Gold Discussion for Investors and Market Analysts

Kitco Inc. does not exercise any editorial control over the content of this discussion group and therefore does not necessarily endorse any statements that are made or assert the truthfulness or reliability of the information provided.

(Tue Jan 12 1999 04:26 - ID#253418)
agree and disagree, ENVY, . . .
with your several points.

I think there's a cultural devide - those who finished school during the Vietnam War and the children to those now aging baby boomers. The young are looking deep beyond into the next century when the pace of change will occur faster than it has before and technology in the areas you mentioned will be in wider distribution.

The older generation are seeing things with the values of the early 20th century - our parents values, largely. They and we are becoming extinct as may be our investing style. I go back to what I said before -events unflold outside the model. The big inflationary boom of the 70's was a much a surprise to people as was the internet zoom and the Asian crash. Events don't replay the same model - hence strategies based on past valuations' relativities don't work nor does Gold necessarily go up any more when the dollar goes down or bombs drop.

It's a new world, before a new century, things have changed, people who missed the tech rally of the last three years did so because they didn't understand what was happening or know how to dream what would.
Valuation was a coverup for lack of understanding of the change at hand.
Gold miner and oil stock holders ( including myself ) are hoping the world will come back to them...I fear it will not in a form recognizable.

John Disney
(Tue Jan 12 1999 04:29 - ID#24135)
.. reading entrails .. everyone to their taste ..
To Gollum ..
Is it true that you find e-wave forecasting useless??
what method do you use ??? what are some of your
forecasts ..
For a forcast of rising silver againt gold made
November 13 .. with documention of forecasting
method try ...

(Tue Jan 12 1999 04:39 - ID#219363)
I see what you're saying and agree for the most part. As I've said before, I'm 30, one of those baby boomer's kids, and it should comfort you at least a little bit that I honestly believe that the Internet stocks are a joke. The world really hasn't changed, business hasn't changed either. I'm all about investing in the Internet but the problem with the Internet stocks is that they aren't. Think about it like this: Way back in the stone ages when the telephone system was first going into place across America, I'm sure that there was a lot of hype, and I'm positive that the first insurance agency on the telephone system probably went up on the stock exchange. The first insurance agency to have telephone systems was moving into a beautiful new market where anyone in the world was going to be able to get insurance over the phone, they were leveraging a powerful new technology that was going to change the face of the world forever, and they were right. Problem is, they still sold insurance. Amazon sells books. Ebay is an auction house. Yahoo is the Internet version of directory assistance. These are not technologies that deserve these outrageous valuations, it's simply a mania that will end. Business hasn't changed so much. You still need to have customers who are willing to pay you for something they can't get somewhere else cheaper. It's the same as it ever was, the same as it always will be. The world still needs gold, it still needs oil, and it still needs people who make hubcaps for automobiles. In the end, profit matters.

(Tue Jan 12 1999 04:46 - ID#372214)
I guess it's that deflation thing,interest rates rising and all that.

(Tue Jan 12 1999 05:13 - ID#253418)
To Envy and Disney
Good discussion, Envy. Sorry, I don't have any internet stocks to sell now that I am in possession of your logical viewpoint. But have a few "told you soes" well polished.

Mr. Disney, thanks for the reference to the URL from Down Under. Gentleman's wave theory seems well thought out and not too full of "if A then B unless C then D." His suggestion is that gold rallies to $325, ( overly optomistic ) silver to $6, ( has a pretty good chance ) PT to $380 the CRB to 204-212, then everything tanks to new deflationary lows behind a falling DOW.


Actaully, I'm of the view too that we are in a corrective rally in the CRB, silver etc. But when is a corrective wave not the first wave of a bull market - when D because of C not B by A???

(Tue Jan 12 1999 05:16 - ID#153110)
@CompuGeek @Irrationality
""The world economy is so strange these days that we are not even sure what to worry about," says David Wyss. And he, being the economist at
Standard & Poor's "U.S. Economic Service," is rather well informed."

Government intervention in markets causes distortions in supply, demand, and price. Translate these distortions to bond ratings, stock valuations, commodity prices, currency valuations, credit ratings, interest rates, and government budgets. How long can people have confidence in something they no longer can understand ? A long time. How long can people have confidence in something even the people who are supposed to understand, the experts, no longer understand ?

(Tue Jan 12 1999 05:18 - ID#39857)
bill gonna stomp on some nor careen face..oh yeh
US rejects North Korean demand

United States Defence Secretary William Cohen has rejected outright a North
Korean demand for 300-million dollars to allow inspection of a suspected nuclear

North Asia correspondent Peter McCutcheon reports, the stand-off is threatening to
escalate into another crisis on the divided Korean peninsula.

