I am not as bullish as dixie is on the prospects of silver and gold, but I do believe that they will once again shine and I'll be 'dollar cost averaging' so to speak into them for years to come. I'm 29 and I think we'll see that infamous short squeeze on gold in my lifetime and I plan to grin when and if it happens. Even if it doesn't I'll buy it even if it goes to 180 an ounce because of it's value to me. I may be dead wrong some day, but I started buying this year under 300 and I plan to continue to put 5-10% of my annual income into the stuff for years to come. fwiw.

grizzly . . Sun, Oct 11, 2:22PM CST ( -0600 GMT )
On an even crazier note: This week is guess what kids CRASH WEEK. Yup we did in fact have our token one up day on friday and according to past patterns we are locked into the moon calender pattern here and if it holds true here and we are in the '29 crash senario then we'll begin the acceleration to the downside tomorrow and into fri-mon where a major low should be established. Friday's walk the dog up the MA sure looked rigged and if the fireworks start tomorrow then LOOK OUT BELOW. That said I'm long and so is my system so I'll get hit hard if it happens.


grizzly . . Sun, Oct 11, 2:24PM CST ( -0600 GMT )
Here's the gif I took from a website that lines up the moon cycle low which is due to hit this fri 16th or mon 19th.
http://www.freeyellow.com/members2/grizz/D_compare.gif

grizzly . . Sun, Oct 11, 2:27PM CST ( -0600 GMT )
All you bears should be licking your chops eh?? Well I would too, but I gotta follow my system folks no matter where it takes me. If it reverses tomorrow then I'm with ya... but for now I'm long options from 941, 965, 966 spz8.. with a safety net fully paid for Oct 970-960 put spread.

grizzly . . Sun, Oct 11, 2:29PM CST ( -0600 GMT )
humble if we take out thursdays lows THEN I would be really bearish because thursdays lows reversed at the .786 level from OCT '97 lows... and that is the last stand for fibo retracements.

grizzly . . Sun, Oct 11, 2:31PM CST ( -0600 GMT )
So if we take out thursdays lows folks I'll say it right now nobody's gonna have a chance to get short fast enough for a huge puke to the downside.... I took off days all this week just to watch things carefully during the day.

re:Cardia. I owned a squillion Memtec and as usual 'sold them too early'!! I am starting a club called "The Wannabee Squillionaires". You must be poor to join and rich to quit. Wanna join?? We help each other on Kitco to reduce our membership. The only club in the world that tries to get rid of its members. Life membership expires on 01/01/00--as none of this is gonna work anyway. You have 14 1/2 months to say goodbye to your Kitco mates!! Even less if you listen to Sharefin.

Bless you Sharefin ( now if it would only go that way ... )

Read this article referenced earlier. Does sound to me also that John has been reading KITCO and put together an article based on what he has read here. Was most interested in his comment about Starr coming out with another bomb for Clinton after the elections. We'll see.

Tonight everything seems great for the world. Asia is recovering, Euorpe will be up 3-4% in quick order, the S&P will be over 1000 and my gosh gold is up $1.40 - for the moment.

Watch what happens -gold will fall in Euopean trading and be down by the time NY opens. Seems we need the yen to fall a yen a day to keep gold from falling.

Secret deal on $US-yen dive By Tony Boyd, Tokyo A secret agreement between the world's two economic superpowers, Japan and the US, lay behind the sudden dumping of the US dollar. ???
http://www.afr.com.au/content/981010/market/markets1.html

a link ffom that one says the feeling is that $50-60 billion in hedge fund short yen/ long bond money. i think it is far higher than that, and if you add in the trillions in japanese insurance companies AND just retail accounts, it's quite a bit more.

Hedge funds have forced a dramatic currency realignment in the last few days to cover positions they have taken against the Japanese currency. These funds had originally borrowed in Japan to take advantage of low interest rates and then invested the funds in the US at a higher interest rate. However, fears of an economic slowdown in the US and mounting losses from emerging markets have forced them to buy yen to retire the debt. Rough estimates put the value of short yen positions held by these funds about $US50 billion to $US60 billion, with about $40 billion to $50 billion believed to have been squared in the past three sessions. There is a belief that there may remain about $10 billion to $20 billion in positions to be squared.

of course a lot of these accts have very lartge profits and it is still profitable to borrow in japan and lend in US and CAnada. unless the yen goes up 10% every week of course...; )

now Tiger lost a cool 2 bill ...... seems to me there should be another 4 bill or so in losses to account for .....wonder who it is?

interesting to me that given that the same thing happened with gold as with yen--namely borrowing gold and selling it to finance other stuff, the "gold carry trade"--gold isn't doing much. and gold is a much smaller market. it should be at $400 by now one would think........of course placer dome and newmie have doubled

but if the japanese are going to reliquify the banks, this is just a countertrend rally. unless they are planning to sandbag the hedge funds again...

looks like bondos and notes are goling to be trading electronically almost 24 hours starting tuesday, except for a 90 minute break in the afternoon. hmmmmmm. ever notice how we get either new contrcts or new hours at important trend change times???????

an ewaver I watch who watches the XAU is looking for a fall for the next 4 to 5 weeks. This would correspond nicely with your call for an upmove in the DOW. Tonight I am on the fence willing to go either way tomorrow. Probably looking to fade the direction of the open which right now looks like it could open down but we have much time to go.

there is no better gold man around than our very own twocents and he recently took some fat profits on some well timed gold stock purchases, so you are in very good company. also, the failure of gold to rally hard when the huge short contract position of ltcm was disclosed, bolsters the short case further, imho.

..and don't forget all those puts out there....fri showed the boyz still have what it takes to run this thing up...pretty scarey really the power 'they' got...not to be fooled with, IMO

The latest Durban Roodepoort Deep annual report has been published at http://www.drd.co.za/. It is a comprehensive document containing statements by both the chairman and managing director as well as information on mineral resources, Y2k readiness, the financial statements and more.

The latest ABSA Mocatta market report can be found at the same site.

G'day JD. I really started to worry a few days ago when I looked at the charts of jgai and xgo. Straight up!!! No breaks!! My 'hold-on-to-your-cohones' impulse activates whenever I see a chart going straight up!!! CORRECTIONS-R-US is the only thing that has saved my ass ( ets ) over many years. I am often wrong. In fact--I thought I saw Elvis selling moon rocks at the shopping centre the other day!!! I am now more 'out' than a poofta at King's Cross ( regarding gold shares ) than I have been in a long while. I have got my security blanket and am not afraid. I fear no evil, for I am the biggest son of a bitch in the jungle. cheers, N.

Dollar has strenghtened quickly and markedly against the European currencies. Could be Kosovo business. Gold weakens in the process - now just hanging on to a twenty cent gain, silver up 2 cents after being 9 cents higher.

This is as I ecpected. The big boys have had their chance to get short in the over night and now will bag the liquidating longs at the open in NY, assuming the comex is open - at least in the gold stocks.

Greater buying opportunities coming to a gold stock near you.

Nick@Cajones
Ready for the Big Spike Down? I'm just a chicken, but I'm getting ready to cross the Road.