Addressing a US military parade at an air base near Tokyo, Mr Cohen said the
300-million dollars being demanded by North Korea for a one-off inspection of a
suspected nuclear site was a pretty expensive peak. But he said the US would still
be trying to keep its 1994 accord with North Korea intact. Under that accord the
communist republic agreed to halt its nuclear program in exchange for oil shipments
and the building of two light water reactors by the US and its allies. North Korea is
accusing the United States of breaking the accord by maintaining sanctions and
delaying the delivery of oil.

(Tue Jan 12 1999 05:36 - ID#173196)
The Mania etc.
I don't think the folks that started Yahoo/E-Bay/Amazon/etc, had any plans for their "companies" to make money. Just planned to trade paper for bucks. Just a simple con game. The little guy will be left with nothing, not even 5 cent tulips!

(Tue Jan 12 1999 05:48 - ID#219363)
Amen. Anyone could do it. Throw up a web site, call yourself, the future center for trading used auto parts in the world. Issue some stock, pay the couple of hundred thousand it costs to get your stock on the board, then make your rounds to all the equity talk shows saying what a great thing it is to be in the used automobile parts market, a so-and-so billion dollar market that will grow as third world countries need more and more used auto parts. Oh, btw, please excuse me if there really is a, I wouldn't want to offend anybody. I wonder who will be underwriting their issue.

(Tue Jan 12 1999 05:54 - ID#43349)
@John Disney
I wouldn't say I find Elliot wave analysis useless. In my experience it's usefulness depends upon the experience and sympatico of the analyst. Many subjective decisions must be made. Much of the end result has come from the intuition and "inner man" of the one reading the entrails, as you say.

Perhaps it is much like using the I Ching or any other sort of necromancy. Some people get spectacular results, some don't.

Myself, I am more of a Zenist, A Jungian Zenist if you will. I look at the various charts ( to see what everyone else is loooking at ) . I look at the fundamentals ( to see what economic forces to be wary of ) . I read the news ( to see what the world's curren state is ) . Then I go with what is.
In my trades I am more of a day trader than anything else. I put all my eggs in one basket, then I watch that basket very closely. I am not afraid to be wrong ( as I often am ) and get out quick when I am.

It works for me.

Predictions are dangerous. Unless one is pretty much of a Zenist one tends to have some ego attachment to a prediction. This makes one slow on the trigger when it counts.

For a prediction to be usefull one must be totaly aware of all the factors and what if's that went into making the prediciton. One must monitor them so as to be immediately aware of when "things aren't going right". If one is attached to "being right" in one's prediction then one will ignore things that don'r agree and over emphasize things that fit.

When taking a postion I always assume that I am wrong or at least not accurate. Sometimes life is good and I am wrong on the too conservative side. Sometimes life is bad and things go against me from the beginning.
Such is life.

I guess I find an approach loke cyclist takes to be the most rewarding for me. Go with the flow.

As for long term predicitons, I predict that by the middle of the year we will be able to look back and see that at this time we were in the market blowoff phase of a "crash" like in '29 or the Nikkei bear. Broadly based indexes like the Russel 2000 have been following the same pattern, the same kind of mania toward selected darlings is taking place, the same kind of slowing in the economy while money dabbles in financial instruements instead of production is going on, and other similarities too numerous to mention lead me to that conclusion. I am still looking for indications I am wrong.

In '29 we had a very sharp "first wall" followed by about a two quarter rally into the spring of '30 and a very deep "second wall" into the depths of the depression in '32/'33. In '98 the "first wall" was the decline from July into the depths of September/October and not nearly so dramatic as '29. Due no doubt by quick action by the Fed in arranging a bailout of LTCM, well timed intervention by Rubin, jawboning by Greenspan, and the lowering of rates. We have yet to see the "second wall", but it is very close.

This time there may be a third wave as well, but we'll have to wait and see how things go.

(Tue Jan 12 1999 06:00 - ID#253418)
URL for used car parts - ENVY

have ordered and saved significant money using this group.

(Tue Jan 12 1999 06:06 - ID#173196)
Yeh!, you got it. The underwriters, they love these "new" hot tulips. The big boys will play them for all there worth, unload to the suckers, by slowly sell into the peak ( out of paper and loaded on cash ) . Then the slope of hope starts! Same sh*t they've been doing for at least a 100 years. Gotta go an buy some more Gold! Also SNP short is getting close!