Looking left and right,
right and left
up and down
in an out

any day now

~~~~~~~~~~~~

You mean I can be a "Wannabee Squillionaire" with a self-expiry date?
Where do I sign up?
What do I have to do?

Will this enrich my life ( :- ) ) )

----------------------------------
Which way's the Dow going?
Europe on a parabolic roll?
Volatility to the moon?
Is it sustainable?
So much to ponder?
-----------
I think this has already been posted.
Can the world be saved?
http://www.pei-intl.com/TOPICS/LEVERAGE.HTM

Worth a look?
Free technical charting.
http://www.clearstation.com/

And this one
http://live.justquotes.com/
Type in a symbol or part of a name and hit enter for a specific security, index, options contract or futures contract.

...while modestly dressed and with an escort on entering the '300 Club' ( twice in the last week ) ...

...was an ominous warning to me.

That's a lot of Yen!

http://biz.yahoo.com/rf/981012/cj.html

Your big spike-down has always been in the back of my mind. I am as addicted to trading as I am to Kitco. Luckily for me the past few weeks I have ignored and kept buying. Your caution is very smart. Always be a sub in rugby ( or football ) . Let the macho blokes thrash themselves to death and then come in, in the last few minutes and kick the winning goal!! There is more upside to this gold move than most people in their wildest dreams can realise. Most will sell too early ( mois amongst them ) . I will watch you make a squillion while I wait for the next correction. Then I will come and join you at 'the edge'.

Going down,
Yen now down, European currencies falling further.

http://quote.yahoo.com/m2?u

Hong Kong +5.28%
Japan +5.24%
Malaysia +3.78%
------ Pakistan -9.40% ****
Philippines +3.22%
Singapore +5.37%
South Korea +4.06%
Thailand +3.59%

Austria +2.89%
Denmark +2.27%
Finland +5.78%
France +4.32%
Germany +3.61%
Netherlands +4.39%
Spain +2.07%
Switzerland +3.97%
Turkey +6.18%

One would think that something would give soon.
Given the current volatility.

Even Nick@C has taken up drinking rather than holding paper shares.

-o^o-

Nick,

did you also get rid of your RSG shares? I thought you would have held out till after Friday ( Preston's meeting ) . I noticed today they only closed 1 cent down ( 1.33 ) . I think a lot of shareholders have that meeting in mind, not to mention the 2 cent didvidend plus the 3 cent bonus if bulong is sold on 26 October. Comments please.

Thanks.

T-Bone

http://www.cairns.net.au/~sharefin/Markets/Global_charts.htm

You could almost say these charts look very bullish.
Considering how far they have fallen.

Especially if all was well in this financial world.

How high's a fibbo retracement?

European stock markets all up, strange with probable NATO action in Kosovo.
They may feel relieved that US House will surely approve $18 billion gift to IMF. Dick Armey said today

"The IMF can have American Tax Dollars if the IMF is responsible and productive in the world economy"

Real generous of Armey, he must be bucking for a position in the New Global Order. Little wonder some Texans want out of the Union.

I have an each-way bet on RSG. I am always worried about 'buy the rumour, sell the news'. I think Preston will vote in favour of the nickel purchase. RSG is suffering from 'bad Africa vibes'. I have been stop-lossed out of both of my African shares in the past few weeks. RSG has bought all of BHP's African interests. Instability is paramount all over the dark continent at the moment ( except in JD country--which is extremely good value ) . I held shares in the richest little mine on earth in the Congo-AVL ( read SDRer's excellent articles from yesterday on the Congo ) .I sold at .125--now .07? Hard to mine gold when lead is flying around.

So, to not obfuscate with your question. YES, I LOVE RSG!! However, there are lots of weak hands holding shares. They sell sulfur at the sniff of a match. Excellent trading!!

Even Nick@C has taken up drinking rather than holding paper shares.

-o^o-
......................................
What you mean 'taken up' white man?? Nick@firewater country.

http://www.suntimes.com:80/output/business/coin11.html

What is your secret of longevity?? Whilst all around you crumbles, you are the 'Rock of Gibralter'. I am extremely pleased to 'know' you, and hope that one day we may meet on earthly terms.

http://www.spokane.net:80/news-story-body.asp?Date=101098&ID=s464856&cat=

What about Fosters matey?

Or the Very Best brand?

Or do you prefer the golden death of XXXX?

What's your vehicle of choice?

Have put off the trip from April to July. Expect you will have a few cases of xxxx for my arrival. Will be great to meet you and Helen?? I wanna see the fin-house, if not sold by then. I already love the tropical splendor from the pickies. Going to sit on a beach and feed the crocs. Do they eat gold bears?? cheers, N.

http://www.theage.com.au:80/daily/981012/news/news11.html

where there is gold there is another world
http://www.theage.com.au/daily/981012/news/news11.html

J'burg gold down 6.26%
http://quote.yahoo.com/q?s=%5Ejgai&d=v1

Globex S&P up strongly. Europe up big-time.

or are we all dropping dead together with the price of gold

http://www.securitytrader.com/daily/XAU%20-%20daily.gif

Globex up, dollar up, PM's up, oil very slightly down.

One would expect that with the banks and bond markets closed today the action would be a bit muted. And so they may be, but watch out for tomorrow.

I don't know what Mr. Fibonacci would say, but the DOW is going to 8400 at the least very soon.

We'll do a Fibo-seance from there.

http://www.mrci.com/correl/lbrc001.htm
http://www.mrci.com/correl/lbrc002.htm
http://www.mrci.com/correl/lbrc003.htm
http://www.mrci.com/correl/lbrc004.htm
http://www.mrci.com/correl/lbrc005.htm
http://www.mrci.com/correl/lbrc006.htm
http://www.mrci.com/correl/lbrc007.htm
http://www.mrci.com/correl/lbrc008.htm
http://www.mrci.com/correl/lbrc009.htm
http://www.mrci.com/correl/lbrc010.htm

Locked out for 40 minutes.

Go gold.

http://biz.yahoo.com/rf/981012/gt.html

Globex still up, etc.

With the bond markets closed, the dollar is rising smartly as the Yen falls. This tends to substantiate the idea that the unwinding of various hedge fund positions has been a big factor in recent currency moves.

It is interesting to note that the precious metals are holding very well even with this temporary rise in the dollar. There is a certain amount of non-hedge interest in the precious metals. As positions get unwound and markets begin to stabilize this interest will become a very significant factor.

What I had read was a fable where people are portrayed as animals to teach a moral.

In this fable, the frogs asked for a king. Before they had lived in an egalitarian society where no frog was above or below the other ( each frog was essentially his own King ) .

The Lord sent weak, benevolant king, and the frogs walked all over him. They then asked for a new king that would stir things up a bit, and the Lord sent them a Crane ( stork ) who crushed, killed and ate the frogs by the dozens.

The Frogs were then told, they once had something good, they now have something bad, and if they complain they risk getting something worse.

the PPT, or market riggers, or whatever you want to call them.

http://www.nypostonline.com/business/5459.htm

- Steve

I understand that the U S MINT has been selling so many golden eagles that they cannot keep up with the demand. If this is true, why has gold sold off for past few days?

Notice the same crash of Kitco about 45 minutes ago...do you really suppose somebody is trying to interupt this free flow of ideas and information about gold. Do you suppose its a conspiracy lead by the CB / hedge fund cabal. If so, I think they would be better off letting us all get excited about gold and its 2 cent rallies - more for them to chew up and spit out.

In all seriousness the interruptions do seem to have a pattern of coming and going. I wish our host, BART, would commuicate with us more often to tell us how he sees his problems.

I would like to thank all fellow gold lovers who post here, & have contributed to my education in the ways of the market & it's devious twists & turns..I enjoy immensley,the highs & lows of the messages in relation to each coming trading day. The wife, of course thinks I'm quite mad..but i have a sneaky suspicion she gets a buzz out of as well, ..particularly when i say.."honey, come & read this"..when i was in my teens, all i wanted was a horse,go camping, & prospect for gold. Now, in my 50's, the horse died last year, my home feels like i'm on a permanent camp,and we live in a place where we find nuggets on a regular basis ...
no stockmarket can ever beat the amazement & thrill of the glint of gold
you have just dug up...after lying in the ground since time began..
go gold!!

http://biz.yahoo.com/rf/981012/h4.html

http://biz.yahoo.com/rf/981012/dl.html

One might also look into a list of 404'd former contributers for motivation.

http://nt.excite.com/news/r/981012/05/business-bank

definately so. without a doubt the FED is involved. probably together with the CIA

As I have posted here in the past, Govt debt is a scam. No Govt would be in debt if it printed its own currency instead of borrowing it from a cartel who has exclusive license to print the stuff. This provides a way to ( falsely ) justify the confiscatory taxes that steal property away from those who have it and to enslave the working population by taxes their wages.

The one effect taxes have that isn't evil in itself is that it takes currency out of circulation ( counters monetary expansion, i.e. the effects of printing money ) .

Now look at Brazil. Only about 4% of the population pays direct taxes. The govt must use duties and sales taxes to make up the difference. Brazil has loads of foreign-denominated debt. They are in a debt trap. Nonetheless they have managed to keep their currency relatively stable for the past 5 years, most likely from borrowed money, hedgefunds, mutual fund foreign inflows.

A $30 Billion infusion might hold up the Real for awhile, but ultimately it is destined to collapse IMO.

Any thoughts on how much higher the Dec SnP might travel? I have short stops at 1024 and it is looking risky...

I really have no idea whether someone is jamming the site......but it would not surprise me, at all.

Yes I enjoy this place and all the comments from some very interesting and informed minds ( my mind excluded, but as i learn perhaps to contribute intersetingly as well )
For what it's worth, as long as 295-296 basis spot holds over the next 48 hrs, then we should see another rally over 300, but then
who knows what will follow. Good night / sleep tight !

I have just experienced the same problem....

GLOBEX up very strongly,Dollar up very stiffly, Yen down, Bond markets closed, PM's up, Oil Up.

Chrysler shows good earnings news.

08:17 [C] CHRYSLER Q3 NET $1.02 PER SHR BEATS FIRST CALL EST OF 87C SHR.

Looks like a DOW rally day.

My conspiritorial mind has long thought that someone was jamming kitco...Bart can install software that tells who/what/when and where the source of the access.

Kitco is great when it works, and the absolute pits when it doesn't...

Bart...can you do something....

bd

GLOBEX up very strongly,Dollar up very stiffly, Yen down, Bond markets closed, PM's up, Oil Up.

Chrysler shows good earnings news.

08:17 [C] CHRYSLER Q3 NET $1.02 PER SHR BEATS FIRST CALL EST OF 87C SHR.

My conspiritorial mind has long thought that someone was jamming kitco...Bart can install software that tells who/what/when and where the source of the access.

Kitco is great when it works, and the absolute pits when it doesn't...

Bart...can you do something....

bd

Master...Do you think there is a chance that the yen could go to 100Y/$
Sounds wild.. but..me thinks the Tiger Fund is still short...if they closed out their position there would not been rumors about "making the biggest margin call in history"....besides Clinton thinks the strong Yen is good ( USA TODAY weekend edition )

Just a thought... Chicken man....

CIO's say "Better safe than sorry" when preparing for the millennium.
http://www.idg.net/idg_frames/english/content.cgi?allowFeedback=false&referer=&outside_source=newsletter&url=http%3a%2f%2fwww%2ecio%2ecom%2fconferences%2foct98%2fknowpulse%2ehtml&doc_id=31829

A NEW CIO KNOWPULSEsm POLL REVEALS less than one-third ( 29% ) of the world's top technology executives believe the Year 2000 problem will be solved in time for the millennium. The poll of 330 executives - many charged with solving their own companies' Y2K problem - indicates the Y2K bug is not simply a business problem but an issue for which government officials and consumers must prepare. The KnowPulseSM poll was deployed on October 5, 1998, at a CIO Perspectives conference in San Diego.
-----------------------------------------------------
Introducing Y2K's Costly `Cousins
http://search.washingtonpost.com/wp-srv/WAPO/19981008/V000074-100898-idx.html

-- The European Union's conversion to the new euro currency starting in a few months;

-- The rollover of the date system in Global Positioning System satellites;

-----------------------------------------
Note
``And the satellites that have the problems will have to be replaced.''

GPS dates also are used to synchronize some electrical power plants and large international transfers of funds. Jones worries that the rollover might cause some plants to quit working, and interest payments on the transfers could be thrown off.


What me worry? Nick

There is, of course, always the possibility, but not today. Much of the rise we have seen is due to unwinding of the Yen carry trade. With the bond markets closed there will not be much unwinding.

Also, the unwinding will soon enough all become unwound. There are not enough good fundamentals in Japan yet for the Yen to strengthen on it's own. When you get right down to it, the US economy is still steaming right along, the dollar will not decline much more either once the bond market gets more sensible and panic subsides overseas.

I have some things to do today, so I won't be able to watch the markets. I'm going to put all these levers on autopilot and let the winds blow where they may. I trust you guys will keep everything in order?

do not attempt to adjust the picture....
i control the horizontal.......
i control the vertical......

i am chaos and flux..............

i show my face in murder...in war...
in the rape of man by man.....yes, i do...

i am chaos and flux too......

the coming diaspora is my handi-work....
greed the vehicle needed.....avarice too....

i feed upon the bloated carcass called man-kind....
for the peopleo are of one mind....

i am chaos and flux.......and i'll feed upon you too....
yes, these are the things i will do......

cherokee!;..back.from.the.desert...seeing.green...knowing.it.is.red...

U.S. bombers prepare for airstrikes amid Kosovo talks
http://www.foxnews.com/js_index.sml?content=/news/international/1012/i_ap_1012_39.sml

Ambassadors of the 16-member NATO were meeting in Brussels pending the results of talks between Richard Holbrooke and Milosevic. If the talks failed, the officials in Brussels are expected to vote on an "activation order''  the last military step before any military strike can be launched.

Just in case the market rigging turns out to be rotted.

We be jammin? - no everybody is trying to catch up on the weekend posts.

when I am in Meh-hee-coh I shall raise a mug of Tequila to ya...yup...

chaos and flux...Hmmmmmmmmmmmmmmm...what are we to do if there is none and folks learn how to step through the portal...what then?

Would you please send me some of that Peyote and of course with a bag of gold also. Thanks, Pete

Is it really surprising that Chrysler had decent earnings after its main rival GM was shut down for a good part of this year.