(Tue Jan 12 1999 06:21 - ID#26793)
Big name banks and investment houses take a hit in Chinese bankruptcy

(Tue Jan 12 1999 06:31 - ID#420116)
Have a blast. . . .

Use the 1 megaton bomb, it is representative off reality.
The 25 megaton is about equal to the largest devices ever
made, and not representative of current deliverable weapons.
Put in a zip code near your location of a likely target ( airport, military base,
defense factory, computer center, generating plant, communications hub,
government seat, highway interchange, etc., etc. )

(Tue Jan 12 1999 06:35 - ID#39857)
ALERT earth like humanoid host discovered in middle of Milky Way

(Tue Jan 12 1999 07:06 - ID#219363)
Any federal regulations prohibiting the acquisition of nuclear weapons by individual state governments ? I want Virginia to be the first, the blast radius on that 1 mega-ton weapon was impressive. Our national guard needs a couple of those puppies, you know, just in case. Looks like if DC were to get taken out, I'd live, unless the wind started blowing south, south-west.

(Tue Jan 12 1999 07:12 - ID#200274)
YEN off?
TOKYO ( AP ) -- In a wild day of trading, the dollar dipped, then soared against the yen today after Japan's central bank intervened in support of the dollar. Tokyo stocks closed slightly lower.

The dollar bought 112.50 yen in late afternoon trading, up 2.28 yen from late Monday in Tokyo and also well above its late New York level of 108.93 yen overnight.

The benchmark 225-issue Nikkei Stock Average drifted down 7.51 points, or 0.06 percent, to close at 13,360.97. On Monday, the average closed down 23.33 points, or 0.17 percent.

In currency dealings, the dollar sank as low as 108.65 yen in early trading but then rebounded sharply, rising as high as 112.85 yen after the Bank of Japan intervened.

It was the central bank's first intervention in support of the dollar since February of 1996, the evening edition of the Nihon Keizai business daily reported.

Japan and the United States had conducted joint intervention last June, but that was to weaken the dollar, Kyodo News agency said.

The move to intervene was triggered by growing anxiety over the yen's recent rally.

A stronger yen tends to make Japanese exports more expensive abroad and cuts into profits earned overseas. Lower earnings at exporters could hamper efforts to jump start Japan's recession plagued economy.

The Bank of Japan's action came after Finance Minister Kiichi Miyazawa expressed concern about the dollar's plunge to a 28-month low of 108.21 yen at one point overnight in New York trading.

``I am carefully watching moves in the yen in domestic and overseas markets,'' Miyazawa said.

That sparked speculation that intervention was imminent and immediately buoyed the dollar. The dollar continued to rise once the central bank's sell off of yen holdings became evident to market players, traders said.

Dow Jones Newswires quoted an unidentified Japanese financial source as saying the Bank of Japan spent the equivalent of less than $1 billion for the intervention.

The central bank does not comment on reports of intervention.

Meanwhile, Chief Cabinet Secretary Hiromu Nonaka, the government's top spokesman, hinted late today that more efforts to curb the yen's strength could be in the offing.

``Neither excessive yen strength nor yen weakness is good for the world economy,'' he told reporters.

In other currency trading, the euro was quoted at 127.83 yen in Tokyo, up slightly from 127.81 yen late Monday.

On the Tokyo Stock Exchange, share prices moved into positive territory midday, but then gave up those gains in late trading.

Some investors were sidelined by the uncertain direction of the dollar yen exchange rate, traders said.

``Everyone is watching the currency markets,'' said Kunihiro Hatae, general manager of the stock division at Tokyo Securities Co.

The broader Tokyo Stock Price Index of all issues listed on the first section lost 1.41 points, or 0.13 percent, to 1,055.93 points. The TOPIX closed down 1.06 points, or 0.10 percent, the day before.

About 361 million shares changed hands on the first section of the Tokyo Stock Exchange, up from 304.30 million shares on Monday. Declining issues outnumbered advancers 716 to 390, with 169 issues unchanged.

The yield on the benchmark No. 203 10-year Japanese government rose to 1.770 percent from 1.750 percent on Monday, pushing its price down to 100.24 yen from 100.40 yen.

AP-NY-01-12-99 0555EST

(Tue Jan 12 1999 07:38 - ID#424140)
Confirmation of the Phoenix
As expected, the BOJ apparently intervened to support the dollar.

BTP ( Before The Phoenix ) this would have been enough to drop the price of gold by seven or eight dollars in the overnight markets as short traders would have taken the opportunity to add to their short positions even as what few longs remained fled.