You still have Americans who will buy only American brand cars. When GM shuts down, people don't even bother going to the GM Dealers. It's either Ford or Chrysler.

Monday October 12, 9:27 am Eastern Time

U.S. stocks set to rally, aided by Japan hopes

U.S. stocks set for rally at open, aided by big gains in Europe and Asia on hopes for progress on Japan
banking reforms. Dec S&P stock futures up 20.3 points on Globex. Dow futures indicate 150 points rise at
open. U.S. Treasury market closed for Columbus Day.

09:38 Already past 8000 - gollums levers must be stuck.
09:40 to 09:50 wobbling at 8010 to 8030

Jack be nimble, jack be quick.

If the XAU ( currently 75.3 to 75.5 ) breaks 68 today, I might bite.

http://business-times.asia1.com.sg/1/nfrnt02.html

Cell #101, bed 2, Ohio State Penitentury, Columbus, Ohio 44i812, Thanks again, Pete

http://business-times.asia1.com.sg/1/focus11.html

http://business-times.asia1.com.sg/1/focus11.html

say, when they say the bond markets are closed, does that mean options for stock indexes won't be traded today?

Nick@C
Local crocs love the gold beer.
------------------
This market looks anemic
After it's initial futures lead rally
It's stopped in it's tracks.

But now they're pressing on the PREM lever.
I wonder why?

------------------
From the weatherman's report
----
I received this email a couple of weeks ago from a
Brazilian email address:

---

// Brazilian Telecom Insider //

Dear Y2k Weatherman,

I am a consultant to the U.S. Government, both domestically and
abroad. Although, for as much as they listen, sometimes I feel I may
as well be talking to a stone wall. ( I'd probably get more
satisfaction. ) I am also a provider of Y2k solutions - software tool
- and a publisher of white papers on the Y2k issue, specifically on
bringing PCs into compliance.

This e-mail is coming to you from Brazil. I have been religiously
following your website and the Y2kWatch News for some months now and
am very pleased with the honesty, straightforwardness, etc. so here is
my "insider" report:

Over the last 6 months I have been meeting with ALL of the Brazilian
Banks, the stock exchange here, as well as trying to guide my
Brazilian business partners through the privatization of the PSN
[public switched phone network] here in Brazil. Also, one of our
clients is the Power Company for So Paulo, the largest city in South
America ( over 17 Million people ) . What a task!

All the mainstream media here has been telling people that Y2k is "NO
BIG DEAL." No surprise there. However, I feel it will be nothing
short of a miracle if the phone system in Brazil survives Y2k. Do you
have any idea what will happen in this country if we have no dial tone?!

The lack of public awareness here is really going to be the proverbial
straw that broke the camel's back. The masses are just going to
'freak' ( H.S. grad.'64 ) . They won't be able to cope.

One of our main marketing targets here is the Brazilian Government.
They have done virtually NOTHING on the preparedness issue. There
have been so many other issues here and it's an election year ( need I
say more? ) .

Behind the scenes, the financial institutions have been scrambling to
'fix' everything they can find that's broken. The awareness within
the companies ( corporations ) is finally coming into focus, albeit VERY
LATE in the game. I just pray that I can manage to make enough money
in time to finish my own preparations and be back in the States with
my kids when this all comes down...literally.

We truly have a globally dependent economy. Few people actually
realize it. "As Brazil goes, so does all of Latin America." This is
the saying that so many say of this 'sleeping' economic giant. In all
honesty, I'm afraid that no matter what we manage to accomplish here
during the next 15 months, it won't be enough to stop what is truly a
disaster just waiting to happen.

For once we know exactly when and where ( all technology dependent
countries ) this massive disaster will hit. The only thing is we don't
know is truly how BAD it will be. God help us all.

I share your concerns over the telecom network and having worked with
the RBOCs [Regional Bell Operating Companies] as well as the long
distance and independent local exchange carriers for over 30 years.
Let's just say I'm trying to keep a positive attitude and prepare
spiritually as well as physically.

Good luck in your continuing efforts. I'm sure you already know how
totally un-prepared the U.S. Gov't. is for all of this. They are very
quietly preparing for the inner city problems, but I don't think
they'll be able to even handle that.

Signed,

Bummed in Brazil

Disable picture use when accessing this site when delays are common.

On Internet Explorer click on
VIEW ( toolbar )
INTERNET OPTIONS
ADVANCED ( subfolder )
SHOW PICTURES ( click so checkmark disappears )

This allows pages to load much faster because it doesn't waste time loading pictures ( jpegs, gifs ) . You can still get the picture to show in this mode by right clicking "show picture" on where the image should be.

Afterwards you can restore the "show pictures function" by repeating the above steps.

Thanks

Eventually, these kinds of problems in Russia will be THE problem that drives the world into one of the worst crises of war since the Cold war of the 60's.... All the events of the past year in Russia, have created a climate which would embrace a fascist, nationalist, or communist dictatorship with sabers rattling. Perhaps Bosnia as an excuse for future interventionist adventures?

Russia concedes it'll need food aid, U.S grain

Last Update: 7:27 PM ET Oct 10, 1998

MOSCOW ( AP ) -- With continuing economic woes
creating doubts about its food supply, officials
acknowledged Saturday that Russia is seeking food aid
from Europe and grain purchases from the United
States.

The report comes despite previous assurances by the
government that no grain imports were planned this
year.

But the two-pronged food hunt reflects the
government's increasing concern over how it will
cope with fallout from the plunge in the national
currency, the sharp decrease in imports and Russia's
worst grain harvest in decades.

Russian agricultural executives are heading to the
United States over the next few days to negotiate the
purchases, the Agriculture Ministry said, according to
the Interfax news agency.

Russian Prime Minister Yevgeny Primakov told European Union President
Jacques Santer in Moscow on Friday that food and medical aid would be
welcome, said Bertrand Soret, the EU's chief spokesman in Russia.

The government has already said it's planning to drop or lower import duties
on basic foods such as meat, butter and grain to restore the nation's stocks.
Now it's apparently looking for significant food aid from abroad for the first
time in several years.

The variety of goods on Russian store shelves has shrunk since mid-August,
when Russia's long-standing economic malaise burst into crisis. The
government defaulted on some of its debts and devalued the ruble, sending
the prices of imports soaring and Russian consumers scurrying to stock up on
what goods they could grab before prices rose even further.

Details on what food and medicine Russia needs and what the EU could offer
will be worked out in committees, Soret said. The EU insists that the
distribution of any such aid be carefully controlled.

In recent years, the EU's humanitarian aid unit has given aid to Russia on a
small scale for specific projects.

The United States provided food aid to Russia in the early 1990s, as the
nation battled runaway inflation after the collapse of the Soviet Union.

Overall imports -- which Russia had come to depend on for nearly half its
consumer goods -- plunged 45 percent in September because most people can
no longer afford them, the government announced Friday.

The decline in some categories was even more dramatic. Pharmaceutical
imports were down 71 percent, while milk and sugar imports both fell more
than 80 percent.

Thought you may like this one.

Lloyd's satellite constellations - Irridium
http://www.ee.surrey.ac.uk/Personal/L.Wood/constellations/iridium.html

pete ( r? )

i need no psychotropics to know.....
your need to try to bleed this one is duly noted....

why must something that is not under-stood be ridiculed?
this is a natural function of peopleo.....is kitco not a
place of refuge from the peopleo herds?

the hand is stayed......take care in casting barbs...
my quiver is full of ldfcafh......taken from nameless ones..
i carve your name upon one of them as you read this....petey.

cherokee!;...battling.with.gnats...don.genaro.where.are.you???

If you want me to explain more let me know....did you catch my post last night?

A friend told me to install a utility to speed up my 28.8 modem over the weekend. It tweaks the registers for Win95/NT to optimize packet sizes for your ISP. I think that it has improved my download times by at least 20%. This for $15 US. I am very satisfied with it and think it may help speed up things here. The product name is Tweakdun and a demo can be found at http://www.pattersondesigns.com/tweakdun.

petey....

yes....you are an ankle-biting wretch eh??
just out of the clear blue...you decide to
go to the wrong place...in front of your peers no-less!

this group is decidely better off with-out name calling
or baseless insinuations...if the material intimidates
your cognitave abilities...move on.

if i was in the pen....i'd hunt your sorry ass down and
make sure there was good reason to send me back...
as it is, i'm currently in houston and would love to
meet with you and show you a new toy brought back from
arizona...your fat head would be joined by a fat lip...yfp.

!;...cherokee..waiting.for.bombs.in.kosovo.and.houston.....

FWIW Short covering and fresh money coming in the market.On
my longterm cycles comments last July,called for a low second
third week of Octoberfor the SnP,we'll see.
The big goldcap stocks are getting slaughtered,those gold funds
are not going to give a very happy press release.
Lor is doing very well,sold again this morning for the second time
at 14.It is basing to go much higher.
Have a great trading day today

no, i understood that allright. just trying to get my guts in line before i put some money on the line ( hey, when you look at possible large % losses... maybe i should start looking at the raw value and limit myself, huh? )

stock puts. bond puts. my my, i'm turning into an ultrabear. timing is everything. obey your instincts. hmm...

but my guts says buy puts later today. problem - dunno whether i can. hmm...

I think I just saw where,
Machine Tool Orders Down 16%
This would suggest a a Recession or in a deflationary environment ........ Depression?

Wayne Angel today on CNBC, said he has never seen the Fed pump so much money into the economy before, 10-15% in just the last few weeks. Interestingly he referred to Gold several times, unlike him I think?

Are they scared or what?

With all of this US$ being shoveled into the economy they have to keep Gold down. XAU -5

HighRise

Morning stain...you said;

"Do you still buy Loral even in the face of an impending tech crash?"

Well...yes I guess I do. In fact I do believe I announced as much on K1 Thursday. Moved a huge pile of 401K "sideline" money into it. The stock promptly rose 14% the following day...and continues to show strength today. See it was oversold and.... well, never mind, you wouldn't understand.

Stain you said;

"Do you dress up in different wigs, depending on whether or not you are LGB, LIBERTY, BUGal, or REALISTIC?"

Actually stain, I post from one handle at work, and 2 handles at home. See I have two different account providers and....never mind, you wouldn't understand. Anyone with a tiny modicum of functional neurons would be able to tell the differences between my style, and Realistic's excellent posts.

Stain you said;

...."How long have you suffered from your sad syndrome of mental dysfunction?"

Sanity you mean? Well see, most of the populace doesn't have half the listings in the DSM attributable to their personality pathology's like yourself and.... never mind...you wouldn't understand.

Stain you said;

"What does Mr. Schwartz say about all this?"

Seems to be quite pleased with my work as well he should, it being excellent work and all. See the way that creative salaried professionals function...never mind,..... you wouldn't understand.

I am reposting this for the Canadians who weren't awake at 12:00 Mountain time this morning.

http://www.detaxcanada.org

No Posts in the last 1/2 Hour

First JP Morgan and now
Cigna saying recession!
Building to much inventory in Housing etc.
We are building capacity to serve the world
Savings way to low - historically low 1%
If it returns to normal or 6% this would dry up spending.
and credit is being cut off.

HighRise

I am out of here, I will try later. This is a waste of time right now.

HighRise

Stock market declines as we've had since July have presaged a recession 4 out of the last 7 recessions. In those 4 cases where a market decline effectively predicted a recession, the recession was driven by external factors ( e.g., oil embargo ) . In this case we have a sharp drop off in exports and losses in the financial sector due to external market turmoil. The chances are high that the market drop we've seen means that either a recesion is immanent or that we've been in a recession since the start of Q3. It could be that when the numbers are added up, GDP shrank in the US in Q3.

And yes, Kitco has been very unresponsive this a.m. I hope Bart can figure out the cause. I'm sure he's working on it.
-EJ

WHITE HOUSE LAWYER MILLS REFERRED TO JUSTICE ON OBSTRUCTION; HILL REPORT HITS CLINTONS WITH 'THEFT OF
GOVERNMENT PROPERTY'

**EXCLUSIVE DETAILS**

A congressional subcommittee has written a blistering report that will level new charges against the
president and first lady, accusing them of taking part in the 'theft of government property.'

The DRUDGE REPORT has obtained the report, soon to be released on, where else, the Internet [
http://www.house.gov/reform/neg/reports/whodb/whodb.htm ] -- and the more than 500 pages of back up
material outlining the committee's findings in the White House Database project.

The subcommittee's findings become the obsession of key players on The Hill over the weekend and was
moving under the media radar in scandal-fatigued Washington.

"No one here wants another scandal," one lawmaker told the DRUDGE REPORT in Washington.

It was not known late Sunday if the Database findings will be incorporated into the House Judiciary
Committee's impeachment investigation.

The story involves a White House computer database allegedly used as a political fundraising tool.

The report charges that "White House personnel took government data and transferred it to the
Democratic National Committee to assist in campaign fundraising."

The database, which cost 1.7 million in tax dollars, included records of people who attended White
House social events, meetings and other functions as well as the White House Christmas card list.

An investigative subcommittee of the House Government Reform and Oversight Committee has gathered
hundreds of documents and conducted dozens of depositions that it says shows a trail of unlawful
activity -- a trail that leads to the president and his wife!

"The pattern of evidence obtained by the committee implicates the president and the First Lady in the
possible theft of government property," the report states in its opening summary.

Concluding its two year investigation into the White House Database, the subcommittee charges that
"the president's involvement in the plan to convert government property to the DNC and the ultimate
accomplishment of that plan motivated the White House to mount an extraordinary effort to delay and
impede the investigation."

Deputy Counsel to the President Cheryl Mills [a Harold Ickes recruit] has been hit with a charge of
"lying to the committee and obstructing the investigation by withholding documents."

The Mills matter has been referred to the Department of Justice for investigation.

The DRUDGE REPORT has obtained a confidential secret memo from the woman who was co-ordinating the
computer project, Marsha Scott, the memo was given to the First Lady and White House big shots Bruce
Lindsey and Harold Ickes.

The First Lady, in her own handwriting, notes on the memo outlining the computer database and sharing
its information with the DNC: "This sounds promising, please advise."

Another Scott memo states: "This is the president's idea and it's a good one."

[The committee report states that Hillary Clinton "actually received a demonstration of the
Database."]

It has been learned that White House staffer Scott walked out of a deposition exploring the matter.

One Scott memo sent to Hillary Clinton and Bruce Lindsey on January 26, 1994 -- marked "confidential"
-- reveals that Scott was concerned about the loyalty of those who would work on the Database
project.

Scott wrote:

"Another unanticipated obstacle has been the recent downsizing efforts throughout the EOP [Executive
Office of the President] which resulted in the removal of... the young, computer enthusiasts who kept
up with the cutting edge technologies. When they were let go we were left for the most part with an
older, certainly less enthusiastic groups whose allegiance is, in my opinion, highly questionable."

A deputy White House lawyer had warned all involved in the project that data from the computer may be
provided to sources outside of the federal government "only for authorized purposes."

David Watkins, then assistant to the president, said in an eyes only "privileged and confidential"
memo: "The White House Database will be government property and can not be used by a campaign
entity."

The report accuses the White House of sharing files from the database with the DNC and the
Clinton/Gore reelection campaign -- even using White House staffers to transfer the information. The
trail from White House to DNC is detailed in hundreds of pages of documents and testimony.

The report's summary concludes:

"The committee has obtained evidence that Deputy Counsel to the President Cheryl Mills perjured
herself and obstructed the investigation to prevent Congress and the American public from finding out
that the president and the First Lady were involved in the unlawful conversion of government
property; the president and the first lady were involved in the unlawful conversion of governments
property to the use of the DNC and the Clinton/Gore campaign; and numerous other individuals,
including Erskine Bowles and Marsha Scott were also involved in the unlawful conversion of government
property to the use of the DNC and the campaign through the diversion of data and resources."

The WASHINGTON POST has taken a pass on the report, it has been learned.

FWIW Covered XAU PUTS and ABX ,LITTLE BOUNCE COMING UP.

CNBC spot: Peter Lynch and Don Rickles!

Okay, from the past year's events we can probably conclude that Buffett:

A. 6 months supply of silver from the COMEX--he admitted as much.

B. Sold 1/3 somewhere near this year's highs causing a tumble in price and perhaps leasing out another significant portion.

C. May or may not be covertly buying more at current depressed prices.

Question--have silver stocks on the COMEX continued to gradually fall or is there an unforeseen supply keeping us stuck in the 70 millions of ounces? --AG

Remember the 400 ton short position of LTCM that some of us ridiculed as being a baseless rumor? Here's an important post from yesterday that should be re-read...

Date: Sun Oct 11 1998 23:37
John B ( Looking at the Facts ) ID#77133:
-
The notion that there are massive short positions in gold by "funds" of one stripe or another was smashed by the Commitments
of Traders ( COT ) report issued by the Commodities Futures Trading Commission ( CFTC ) this past Friday afternoon at
3:30pm. Commercial firms ( those that use or fabricate gold for commercial purposes ) reversed their future positions from
long to short. Longs positions went from 105,870 to 90,553 contracts and short positions rose from 96,553 to 132,205
contracts. Worse,large speculators absolutely REVERSED their previous positions of two weeks ago by reducing short
positions from 32,286 to 12,919 contracts and increasing long positions from 13,373 to 36,588 contracts.

Two points - since commercials are considered the most knowledgeable of gold demand and supply trends, their move to short
is negative for the POG; and secondly, since large speculators are now 3 to 1 long over short forget about any hedge funds
being squeezed out of their short positions because there aren't any.

Finally, the dollar has lost about 12% against the yen in the last two days and gold did NOTHING. None of this sounds very
good to me for our beloved notions about the sanctity of gold.

It makes no sense to me that the POG has moved so little given the various supply and demand shocks the market has seen in the past year.

First we find out six months after the fact that Australia has sold its stock of gold and ONLY THEN DOES THE MARKET MOVE LOWER.

Then there are various threats which are NEVER CARRIED OUT to sell reserves of gold from various central banks and the POG moves down each time.

Then we hear from the World Gold Council that demand outpaces supply by 900 tonnes and the POG hardly moves. It is feasible that someone would step in to supply the market but to do so perfectly, ounce for ounce, without disturbing the POG to the upside or downside is unlikely.

Now we hear that demand for gold coins was more in the month of August than for the entire previous year. What does gold do? Hardly anything.

I once again question the pricing mechanism of gold and whether supply and demand is truly reflected in the price. What if, for example, the gold price were fixed artificially low given current supply and demand. As long as everyone had faith that the reported price was the actual price then sellers would suffer and buyers would benefit.

Since we are in the age of computers and information, it is easy to assume that stated prices reflect the current situation. Let me give you the example of the diamond industry. Rappaport puts out a pricing grid for the various grades, sizes, and shapes of finished diamonds. I have questioned to what level of sophistication he has studied demand for the specific grades, sizes, and shapes of diamonds. Having not been given credible evidence that this is actually done, his defenders state that the market trades diamonds at a discount or premium to the stated prices so that their accuracy is not actually relevent. The market decides the premium or discount, he is only providing a consistent starting point.

Well, I am becoming convinced that the pricing mechanism for gold is similiar but market participants seem willing to trade based on them being accurate. Gold will truly reflect its equilibrium when holders of gold actually calculate that it is more valuable to keep it than sell it at the stated prices. When people question where the glut of gold actually is which is reflected in the POG being so near the average cost to mine then they will realize that the price really is fixed.

If there is a waiting period to buy coins and the price is not rising, then the pricing mechanism is broken.

From journalist Crudele article on market rigging:

"How do I know the market is being rigged?
I really don't. But I am very suspicious."


He first reported on possible government funds being
funnelled into the market to stem a steep decline last October.
After a year in which to investigate and come up with credible
evidence of same apparently he has none.

Setting MS Explorer pictures OFF seems to help.

Thanks,
Gregg

fwiw Sell signal given for the XOI OEX

24K ( DeTax )
Great Stuff. The anti-tax anti-government stuff could only come from Alberta or a couple of spots in the Maritimes. I expect the philosophy explicit and implicit on the site would be endorsed by .5-1% of Canadians and it is wonderfully juxtaposed with Thanksgiving. Makes Presto look like a socialist.

For the Chicken Man ..
I know you asked someone else but I couldnt resist.
No the yen wont see 100 .. maybe 110 but after that
it will see 160 ..

for Nick ..
Sold lots of stuff..today and friday.. know what
you feel like .. selling is harder than buying.

Any large Gold shorting takes place mostly in the OTC market, where last year Veneroso and Co. estimated the o/s short position at 8000 tonnes.
Rumors now say this number has increased. The Comex is a visible market and the large trading occurs in the unregulated OTC market where the secrecy and privacy can be guaranteed.
Bullion banks and CB's do their dirty work there.
The Comex is mostly cash settlement, and very little physical Gold is ever
transacted there.
The Comex numbers speak for themselves: @ 53 MILLION ozs of Futures and call options o/s, and only @ 780,000 ozs of stocks to back up any delivery, which is rare.
If LTCM is short, you know where.........

Unfortunately, from a supply-demand perspective, gold is an inelastic commodity. Demand for this metal is often insensitive to supply price. If gold supplies decrease, buyers many times will simply go without or find a replacement metal.

Besides, the vast majority of gold is controlled by governments. Therefore, it becomes a tool for their foreign or domestic policies. ( sucks, huh? ) I'm hoping too!

when inventories of goods sit on the docks and they lay off thousands
of employees...a president is in the process of impeachment, debt
is at an all time hi bankruptcies, Well thats when I start to
buy put on the dow and calls on gold.

FWIW Utilities getting shot down ,I expect the DOW in the minus at
closing.XOI looks very bearish

Steve, I just wanted to metion that on yor GOLD MINING OUTLOOK PAGE, where you mentioned that the selling of stock by an insider at ECO was significant, found that it wasn't. My reason being is that on I believe October 1, CS First Boston downgraded ECO to a sell and the insider at ECO sold his stock the day befor and the day after the downgrade. Love your page steve, but I ng on First Boston's downgrade vs any insider information.

What is your son projecting for the various markets...

.....if you don't mind standing in your son's shadow.

......thanks

Ya gotta know its so. This rocket's about to .. explode.

Y2K-ness

Consider a standard 'bell curve', two deviations. It looks like a bell, ya know. SEC disclosures populate this 'curve'. Start from the left moving right.

Required disclosure of 'status of Y2K' as of June 1998:

35% of the 7000 companies reported NOTHING, NADA, ZIP to the SEC.

14% reported being in the 'AWARENESS' phase.

42% reported being in the INVENTORY/ASSESSMENT phase.

9% reported fixing and testing. ( They lead on the right of the curve. )

Of the 9% most mentioned having started their projects in 1995/6.


Move the 'bell curve' back in time to June 1996 where these 9% were just starting and everyone else was clueless.

Move the 'bell curve' forward to June 1998, these are the only ones fixing anything substantive. ( Note the 'status' of the others. )

From June 1998 to January 2000 is 18 months. Move the curve forward ..

It took the leading group of 9% two years ( generous assumption ) to move from project start to actually repairing things ( but not necessarily fixing them ) .

Now you see the distribution where more than 75% of companies fail to actually fix and test their systems on time .. they will go bancrupt.

This, strangely, is corroborated by the 80/20 experience in project delivery for this industry sector: 80% of projects are cancelled or failed to be delivered on time, 20% were delivered on time but with only an average of 40% of the functionality intact.

~~poof~~

Only 28% of power industry companies are currently fixing code ( let alone embedded systems ) .

~~poof~~

Senator Bennet, R-Utah, said, ' .. I expect that we will see emergency legislation and some sort of emergency crew in place in the first quarter of 1999 .. '

~~poof~~

Jo Anne effect: Y2K a year early, starting 1/1/1999, on systems which sort based on 'last year, this year, next year' algorithms.

~~poof~~

Y2K website survey .. only 13% say they are motivated to store anything extra.

~~poof~~

Preparedness and 'non-electric' suppliers being stripped bare by logarithmic increasing demand ( even though "no one" is preparing ) .

~~poof~~

.. and you?

~~poof~~

You do not have time left. The latest is December 1998. That's it. After this things will begin breaking in such a way that the public at large and the government will begin to move. Very few are moving now. Yet these few are completely overrunning the limited supply chains that might serve them.

Hide yourself. Find some way to retain some modicium of freedom to survive. Cities will become choke points as the authorities try to do their best to govern in a situation which will become ungovernable. At least in the country you may have a chance. Once people at large begin to be convinced that things will be destroyed then you will have NO CHANCE LEFT. There is time and you must use it to your best advantage.

Do not wait for someone to tell you that things are bad or worse. By that time you will be locked out either by public competition for goods/land/services and/or governmental controls.

~~poof~~

The rest of the world is behind the US by a large margin. Probably the safest places will be where people do not use electricity or petrol in their daily lives.

~~poof~~

Privation, violence, famine, pestilence.

~~poof~~

The overthrow of the world system where 90% of all 'modern' human activites stops working. But the size of the population doesn't magically disappear to compensate for the reduction of 'goods and services'. It doesn't 'adjust' overnight .. possibly in 3 months though?

~~poof~~

Prepare for the worst, hope for the best.

~~poof~~

Please be ready for this one.

There will be no second chances. You must believe that it is possible for the world we have built to fall apart. If you do not believe this then you will forestall actions which will admit this possibility.

It is not necessary for you to want this to happen or even to fell that it is likely to happen .. just that it is possible.

FWIW XAU went positive buy ,for today

Do you think that the only way to short a gold position is via the Futures market? What of the gold carry trade ( similar to the Yen carry trade ) ??? What of the forward sales by many mines worldwide?

So, is there some way of thinking in which you might agree that a short position in the purchase and resale of gold bullion certificates from a CB might constitue a position which might not be reflected in the ever oscillation futures market?

Is this not a possibility considering the prestigue of the 'economists' which were piloting that piece of work? Nobel prize winners, developers of 'the' formuli for derivatives risk assessment, etc.

Front page-Bold Headline: World Bank in talks over increasing its capital
Institution could help economies with curtailed access to private capital

Wolfensohn, "But I think that, as a matter of prudence [LOL sdrer] it's probably worthwhile to look at it and in the next six weeks. I have undertaken to review this with the shareholders just to see what the options are. I'm making absolutely no request at the moment. I'm just trying to prepare for what might be a very difficult situation."

What is the url of the gold mine page?
Thanks