Indeed we saw the POG drop a little over a dollar last night, but the important thing is that is all that it did. Now we await the NY opening to see where we go from here. My suspicion is that shorts are not only not adding to their posiitions but are welcoming this as one more last minute opportunity to cover.

Once more, the world has turned.

John Disney
(Tue Jan 12 1999 08:00 - ID#24135)
Thank you ..
Gollum ..
But Ill stick to ewaves for trading
situations ..

(Tue Jan 12 1999 08:07 - ID#348286)
Expecting a little move coming today,,,,,,,

(Tue Jan 12 1999 08:09 - ID#424140)
@John Disney
And well you should, since that works for you. One should not depart from their nature. Be true to yourself.

(Tue Jan 12 1999 08:31 - ID#320136)
I've enjoyed and always looked forward to your all too
infrequent postings. But I'm writing now to offer you a
big "thank you!" for that excellent recommendation on
POM.V. Up almost 40% yesterday!! Wish I had purchased
more, but isn't that always the way, with hindsight?
Would you recommend adding more at these levels: $2.30?
At what point would you suggest to take profits? What is
your target price range for this stock?

Once again, kudos to you on your great call; any further
recommendations will be greatly appreciated!


John Disney
(Tue Jan 12 1999 08:31 - ID#24135)
foolish guys ..
to all ..
JP Morgan forecasts gold to average
$280 in 1999 .. thats pretty lousy .

(Tue Jan 12 1999 08:36 - ID#256365)
Silver Crash?
I almost hope so, I was a bit sad to see silver take off the way it did. I wanted to get more first. Perhaps there will again be a chance?

Mike Sheller
(Tue Jan 12 1999 08:45 - ID#348257)
John Disney
yes, but what would old J.P. HIMSELF have prognosticated?

My guess for average gold price in '99 is $347.20.

How about a Kitco Kontest on AVERAGE GOLD PRICE for '99?

Crystal Ball
(Tue Jan 12 1999 08:45 - ID#340392)
What's the news? All of a sudden, SPOOS going down the toilet?

Crystal Ball
(Tue Jan 12 1999 08:48 - ID#340392)
Stocks stand to open lower, but I see a bounce in the cards
Support for OEX ( 10 day moving average ) ~620

(Tue Jan 12 1999 08:50 - ID#317211)
Another bashing in Brazil.
Bovespa now off 415, breaking thru 6000 and still headin' south.

(Tue Jan 12 1999 08:52 - ID#256365)
is there a ticker symbol for this used parts co.?

Crystal Ball
(Tue Jan 12 1999 08:52 - ID#340392)
@ Mike Sheller
Good morning, Mike ! By the average gold price for 1999, are you speaking of the arithmetic mean, the median, or the mode ?

(Tue Jan 12 1999 08:54 - ID#257312)
Brazil Down 6% in Early Trading^BVSP&d=1d

Crystal Ball
(Tue Jan 12 1999 08:57 - ID#340392)
@ Mike Sheller
My guess is the arithmetic mean gold price for 1999 will be in the neighborhood of $335, the mean will be somewhat lower, maybe $310, and the mode, who cares?

(Tue Jan 12 1999 08:59 - ID#424140)
Silver crash? I don't think so. We'll soon know, though. The shorts will try to push the PM prices down this morning on follow through selling from the BOJ intervention overnight. I don't think they know what they are up against and will fail.

Might be a good opportunity for a little last minute shopping.

(Tue Jan 12 1999 09:02 - ID#348169)
"Man only likes to count his troubles, but he does not count his joys".
---------Fyodor Dostoyevsky

(Tue Jan 12 1999 09:10 - ID#224230)
@gollum @aldebaran
I agree with gollum. Silver has taken off and as a non-political proxy for gold, nobody has and interest in holding it down. Seems to be ratcheting up. Up when gold goes up on a daily basis, and holding ground when gold gets hammered down a bit.

Look at silver's spike this time a year ago, and anticipate a repeat. I'm betting on a spike to 7.0 by end February to fund my buying more gold options : )

(Tue Jan 12 1999 09:11 - ID#288186)
Mike; Dang! A contest for average 1999 gold price would have been great,
but you took my price! I'm out, unless, of course, we can have two
winners! What would really be nice is to have someone guess alot higher
than us for the average price and win! Then all us kitcoites win!!