This may well be one of the most important Market Comments I have ever sent out. The long awaited hour of change is at hand. From now till the end of the year will be an exciting time. Things are going to change and change on a large scale. The tectonic plates beneath the markets are starting to shift and move. I pulled out the big guns this time. I have analyzed the bones of a freshly slain chicken. I have analyzed the patterns made by a can of sacred worms thrown in the sacred circle. I have analyzed the spot patterns on the sacred frogs that dwell deep in the forest. I sought insight from the holy worm that dwells in the bottom of the bottle of Blue Guava Tequila. After all these rituals a vision came to me. Here is what the *Great Golden Prophet has seen in his visions.
THE DOW: I saw a vision of the Dow soaring aloft as if borne on the wings of ecstasy. I see stock brokers secretly thinking of trading in their Volvos and BMW's on a Mercedes with leather. All the traders will be standing around sipping on their Bombay Sapphire Martinis and congratulating themselves on having survived the great bear market of 1998. The mighty Dow will soar to 9000 once again. CNBC will be able to plan their second crossing of the 9000 mark. Abbey Joseph Cohen will be proclaimed a national treasure. Monuments will be planned bearing the likeness of Alan Greenspan in every city in the land. Yea, verily I proclaim it for all to see. 9000 on the Dow. 1150 on the S&P 500. All by Nov 10th. ( + or - 3 days ) . Yup, that's right. Novemebr 10th.
BONDS: I see the legendary and fabled slayer of inflation Alan Greenspan cutting rates once again and maybe twice. I see bonds rallying to the prospect of a future where inflation has been declared dead. I see a long bond of 4.5% and maybe even 4% down the road a ways. I see 6% 30 year mortgages. The bond traders will be happy indeed in the coming days.
GOLD: Gold will die a quick death. The XAU will go into complete free fall. 75 will fall first then 70 then 65. Gold may even go down and test the old XAU lows of 50. Gold traders will capitulate completely and dump all their shares. Gold will be declared dead and will rise no more forever. All of this will take place by November 10th. ( + or - 3 days ) . When the last gold bug has been hunted down and shot the Central Bankers will declare complete victory. But, here and there, a few wise old gold bugs who have eluded death will come out of their caves and quietly start buying. This will be the beginnings of the GREAT GOLDEN BULL. Like the legendary Phoenix bird rising from the ashes gold will slowly start to rise. Before the sun sets forever on the Annus Horriblus year of 1998 the XAU will rise again to between 85 and 90. 1999 will be even kinder to the gold bugs. I see an XAU of 110-120. The year 2000 will see the XAU rise to 150. Yes that is right, from 50 to 150 in 18-24 months. BUY GOLD MINING STOCKS BELOW 65. BUY LOTS OF GOLD MINING STOCKS BELOW 60. MORTGAGE THE RANCH AND SELL THE WIFE'S JEWELRY TO BUY BELOW 55. This is the long awaited last leg down. Never more will gold see these levels. Never.

XAU getting a nice spring-back to 76+. There are still some unbelievers in this DOW-rally crowd.

If recent history is a guide commercials were incorrectly long while the large speculators were correctly short.
In other words that gaging mechanism is not rock solid.

That's my frame of thought..Gollum's rattlesnake...who would have thought the Yen would have made it this far?...same with bonds...my gut says we haven't seen the end of this speculative excess...don't think the banks wiil give anymore $ to the hedge funds for their next margin call...that and only that would drive the Yen to 100...Expect the unexpected...BUT...let's not bet the farm...

Just a thought...Chicken man

M3 MONEY STOCK
NOT SEASONALLY ADJUSTED
BILLIONS OF DOLLARS

1989.12 4078.3
1990.12 4139.4
1991.12 4196.8
1992.12 4210.5
1993.12 4278.7
1994.12 4353.2
1995.12 4615.2
1996.12 4948.9
1997.12 5394.0

1998.01 5427.4
1998.02 5461.9
1998.03 5548.7
1998.04 5594.5
1998.05 5592.3
1998.06 5635.8
1998.07 5643.8
1998.08 5709.3

Personally you are probably not far off the mark.
But I would hazzard that the sheeple move a bit slower.
Who knows how much though.

Here's some recent emails about the NERC report.
It has been widely discussed of late.
Along with the Gartner report.

-------------------------------------------------Email #1
Monticello Nuclear Generating Plant

This plant is decidedly NOT OK. Oh, the management summary says it
*will be* okay, but the details given tell a different story. They
STARTED looking at the plant last June ( June, 1998 ) . They haven't yet
gotten around to contacting their suppliers, mainly because they
haven't yet tested their systems to find out what would fail come
1/1/00. But the report says there's plenty of time.

Here's what part of another message ( on Compuserve ) says about NSP,
the parent company for the Monticello plant ( the plant is about 50
miles NW of Minneapolis ) :

"And most of the power companies continue to do a snow job on the
public. NSP, the largest power company in MN and the one that
supplies power to the Twin Cities, states in the survey that they will
be Year 2000 Certified Compliant by 12/31/98. Certification, as
defined by the survey, is the LAST phase of Y2K implementation, after
awareness, inventory, assessment, remediation, testing, and
implementation. ( see:
http://www.dpsv.state.mn.us/docs/infocntr/year2000/define.htm )

"However, NSP representative Ken Ehalt was at the July 14 Task Force
meeting, and he admitted that they had only finished half of the 30
million lines of code that needed to be repaired, and that they would
not complete the assessment of their embedded chips until the end of
August 1998.

"When asked about the availability of their vendors to supply parts,
he admitted that vendor supply is short. Even more alarming was the
testimony of Terry Harman from Alliant Energy[western Wisconsin,
northern Illinois, eastern Iowa and southeastern Minnesota], who is
far ahead of NSP. [Note that Alliant is smaller than NSP] They have
already identified 170,000 embedded chips that need to be replaced,
which he believes comprise 98% of all the chips that need to be
replaced, and when asked about vendor supplies he responded, "some of
our suppliers have told us to go away." He stated this was a VERY
serious issue. "

The point is that any organization that is still inventorying and
assessing their embedded systems are in for a surprise when they try
to order compliant replacements. If the parts aren't available, can
the plants be made to run? Maybe, maybe not. But most likely they
won't run as reliably or safely without the proper parts.

-----------------------------------------------------------------------------Email #2

This is blue smoke and mirrors. the NERC is a PR function for the Power providers. I am part of one of the largest consulting firms in the US. We specialize in Y2K analysis. In the event that you do not know... Y2K response is divided into 5 steps
1. Awareness
2. Inventory
3. Remediation
4. Testing
5. Certification

In the state of Minnesota, for example, 90% of the utilites are in the awarenesss/inventory stage. With about 460 days left, that does not instill a sense of warmth in my soul. But if that isn't enough, It is considered standard that the "testing" phase will take up to 50% of the allotted time. Sorry Father, I work in this field every day, it is serious.. the NERC has only been addressing this problem for about 60 days. I made a presentation to the Northern tier NERC council and I had to tell them what Y2K was... Again, not something that instills the "warm fuzzys" in my soul. And in closing, please let it be considered that until the US Congress passes legislation that offers protection from liability lawsuits from Y2K shortcomings... The utilities aren't even talking to each other. That was why the NERC was chosen as a vehicle for common ground discussion. But, the protocols for such discussion have yet to be developed. No, it will happen. Will it be catastrophic?? No...

---------------------------------------------------------------------------Email #3

I was making a point about the NERC being nothing more than a PR arm for the utilities. I presented a Y2K remediation process to the Northern Region of the NERC ( in Minnesota ) and had to spend the first 1/2 hour explaining the problem. That doesn't make me feel secure about the NERC as a central clearing house for utilities sharing data on Y2K.

Since of the 5 steps I listed, a full 50% of the allotted time is spent in the testing phase, and from my findings in the central US, the vast majority of electric utilites are only now going into the "inventory" phase. it does not portend good.

Until the US Congress approves the relief from lawsuit for Y2K shortcomings legislation, power companies will NOT affirm their actual standings.

At two seperate utility companies that I conducted Y2K analysis for, the only concern that they exhibited was for their "billing" systems. After I submitted my findings regarding the "embedded" ( IC chips ) problems that were in their distribution switching systems, These two utilities had to revamp ( drastically ) their timetables for Y2K compliance. As of this writing there are NO, NONE, NADA power companies in compliance. At this writing, the NRC is contemplating taking ALL nuclear power plants off-line and pull the damping rods until AFTER the Y2K problems transpire.

As I have alluded to in several previous posts, I do not feel that the problem will be technological, I believe that it is sociological in nature. I can concur with your concerns about not inciting the public into rash actions.. that is why I only make these comments in closed communities such as the E-mail forum. There is also the dichotomy of whether we tell people the true scope of the potential problem so they can prepare and hence, potentially contribute to the possiblity of inciting impulsive and emotional actions or better to remain quiet and face the guilt of the potential of massive loss of life from the same impacts that will most likly happen anyways.. Father, I will leave the ethical implications to you for guidance, but I will "keep on keepin' on" sharing the meager information that I have with those on this forum that could benefit from it.

---------------------------------------------------------------------------Email #4

I should introduce myself first. I'm David Palm, a software engineer
in southwestern Wisconsin. My wife Lorene and I ( and two children, so
far ;-D ) are going full tilt to prepare for Y2K, as we are taking it
very seriously; details are available privately on request. I heard
about this list from Fr. Deacon John Whiteford.

My comment on this is that for those who are inclined to believe
beaurocracies [where's my dictionary?] this kind of report is great
news. For those who are more suspicious, we ( I guess that shows which
group I'm in ) tend to expect smiley faced reports even if things are a
complete mess.

I don't put much stock in NERC's report simply because it is a
dependent of the electrical utilities; an independent watchdog group
would have much more credence with me. This could simply be a case of
the fox guarding the henhouse and reassuring you that the hens are
just fine.

The bottom line with Y2K and me are that the statistics from 40 years
of software development say that ~25% of these projects will be late
and ~25% will be cancelled, although how do you cancel your Y2K
project? That's my everyday experience and that's why happy faced
reports don't really mean that much to me. The simple fact is that
many, many businesses and agencies started too late and cannot finish
in time no matter what kind of reassurances they issue. I have become
so accustomed to being lied to in industry and by the gov't that I
simply don't believe these kind of reports anymore. I'm sticking with
the cold facts: 25% late + 25% cancelled = Big Breakdown.

---------------------------------------------------------------------------GPS Email
This one has me thinking about what these experts are up to?
---------------------------------------------------------------------------
I just went into the link you suggested and the article has been pulled by
DCI, what timing!
I believe I know what you are getting at.
If the time for what the software requires is derived from the GPS, then
yes there can be problems. It is all dependent on what the references are
and what the software requires.
This is the next heated debate on the GPS topic.
A group of us got to talking at the ION-GPS-98 meeting last month about
this issue.
Several people felt that things such as real time DGPS will not be a
problem because all times will be relative and all incorrect. Now the
question is what will the user software do with these incorrect week and
date times.
What is your feeling on this?

Thank you,
Franck Boynton
VP Technical Sales

P.S.
If dialog and questions are exchanged, please do not delete the previous
dialog. Just add your questions or answers. Thanks!


Navtech GPS Supply
6121 Lincolnia Rd #400
Alexandria, VA 22312 USA
ph ) ( 703 ) 256-8900 ph ) ( 800 ) 628-0885 fx ) ( 703 ) 256-8988

Personal mailto:fboynton@navtechgps.com
Ordering mailto:orders@navtechgps.com
Web Page http://www.navtechgps.com


-----Original Message-----
From: Nick Laird [SMTP:sharefin@cairns.net.au]
Sent: Saturday, October 03, 1998 4:02 AM
To: gpsteach@navtechgps.com
Subject: Year2000

After reading your site info on GPS's and the Year2000 bug.
I was wondering if you've read this?

http://year2000.dci.com/articles/1998/09/30gps.htm

Specifically this.

"Therefore, all software dependent on the GPS clock will have to be
completely rewritten. If it isn't, systems could be at risk."

At 2:32PM EST XAU is at 76.35 up from todays low of 71.41

Kaplan's site:
http://www.goldminingoutlook.com/

Buckler's site:
http://www.the-privateer.com/gold.html

Daily crb news:
http://www.crbindex.com/reviews/story2333.html

Bridge, here is the address for Kaplans:

http://www.investor1.com/topframe_kaplan.html

Samuel 8.10 So Samuel told all of the words of the LORD to the people who were asking a king from him.
He said "These will be the ways of the king who will reign over you; he will take your sons and appoint them to his chariots and to be his horsemen, and to run before his chariots; and he will appoint for himself commanders of thousands and commanders of fifties, and some to plow his ground and to reap his harvest, and to make his implements of war and the equipment of his chariots. He will take our daughters to be perfumers and cooks and bakers. He will take the best of your fields and vineyards and olive orchards and give them to his officers and to his servants. He will take your menservants and maidservants, and the best of your cattle and your asses, and put them to his work. He will take the tenth of your flocks, and you shall be his slaves. And in that day you will cry out because of your king, whom you have chosen for yourselves, but the LORD will not answer you in that day."
But, the people refused to listen to the voice of Samuel, and they said, "No! but we will have a king over us, that we may also be like all the nations, and that our king may govern us and go out before us and fight our battles." And when Samuel had heard all the words of the people, he repeated them in the ears of the LORD. And the LORD said to Samuel, "Hearken to their voice, and make them a king."

**************
And after these words, you may read what is told of Saul who was made king and of their kings in the Book of Kings. And of the punishment of the people by the LORD for the wickednesses they allowed their kings to do.

Sure seems like it!

Samuel 8.10 So Samuel told all of the words of the LORD to the people who were asking a king from him.
He said "These will be the ways of the king who will reign over you; he will take your sons and appoint them to his chariots and to be his horsemen, and to run before his chariots; and he will appoint for himself commanders of thousands and commanders of fifties, and some to plow his ground and to reap his harvest, and to make his implements of war and the equipment of his chariots. He will take your daughters to be perfumers and cooks and bakers. He will take the best of your fields and vineyards and olive orchards and give them to his officers and to his servants. He will take your menservants and maidservants, and the best of your cattle and your asses, and put them to his work. He will take the tenth of your flocks, and you shall be his slaves. And in that day you will cry out because of your king, whom you have chosen for yourselves, but the LORD will not answer you in that day."
But, the people refused to listen to the voice of Samuel, and they said, "No! but we will have a king over us, that we may also be like all the nations, and that our king may govern us and go out before us and fight our battles." And when Samuel had heard all the words of the people, he repeated them in the ears of the LORD. And the LORD said to Samuel, "Hearken to their voice, and make them a king."

**************
And after these words, you may read what is told of Saul who was made king and of their kings in the Book of Kings. And of the punishment of the people by the LORD for the wickednesses they allowed their kings to do.

t was bound to come
Rainy day for T-bonds

By Michael J. Bazdarich, CBS MarketWatch
Last Update: 1:51 PM ET Oct 12, 1998
Also: The Best of Baz


LOS ANGELES ( CBS.MW ) -- I warned two weeks ago that while "the bond
market has had almost everything its own way," a mid-rally correction could
still occur. Well, here's that rainy day. After an explosive rally the week
before last, there was an implosive sell-off in T-bonds over the last four days.

This was not a normal sell-off, reflecting expectations of strong growth or
fears of rising inflation. Rather, it seems more a case of market dysfunction,
of a flight to cash and liquidity. One indication of this is the fact that
short-term interest rates plunged, even as bond yields ( $TYX ) spiked
upward. Similarly, the buzz from the Street that various major trading houses
have ceased market participation. They are neither buying nor selling; they
are out.

Sure, various hedge funds liquidated long T-bond/short Euro-yen positions in
the last few days. This may explain where the selling pressure came from,
along with the preceding buying pressure. However, the lack of market
participation by trading stalwarts explains why the successive buying and then
selling have had such huge price effects: they were trading in a virtual
vacuum.

Episodes of financial market dysfunction occur periodically in history,
during regimes of gold standard, silver standard, and, currently, fiat money.
They occur not because of the structure of the monetary system, but because
of the structure of human nature, along with a boost from inept monetary
policies.

One such episode was in October 1987, during and
just after the stock market crash then. Though
economic circumstances were somewhat different
then from now, the fear that gripped financial
markets was the same. In response, the Federal
Reserve announced an intention to supply liquidity to
whomever needed it. Market rout subsided, and
sell-off turned into rally within a few days.

Gold standard issue rattled cages

Another such episode was in early-1933. Then, the
departure of England from the gold standard
generated speculation that the U.S. too would leave
gold. Capital flowed out of the U.S. to hit from such
an effective dollar devaluation, and the crumbling
U.S. banking system compounded the problem.

Despite three years of depression and deflation,
interest rates soared. That time, the Fed took no
action to quench the market's thirst for liquidity, apparently believing that a
show of anti-inflation resolve was necessary. Though the frenzy subsided
after some weeks, an economic recovery faltered, and depression continued.

Through these and other episodes under varying economic circumstances, the
main difference in outcomes has depended on the response of the monetary
authorities. When the markets crave liquidity, the central bank can calm the
crisis by providing the that liquidity.

Aren't those provisions of liquidity inflationary? No, they forestall deflation!
Furthermore, the central bank can withdraw the provided funds as the
craving for them subsides, again avoiding any actual inflationary impact.

It was for just such episodes that the Fed was created, "to provide an elastic
currency," in the words of the Federal Reserve Act of 1914. It bungled its
first such major experience in 1993, but as late as 1987, under Greenspan, it
was fully versed in "feeding" liquidity frenzies.

The Fed has the wherewithal and the know-how to counter a liquidity crunch
this time. It requires only the recognition. If I am overstating things and last
week's selling vanishes this week, the Fed can go back to normal affairs in
these non-normal times. However, if there really is a mounting liquidity
crisis, some quick action could quell it in short order.

Once that is accomplished, market action will hue once more to the
fundamentals of Asian recession, faltering U.S. growth, and deflationary
pressures, forces which mean downward pressure on bond yields, not the
upward pressure we saw last week.

These forces are daunting in and of themselves. They are harder to
counteract, but also more rational than the liquidity mania which seems to
have taken hold of lat

Another article on the illegal PPT...

http://nypostonline.com/business/5459.htm

I have a theory that whenever anyone posts a ton of text, it hammers the Kitco server, probably when multiple processes try to access the record in the database. This seemed to happen yesterday even in the wee hours when I posted some stuff from a pay site since I couldn't post the URL. So, to test my theory, I shall post a ton of text in exactly 3 minutes from the timestamp you see on this post.
-EJ

I didn't get a chance to post my big block of text. I just got back in to Kitco. I'll have to run the test during off-peak hours.
-EJ

BART, is it possible for all post with 350 or more words be automatically switched over to K2.
This would allow those who have might have interest in long drawn out posts to go over to K2 while K1 would be more to the point.
Also if a recognition program were available, double or triple posts might be automatically deleted before they would clutter up the posting boards.

Bart,
A couple of weeks ago I responded to a request on your page for help in solving a ODBC-Microsoft SQL Server-C++ problem with dates. If you are using MS-IIS, MS-SQL Server, C++, cgi-bin and ODBC for this forum then there are plenty of remedial actions you make take to boost performance. I can help tune your database gratis to make this site flow. E-mail me if you need help.

i'm trying to store recent comments at http://www.comp.nus.edu.sg/~limweech/kitco.html the page will be updated at 5 minutes interval when kitco's server can be accessed. i hope this helps to reduce the load on kitco's server.

COMEX Metal Warehouse Statistics for Oct. 12

-- TOTALS
Gold 784,569 + 0 troy ounces
Silver 73,864,341 + 0 troy ounces
Copper 68,132 + 101 short tons

i'm trying to store recent comments at http://www.comp.nus.edu.sg/~limweech/kitco.html the page will be updated at 5 minutes interval when kitco's server can be accessed. i hope this helps to reduce the load on kitco's server.

Time to increase that cash position?
Fund manager Murphy has bearish long-term view

By Don Scott, CBS MarketWatch
Last Update: 3:55 PM ET Oct 12, 1998
Foreign exchange


ORADELL, N.J. ( CBS.MW ) -- Market analyst and technician John Murphy
correctly called the start ofthe early summer rally, then prudently warned
of its demise in July.

Now that we're into October, Murphy sees more trouble ahead for large
stocks.

"First of all, from an overall market standpoint, I am
still bearish on the stock market and I still hold the
view that we're in a serious bear market that could go
on for a much longer period of time, at least a year,"
says the president of MurphyMorris.com.

Murphy sees both tricks and treats here as the
fourth-quarter progresses.

"My general forecast had been for a bottom sometime
during October and then a rally, during the fourth
quarter, which could recover maybe half of the
previous decline, maybe get us back up to 8000 or
8200," says Murphy. "Unfortunately, my longer term
view is that once we've done that, there's a very
strong chance that we're going to turn down next
year, and that's when we get into 5500 to 6000."

He told his Web site subscribers recently the October
bottom may have been been set on the first day of the
month.

Murphy believes the world entered a deflationary cycle with the onset of the
financial problems in Asia a year ago. "Bonds are going through the
roof and stocks are going down," he notes.

He's been suggesting since July that investors re-allocate some of their
portfolios into bonds. And lately he favors money markets and short-term
fixed income securities.

Should people be putting their 401 ( k ) money into cash now? "Yes." says
Murphy. "If they have that option I think they should."

But what if there is no cash option, or if an individual feels he or she needs to
keep stocks in the mix? "Go with income-oriented funds, equity-income
funds, or those that go for defensive stocks," Murphy says.

If you're buying individual issues, stick with stocks that typically benefit in
this type of environment: utilities, gold and stocks that pay dividends.
Examples of these so-called defensive stocks include food, beverage, tobacco
and large oil stocks. Murphy says attractive food stocks are Campbell Soup
( CPB ) and Sara Lee ( SLE ) .

Among utilities stocks, electric utilities have been leading the way lately, but
Murphy thinks they may be overdone. "You don't want to chase the
electrics," he says. "Regional phones are just breaking out to the upside. You
can almost throw a dart at the board. BellSouth ( BLS ) , BellAtlantic ( BEL ) ,
and Ameritech ( AIT ) have set new highs," he says.

Nothing like gold; just be wary

But when it comes to the gold stocks, be careful. While Murphy likes the
group, it's jumped about 50 percent in the last month. His two favorites are
Homestake Mining ( HM ) and Placer Dome ( PDG ) . He thinks they might
move down to attractive buy points if the broader market rallies in October.

"I'm reluctant to chase gold stocks," he says. However, "if we do get a rally
in the stock market over the next month or two, I think you'll see a pull-back
in utilities and I think you'll see a pull-back in gold."

When it comes to the big picture, Murphy says the rules have changed. He
worries that many on Wall Street have never experienced a bear market.

"The long term indicators I look at -- the ones going back twelve, twenty and
thirty years -- are signaling that this downturn we're experiencing now is not
the same thing that we've seen since the start of this bull market," warns
Murphy. "It's different and it looks a lot more serious. That being the case,
the only conclusion we can draw is that it will be deeper and it will be more
long lasting."

Murphy suggested raising cash last July and continues to advocate increasing
its percentage of a portfolio. "There comes a point in this whole process
where cash is king, and I think we may be at that point."

Does anyone have gold turnover figures for Hong Kong ? or is this opaque?
tks in adv
cpo

"I still believe the implications of Y2K will dramatically effect this market as the year 2000 approaches, in fact we are now seeing this at work in the marketplace with the increased premiums on smaller gold coins like the British Sov and the Swiss and French 20 F."

Daily Buy/Sell Prices: http://golddealer.com/forecast.html

Dow/Gold Ratio = 26.99. The 233 day moving average is 28.66

XAU/Spot Ratio = .257. The 233 day moving average is .247

the posting page wasn't working at http://www.comp.nus.edu.sg/~limweech/kitco.html
it should be okay now. testing..

That must be from where the Fable was derived.

Prudent Bear, Ultrabear, Comstock Capital, etc.
-----------------------------------------------------------------
http://www.pathfinder.com/fortune/investor/1998/981026/inv.html

His allocation: 80% Cash, 10% Bear Funds and 10% Gold shares.......

I don't know if this has been posted but I read a site that said
the new Russian gold coins were to be offered in two sizes 1000 and 5000
Rupies. The 1000R coin is to have 10 R of gold in it ( $.63 ) and the 5000R coin to have 50R of gold or $3.15.

This is a 99% devaluation of the paper money of that Country.

My advice is to buy your Gold and Silver coins now!!!!

Has any one else hear about the coins? Is this accurate?

Thanks, GD

Thanks to everyone who has read and/or commented on my site. Please
use the following address:

http://www.goldminingoutlook.com

All other addresses are obsolete and/or impostors!

I just watched the same broadcast. Wow. If anyone told me six months ago that I'd see that on THE national daily market news show in the US, I'd have figured them for a hardcore pessimist. His portfolio is exactly like mine, except substitute gold physical for gold shares.
-EJ

Gollum oft refers to folks who see a "currency/gold conspiracy". Speaking only for SDRer, the following is offered.

The "Gold Box" is a matter of strategic planning. One tends to forget, if one is American, that Europe has been pregnant with the Euro for a very long time. Even before Nixon abandoned gold, the European Union had established its first trade agreement in which the unit of account was a specific measure of gold [w/Turkey]. After that fateful Camp David weekend, Europe set about establishing trade agreements with countries that would, at some point down the road, become part of the Union. Each of these trade agreements clearly defined a unit of account that was a specific measure of gold. Gold as a unit of account has been 'field tested' by the Union for over twenty years.

2. To these strategic planners, the gold conundrum presented a core--if ironic--planning contretemps: gold, the stabilizer, their rudder, had to be discredited for any new currency to successfully be brought forward. Were gold to retain its historical "safe-haven" status, assets would flee fiat and flock to gold. Even if limited to affected Europeans-say the Germans and the French ( all of whom can't hide in the small Swissie closet ) - flight to gold would present severe operational difficulties. If the Euro were to be successful it had to appear to be a logical, sensible and potentially rewarding choice. It must appear, for Europeans at least, the only choice.

So, step one, central to all, was to publicly discredit gold as a monetary asset--incidentally protecting all fiats and happily dovetailing with USG policy--but, more specifically to allow for the Euro's debut. From the Jamaica Accords in 1976 [which prohibit the PUBLIC linking of a currency to gold], to the Reserve Bank of South Africa's sponsorship of gold producer hedging, to the "bright young things" at Central Banks deriding gold as a "non-productive asset" not worth digging out of the ground to bury in the vault ( S. Salvant, e.g. ) there has been concentrated purpose over decades: keep a nervous public firmly committed to paper and--as Springtime for the Euro approached--out of gold.

It has been a policy that has, in the mysterious way of Life, linked disparate players with disparate goals. It has been successful. That its success has caused grievous wounds to the financial system that "They" seek to repair is a logical consequence of the policy followed. Lack of a stable key currency lead to currency instability; currency instability lead to derivatives; derivatives lead to currency chaos. Currency chaos leads to gold. It just makes Strategic Operations more difficult. But not impossible.

3. It is easy to become addicted to TA, a useful and powerful market tool. Our 'addiction' makes it [TA] a useful and powerful tool for strategic planners whose purpose is NOT TO MAKE MONEY but rather to successfully execute strategic plans. Even folks who are not TA devotees are familiar with 'resistance level', 'support line, on ad infinitum. The gold market is a very small market to 'influence', particularly when the goal is simply containment, not profit.

4. Have monkey wrenches been flung into the works? Indeed yes. But be not mistaken about the talents of power. We who have lived only with peace forget the extraordinary achievements of misdirection and secrecy accomplished during the Second War World. From D-Day ( a project millions "knew" about but were ignorant of ) to simpler secrets like Enigma and Churchill's 'Canterbury Choice', successful governments [i.e., those that hold on to their power] are weaned on the liquor of lies. All told in pursuit of noble purposes, of course.

5. It seems probable and plausible, barring an absolute liquidity meltdown, that EU will successfully conclude gold operations in late January, early February 1999. As Eur-Lex clearly states EU gold holdings will be marked to market, it may be plausibly argued that gold, the financial asset sans liability, will then reassume its place as the Acknowledged financial Sun. Just in time for Y2K.

The 5000 Ruble coin will be 15 grams of 0.999 gold; the 100 Ruble coin will be 6 grams of 0.583 gold.

http://www.russiatoday.com:80/rtoday/business/news/98100906.html

This past weekend at the local country flea market, I picked up a 7.7 grain, 24k gold coin from a dealer. This was the only gold coin he had among hundreds of Morgans, Liberties, Eisenhowers, etc. silver. This coin is .400" in diameter x .018" thick, and weighs 7.7 grains. I looked at it under a stereoscopic microscope, it's obviously professionally minted, with very crisp numerals and letters and a mint mark.
On the head side, it's got a picture of some dude, and the words ( barely visible ) EMPERADOR MAXIMILLANO , then on the tail side, IMPERIO MEXICANO and a crude picture of a bird. It's dated 1865.
I would very much appreciate any information as to what it is that I have here.
Squirrel, this thing is tiny, I can definately see the point of manageability made by others on this subject. If I can come accross a digital camera, I 'll send you an image. I'm still lookin' at stamping presses.
I'll get back with you in the next couple o' days.
gb

I thought the first post didn't get through; also I misread the Russiatoday article. You've got the info now from the source.

I would like to remind you folks that we are still in a bear market. Nothing has changed since Aug 4 when the bear market was confirmed. The advance decline line looks terrible despite all temporary rallies. The bond market is correcting it's long advance and rates will resume their decline soon. We are in a deflationary phase that can't be reversed or altered by any politician or central bankers. Attempts will be made to reverse the deflationary trend but they are doom to fail. We had our runaway inflationary phase between 1966-1982 when inflation peaked at 14.4 % annual rates.

According to an expert on Mexican coins I queried on a coin such as yours, the Emperador Maximiliano 1865 is a modern piece made for tourists - not of Mexican government mintage. These things appear fairly often in the non-US gold coin auction at

http://www.eBay.com

The Canadian $100 bills I've been receiving lately have been super new with consecutive serial numbers. I guess the Russians and Asians are not the only ones cranking the printing presses. Go Canada! Print! Print!

Well Well Well, ( Three holes in the ground )

It's all been happening here hasn't it? US$ tumbles, stock market surges in Japan, Bond market collapsing.....

And gold doing nothing.

Not very good news. I myself have lost $A900 in the last week with a resurgant Ozzie dollar.

Yen goes down, gold goes down. Yen goes up..... gold does nothing.

Stock markets go up, gold goes down. Stock markets go down.... gold does nothing.

The only thing I will say in support of the goldbugs is the issue of manipulation.

For the fourth time now, thee has been a rumour of a CB sale just as gold rallies. Last week it was the IMF sale. I must admit it does seem like more than a coincidence.

Live Long and Prosper.

Thanks a tonne for the Kitco mirror site; it is terrific!!!!!! This is a MAJOR achievement.

what the heck. The color indicates 24K, ( looks like a Maple leaf, not like an Eagle ) , but hell, it could be brass.
Do you Know anything more about this little bugger, like if it's really gold? ( I FEEL KINDA STUPID ASKIN' )
thanks
gb

Well put. I have come to a similar conlcusion myself, though not as well thought-out. The powers that be will keep the POG bouncing around until the end of the year, then give it feet with the launch of the Euro. We goldbugs must keep in mind the political nature of gold and the value it holds for a successful launching of the new currency system. It all makes sense. Gold has bottomed and will now float back and forth between $285 and $300/oz. Come January, or thereabouts, 1999, gold will start a slow but steady rise to between $340/oz and $375/oz. The closer we get to Y2K, the faster and more consistent the rise. For now, we gold lovers must be content to bottom fish for inexpensive mining stocks and coins. This is almost becoming a no-brainer IMVHO.

For those of you who hold European stocks: there is much grumbling about conversion of par values
Only the Germans are ready. Months ago they changed the par value of all German stocks to nil. Nil converted is nil. Hopefully, not a harbinger...{:- )

Good post Sir...an agenda can be seen by all. Especially those that wish for such. The reality is that, adjusted for inflation ( dollar loss of purchasing power ) , Gold should be at least $600-$800 an ounce.

Manipulated...probably but even if not the worm will turn. Question is do you fold before this. Never put all your eggs in one basket...then, again, dont forget to put some eggs in all the baskets.

I believe manipulation...but this matters not. Beliefs are as the wind...just air. CENTERPOST.

Tom

If I recall correctly, Russia had +/- 9000 tons of gold in the late 70s. Do you have any idea of what happened to the other 8500 tons? Anyone?

Best regards,

Pete

So far we have seen little sign of US inflation. The Yen, the stock market, the price of onions in India, may wander up and down, but untill we see real inflation we won't see much movement in gold.

We did see some for a while as various short positions were covered due to the LTCM thing. That is quiet for the moment.

Now we watch the bond markets. Movement from long term to short term paper is not particularly inflationary, but movements from the US bond markets back to foreign shores is.

Japan looks like it;s getting serious about solving it's banking problem and has also turned more aggresively toward showing leadership in working out the Asian crises.

As Europe calms, and we get closer to the Euro, we may well see more weakness in bonds and the dollar. If so, gold will begin to move again.

Gold is a classic hedge against inflation.

Spock--there's a multilegged tax write-off on your shoulder. --AG

Thanx for your replies.

However even Bill Buckler described gold's reaction to the Yen surge as "anemic"

True, gold is a hedge against inflation, but it's deflation that the world is heading into.

Live Long and Prosper.

Till tommorrow.

Steve, I thought you were on extended break. Even with your recently-posted URL, the most recent date I can bring up is Sept 28.
I *need* my daily hit of your sage advice. Suggestion? Thanks

The percentage loss is 100% if you bet the wrong way...and as you never write a call or put ( the seller or the person on the other side of the "bet" you will never lose more than the option costs...that your "bet"...same as playing polker or craps....Please let me remind you never...never.....never sell,write or anything like that to an option...you always "buy" options first then sell them...buy calls..market going up......buy puts if you think market going down.
LTCM was more than likely writing options....don't wannnabe like them!
Don't trade "finacials" with a stock broker... he will be placing your bet at the Philly exchange ...Nooooooooo!! liquidity... ( all the trading takes place in a phone booth!!!! )

Just a thuoght...Chicken man...

Is there a gold/currency conspiracy? I think ther may well be one.

If a person thinks everyone is out to get him, we call it paranoia. What if everyone really IS out to get him? Then he's not paranoid, he's just realistic.

There are some real indicataions that the price of gold is "regulated". Also that gold is treated as a currency between central banks.

Consider gold leasing. If you lease gold you have to pay back in gold, plus interest paid in gold. No paper allowed.

Does that make it a conspiracy? I think it does. Since we are told out front that gold is to be treated as a free market commodity. If it is then regulated through some hidden agenda for WHATEVER purpose it is conspiratorial.

Without knowing the exact agreements and dealings between the central banks or the dealings and woeking stock of the LBMA and OEX markets it is hard to work out motivations, but just the fact that the lack of openess itself exists is indicative...

Bonds Down that means interest rates are up - right?

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

HighRise

my stock investments.It's my paper position that's going south.

Maybe the measley dividends I get could be paid with gold.So far,my mines are the only assets making money------- soon,they'll go broke.

Not only is this market full of rattlesnakes,but , the irony is killing me.

Yes. Bonds down=rates up.

Notice that both long and short paper is down. The dollar is down too.

Even though the metals don't show it for the moment except for silver being up a bit, this is bullish for gold if the trend continues.

I thought I read somewhere Russia was forced to pledge it to the "foreign banks"that helped rescue the ruble the last time they got in trouble....one guess who got the gold...Russian ain't gonna let that happen again.... what all this news about Russian gold coins...Ahhhh..love it

Just a thought...Chicken man..

Even though stocks in general were up today, utilities took a hit. This too indicates rates up, bonds down.

Things are going to get interesting.

The Fed lowered rates, reluctantly, just a smidgen and suddenly flight money, speculative money, and hedge fund money came boiling into bonds and took rates down a ton. Then the dollar started to fall, and here come rates right back up again.

Ever see a Fed get whipsawed?

Holy Cow, said Indians ( guys in India, not in America ) ...

Russians switched to RUPIES now....
...................................

I told you, guys, Russia is in trouble...

By the way, why do you, guys, call those "metal"
rubles "gold" ruble coins??? What is all this
excitment about? Looking for some fun?...

On the serious note, Russian situation is extemely
bad, I talked to some Moscow people today, they said
it's a BIG MESS....much worse than "yesterday".

Sitting here on the bank just watching the river roll by a man sees some strange things sometimes.

I suddenly feel very alone out here all by myself. I think I'll move on along...

Does anyone know what happened to the mining company U.S. Gold? Ticker USGL. I noticed it quite trading back in late September. Did someone buy them out or did they fold?

http://www.mises.org/fullstory.asp?FS=+%3Ch3%3EMarket+Failure%3F

http://biz.yahoo.com/rf/981012/4n.html

The lie that there is such a thing as deflation is very repugnant to me. There is absolutely no reason to believe that the U.S. government has somehow shown restraint not inflating the currency.

After the 1970s the government has embarked on a successful policy of suppressing the indicators of inflation. They have redefined inflation by those commodities that are the most easily manipulated. Does anyone really believe that over the last 20 years government has suddenly stopped inflating our currency and has somehow managed to stop their spending spree? Nothing even close to this has occurred. They just got better at covering it up.

This is why $30,000 gold is not farfetched. The deflation propagandists are quick to point out the falling prices of commodities in foreign countries. Currencies that become worthless are not a sign of deflation. Quite the contrary. The reason those goods are now so cheap is because the local currency has been inflated to exponential levels and the governments printing this money cannot cover up their inflation.

Anyone who believes the inflation lie does not understand G-8 and its role in maintaining a predetermined parity between major currencies. The purpose of G-8 is to ensure that everyone inflates at the same rate. Without a basis of comparison between currencies there is no way to tell if country A has inflated against country B. There is absolutely no way to determine inflation without comparing a unit of trade against some other known quantity.

Anyone who believes in the inflation lie should run the opposite direction of gold and buy dollars. Sorry for the long post but references to deflation make me violently ill. My only remedy has been to try and set the record straight.

Gold ( CMX )
Dec
298.60
298.80
297.80
298.40b
+0.20
10/12/98

Now, let's see Gold move.....come on world, give Gold the respect it deserves.

HighRise

Where's all the money going that the Fed's been creating to increase the money supply? How come no inflation from this, or rather, where is the inflation? Or did Greenspan pull back on the stick too late? JP says all the gauges read "deflation." Including, of course, the price of gold.

However, the retail price of gold and silver is rising. How odd.
-EJ

http://biz.yahoo.com/rf/981012/bam.html

Now this is better,
Gold ( CMX )
Dec
298.60
298.80
297.80
298.60
+0.40
10/12/98
18:30

HighRise

August 17, 1998 [Barron's Online]

American Bubble

As in the 'Twenties, it will burst, bringing deflation
and painful recession

[thin rule]
By David W. Tice

While Wall Street wonders whether these past few weeks
signal the end of the stock market bubble, a more
important question for Main Street is, "Is the economic
bubble ready to burst, as well?" This bubble is the
result of America's new found limitless ability to create
credit, which in turn has induced businesses to expand
too far and for consumers to spend far beyond their
means.

This credit-induced bubble will burst, sooner rather than
later. We've seen credit bubbles popping elsewhere, in
Japan nine years ago and in Southeast Asia recently.
These economies imploded because expanding credit turned
quickly into contractions. It could happen here, leading
to a self-feeding economic and financial collapse.

This, of course, sounds crazy to anyone looking only at
low inflation, moderate interest rates and a Fed chairman
who seems to have the economy totally under his control.
But there is more to economic health than stable prices.
Just because most recessions start with a rise in
interest rates, it doesn't mean they always do. A
tug-of-war between supply-driven deflation and
credit-driven inflation has yielded the stable price
level so prized today by the Fed and most investment
strategists. By separating these countervailing forces,
we can see the end of the credit bubble.

Let's take deflation first. Effective use of technology,
corporate layoffs and manufacturing outsourcing have
generally raised productivity and reduced costs.
Meanwhile, a worldwide capital-spending boom has brought
down the marginal cost of production. As a share of gross
domestic product, American capital investment has risen
to 17% in 1997 from 13% in 1990, representing a 30%
increase. Specifically, half the real annual increase in
investment has been in the high-tech sector.

One would expect all of this new capacity and efficiency
to result in lower prices overall. In fact, we should be
asking ourselves how consumer prices can be increasing at
all. Yet consumer prices are creeping higher at a rate of
1%-2% year. This rise in the general price level wouldn't
have been possible without substantial monetary stimulus
in the form of rampant credit and the issuance of new
equity. This liquidity boom has been the force tugging
frantically against deflation, creating a dangerous asset
inflation in stocks, real estate and luxury goods.

Our environment of easy, breezy credit can be
demonstrated both anecdotally and with hard numbers. The
U.S. money supply as measured by M3 has been growing at
an annual rate of more than 10% for the past year. The
balance sheet of Japan's central bank has recently grown
at a 50% annual rate, providing a massive injection for
bond and equity markets around the world. Fannie Mae and
Freddie Mac have expanded their assets at compound rates
of 17% and 31% over the last five years. U.S. bank loans
for securities purchases have increased at a 50% rate
over the past year. Meanwhile, total household debt is at
a record percentage of GDP, and has grown as a percentage
of income to 95% from 68% over the past 10 years. For
that we can thank the home-equity loan, the six-year car
loan and junk mail with credit cards attached.

The boom in home-equity loans is especially worrisome.
When individuals who were arguably overleveraged before
are given the ability to borrow 125% of their home value,
families can easily live beyond their means.
Additionally, a tremendous amount of money has been
borrowed by consumers in anticipation of stock-market
gains, much of it in home-equity loans or loans against
401 ( k ) accounts. This is in addition to margin debt,
which has recently swelled at a 50% annual rate.

[Media] Economic bulls argue that credit expansion as
measured by the government has been modest, but
bank credit is only one ball in the credit lottery. Just
as our changing economy made the focus on M1 obsolete,
how we judge the growth in leverage in the economy is due
for an update as well. The formal banking system is
responsible for a much lower percentage of total lending,
thanks to a proliferation of new types of financial
institutions. Now there are also derivatives and
outperformance contracts, esoteric swap agreements and
overseas borrowing. There are loans made by non-banks
that are securitized and sold to institutions to the tune
of billions of dollars. We can't forget auto leasing, an
arrangement responsible for 30% of new car financings but
a figure still not included in the Federal Reserve's
accounting for consumer debt.

Loan quality and pricing are also important variables,
and it is disturbing that credit spreads are at record
low levels. The respected former chairman of Wachovia
Bank said recently that credit standards were more lax
than at any time in his 40-year career.

There is a precedent for this kind of behavior; we simply
haven't witnessed it in a while. In the 1920s, the Fed
was also fixated on the general price level while
speculative and credit excesses fueled the economy and
asset inflation. In America's Great Depression, Murray
Rothbard argued logically that inflation from credit
expansion obscured the deflationary forces in the economy
that resulted from an increased supply of goods. The
resulting low inflation of the 1920s persuaded the Fed to
maintain an expansionary policy. This fueled the boom
further and set the stage for the Depression.

Today's bubble will burst as did the bubble of the 1920s
and we will face the potential for dangerous deflation
accompanying a very painful recession. The trigger will
undoubtedly be a broad and deep stock-market decline set
off by any number of factors, most likely a sharp decline
in corporate profits or a significant problem in a
foreign economy ( but probably not higher interest rates ) .

After the credit-induced stimulus side of the equation is
wiped out by a stock-market plunge, the economy will be
left with the deflationary side growing stronger as
demand falls dramatically in the recession. Once
deflation starts, no matter how hard the Fed tries, there
could still be a contraction in the money supply just as
there was in the 1930s in the U.S. and currently in
Japan.

The prevailing view today is that the 1930s Fed made a
huge mistake by being restrictive and, having learned its
lesson, will be extremely accommodative to avoid any
future deflationary bout. Rothbard found that the Fed
tried mightily to inject reserves, yet still there was a
contraction in the money supply.

Again this time, bankers will realize that they can't
continue to aggressively extend credit once delinquencies
start going through the roof. Therefore, again it may be
impossible to expand the money supply and prevent
deflation.

Let's hope we can avoid mistakes in trade, tax and
monetary policy in the recession's aftermath that could
make a terrible recession even worse. The problem is that
it will be easy to make mistakes in an effort for a
"quick fix" to solve millions of citizens' significant
pain. It's just a shame that our policy-makers let the
party go on this long.

Watch the Bonds.

Wayne Angel today on CNBC said that he has never seen the Fed increased the flow of US$ as the 10-20% in the last few weeks.

HighRise

Donald, imagine the reaction if this bill does not pass in the upper house in Japan? It seems all hope is hanging on this... Asian markets seem to be holding back, waiting for the answer...
-EJ

http://maelstrom.stjohns.edu/CGI/wa.exe?A2=ind9810&L=hayek-l&F=&S=&P=3398

http://biz.yahoo.com/rf/981012/zg.html

The language we have at our disposal to try to communicate on the events in the financial and economic spheres is kind of pathetically imprecise and inadequate. It really is an impediment to clear thinking and sharing of understanding.

Politicians are addicted to inflation just like crack addicts. There is nothing short of societal breakdown that is going to stop them from pumping money into their favorite pet projects.

Where is the money going you ask? You are supremely naive! How about the billions of dollars that are not even counted as being a part of the official budget. I'm talking about things like Social Security.

I suggest you become more familiar with the loopy accounting practices used by our uncle. The official budget represents a fraction of total expenditures. Who knows how much is being spent outside of the budget?

There are NO politicians who desire to commit political suicide by slashing government spending. The books are cooked by crooks.

Gold ( CMX )
Dec
298.60
298.80
297.80
298.80
+0.60
10/12/98
18:38

HighRise

That Japanese news was on the wire at 7AM and the story was never reported. I posted a similar story here at 7:30 AM. All day long the TV treated it like a closed matter. Mr. Kan, the opposition leader says he will call for parliment ( diet ) to be dissolved rather than allow it to pass. I am not sure what the outcome will be.

Then you have the U.S. Congress item I just posted. That is going to take a while for those requirements to be satisfied, if ever.

Meanwhile Brazil burns. Never know it by the market action today or tonight. What am I missing?

Imagine the Fed keeps pumping up the money supply beyond the 20% of the past few weeks and commodity prices continue to fall... no inflation... gold price keeps falling... Fed drops interest rates again... still no inflation... drop rates more keeps printing... still commodities and gold fall... This is what happened before. It's a fallacy that they Fed did not make a supreme effort to increase the money supply and improve liquidity in the 1930s. As in the 1930s, this market drop has been caused a loss of confidence, a portent of recession or depression. As the system is a big confidence game, the system failed.

There was no mass media or Internet in the 1930s as there is today. Watch the whole thing happen again in fast forward. The good news: the system may recover more quickly, too.
-EJ

As if you ever miss much! A few other hammers to fall on the currency implosion...debt does not like to be erased.

Tom

http://www.comp.nus.edu.sg/~limweech/kitco.html repost of mirror page's URL. it might help reduce the load on kitco's server. it will only display up to a maximum of 2 time intervals or 30 messages. you can post from http://www.comp.nus.edu.sg/~limweech/k_post.html , the page will be cached by your browser, so you won't have to visit the page again.

From the E-Mail to the Editor - WorldNet Daily:Looking forward to Y2K

After reading the E-mail that you posted ( 9/29/98 ) , "How to Fix America," I am finally starting to look forward to Y2K hitting us. Hopefully, it'll hit as hard as Gary North and Ed Yourdon are thinking. Why, you are probably asking yourself? Simple: America as a whole has become so complacent, and so much like the sheep in Orwell's book Animal Farm, that they'll believe anything Sam Donaldson, Tom Brokaw and Cokie Roberts spew.

Those who are so stupid as to think "somebody" will fix the Y2K problem, and simply bury their heads in the sand, are the same people who mindlessly believe anything the main-stream ( liberal ) media tells them. To be blunt, they will not survive-they'll starve to death, or be killed by mobs, while waiting for Big Brother to come to the rescue...

Rest at http://www.worldnetdaily.com/e-mail/98.e-mail.html ( 6th message down )

Yes, USGL still trades. It is on the OTC BB since it was delisted from the Nasdaq. It closed today at 11/32. The symbol is still USGL and you can find quotes and other information about it at:

http://quote.yahoo.com/q?s=usgl&d=1ym

Machf15

A VERY apt metaphor for 97.7% of what we're watching! {:- ) )

One believes that the world economy is a machine and we are mechanics, or operators, or janitors, of the machine, depending on our station. Pull a lever here, turn a knob there... defined outputs from defined inputs... the machine made up of big and small gears, some highly leveraged generating big outputs from little inputs, others inconsequential... but orderly. Controlled.

The other believes the world economy is an ocean and we are sailing on a ship now through her turbulent waters. We may take down a sail and turn her into the gale, but ultimately our fate is due to the random events of wind and heat and currents. We do not control, we accomodate as best we can. In a storm, we try to survive.

Since I am a determinist, I believe we shall experience deflation. In fact, I believe we already have and if not for the incessant full throttle running of the diesel turbines in the engine room, we'd already be sideways to the wind, rolling hideoulsy.

-EJ

The Tice article quoted from Barron's is, I think, exactly on the mark so far as it goes. But, it does not go far enough to comprehend those factors you spoke to. Hardly any of them were even in the picture in 1930. What will be the effect of those factors, which are numerically huge, when the credit worthiness and borrowing willingness of the non-criminal element of the economy shrinks by orders of magnitude ?

Why so much cash in your portfolio? If you are banking so heavily on deflation and disaster, BEARX seems like a better option. It will provide real revenue while cash will only increase in value relative to the rate of deflation.

Mandatory random drug testing in the public schools? Federal rules. What happens when a 18 year old student in Alaska is found to have used Pot? Alaska constitution permits the use of Pot in thwe home if it's home grown, so how can they square this?

EJ The standard proceedure in a storm for a small boat is to drift, just nail down the hatch, wedge shut the door, and listen to the radio.

There is a big difference today. Let us not forget that there is a constant battle between commodities and equities. When the normal business cycle is not interrupted the pendulum swings from equities to commodities and vice versa.

What we have today is a totally artificial condition where the normal exit from equities to commodities has been blocked. The force holding the door shut is endless waves of cash being used to short any commodity which threatens to pull down the pants of the inflationists.

In 1929 the government was NOT allowed to simply print money without backing as happens today. Currency is an IOU. If there is a loss of confidence and the currency is backed by gold then even if other people will not accept your money you can always trade it in to the government in exchange for gold.

Deflation is only possible where there is fiscal restraint. Historically this has only been possible in a gold backed economy. What we have now is
credit being created by the boatload to hold back the indicators of inflation.

This same practice in banking is called kiting. To illustrate go to your local bank and borrow $5000. Take the money and go to another bank and borrow $10,000. As long as you can keep borrowing ( inflation ) you can maintain the illusion solvency. That is why deflation is impossible. We have started down the inflation path and there is no turning back.

Let's now add the factor of propaganda to the equation. The bankers have been brainwashed into thinking your credit is fantastic. They stand in line to loan you money. Does this make your creditworthiness any greater. I think not.

Eventually the ponzi scheme will come to an end. You can always argue that the collapsed value of the currency is inflation but it really is INFLATION NOW BROADLY KNOWN TO THE PUBLIC AT LARGE.

Remember-In the 30's the dollar was tied to gold. If the wussy politicans hadn't embarked on an inflationary path it would have taken longer and probably have been more painful, but we would still have a gold backed economy and no other currency could even come close to touching it.

Never forget the primary law of politics: Pain avoidance at any cost. There are only 2 economic systems. The IOU system and the faith system. The faith system always gets inflated and later trys to use it's cancer as a cure.

Deflation is a POLICY not an event. The rise or fall in prices may or may not indicate deflation. The true definition of deflation is reduced receipts in relation to valuable goods. It is not some airy fairy thing that happens for no reason. It happens because someone knowingly reduced the money supply.

And, deflation as a policy causes economic PAIN.

Inflation causes expansion. It is addictive and and once embarked upon cannot be changed. To do so would vaporize the shakey supports that are holding up the facade of stability.

It is my contention that much of the money supply, instead of staying out in the market place as investments in business and purchase of commodities, was instead plowed into treasuries because of the too high US real rate of interest compared to global rates.

Yen carry trade, gold carry trade, hedge fund leveraging, took liquidity out of the banking systems. The resulting scarcity of dollars created the deflation of prices.

As the US bond market unwinds, bond paper will be turned back into cash paper and we will reap the result of having sowed all that money supply.

Away for the night, to come again when Kitco is easier to get into.
Good night.