(Tue Jan 12 1999 09:12 - ID#348169)
Here's another internet hot potato. WKWG ( With Klep WE Grok? - Mooney - figure that one out aurator/ cherokee/anyone and e-mail me! )
"Shares issued- 13.5 million
Float 3.5 million
Business-Internet Search Engine/Web Services for business
WKWG closed at $4.187 trading 2,131,300 shares, up 48% on the day.
There were 1,100 trades.
Last week WKWG closed their acquisition of WelcomeTo Search Engine Inc.
The company is developing a search engine to allow web users to narrow
their search rapidly.
They plan to implement the new engine in the 1'st quarter of 1999."
First of all who writes this stuff - Float 3.5 mill and yet 2.1 mill. trades in one day - yeah right.! Next - Can you dig it guys and dolls - the stock is an OTC, has not even implemented their system yet, and already the stock jumps 48% in ONE DAY and apparently already has a market valuation of 56.5 million dollars. Of course this could be
560 Million by the end of the month. Ho Hum. Hmmmmmmmm.
Ommmmmmmmmmmm. Zzzzzzzzzzz

Spud Master
(Tue Jan 12 1999 09:24 - ID#273112)
Flood of counterfit new US $100 bills???
I had a large area store REFUSE the new US $100 bills last evening - he claims that their are too many counterfits in the area - that the "new" $100 bills are even easier to counterfit than the old ones.

Anyone have any take on this? I heard the rumors before, but this was a martini glass of ice water in my face.

Spud: gold and silver atoms. don't shop without them.

Got Gold?

(Tue Jan 12 1999 09:24 - ID#224230)
Some Esoteric Astrology for y'all
Here's a little esoteric astrology P.O.V. - offered with due deference to Mike Sheller, Kitco's real astrology expert, : )

This one's from

"If we add up the number 1998 we get #9. Numerologically, #9 equals endings. If we add up the numbers 1999 we end up with the #1, which means beginnings. Therefore, it may be more relevant to consider this new year of 1999 to be the beginning of our new life cycle and incorporate, from this point on, what it is we need and want for the next twenty-five to fifty years. It was auspicious that our New Year began with the Full Sun/Moon in Cancer/Capricorn. Both of these signs signify gates in which Spirit enters matter and matter is able to merge once again with Spirit. I think that in this year we will be deeply involved in these issues of what is of "matter" and what is of "Spirit" within us. Also, since we're in the month when the Sun transmits the energies of Capricorn, we are also being influenced by three very potent Rays from the Big Dipper. Ray 1 of Power and Force which destroys what is no longer useful ( relationship, work, home, family, etc. ) ; Ray 7, matter and the mineral kingdom which receives the power of Ray 1; and Ray 3, the Divine Mind principle. In other words, 1999 will experience great changes in all areas of life."

With regards our hopes for gold, the comments about the mineral kingdom bode well.

John Disney
(Tue Jan 12 1999 09:25 - ID#24135)
For Mike Sheller ..
I admire your exactitude ...

(Tue Jan 12 1999 09:28 - ID#317211)
Another bashing in Brazil.
Bovespa now off 415, breaking thru 6000 and still headin' south.

(Tue Jan 12 1999 09:40 - ID#333127)
as xpected
Dollar up gold down.

(Tue Jan 12 1999 09:41 - ID#288186)
Well, like Gollum said would happenin'. Gold is being pressured/sold
down. Feb Gold is at 290.10 ( It's low this morn is 289.60 ) . How low
will it go before a rebound? I hope it stays above 288.90 from an
E-Wave perspective...

(Tue Jan 12 1999 09:57 - ID#348169)
Mike S., Foxman, Crystal Ball and ALL - Guessing games are fun. Many here have commented on the fact that MOST predictions of six month to one year future Gold prices ( around here ) have been wrong Most of the time in the last two years. Indeedy. ( I guess I can start saying that now as I live in Hollywood North and RJ has relinquished all his priorities. ) My conservative scenario guess is that the arithmetic mean gold price for 1999 will be in the neighborhood of $325, the mean will be around $320, the high will be $378.90 and the low is $276-282.
Don't even ask me my WILD prediction ( if things go haywire in the economy ) because I will sitting in the second row of cherokee's flying smoke machine listening to cool tunes from the 60's and 70's and discussing the role that various species of Southwestern catus plants have played in the building of Western Civilisation.

Mike Stewart
(Tue Jan 12 1999 10:01 - ID#270253)
Technical Update
The Toronto Mining Index McClellan Summation Index continues to rise and with good conviction. The breadth of the mining issues is very good at this point.

The New Lows on Toronto Mining Issues have dried up to a level hitting our benchmark 5 or fewer issues per day for the past seven trading days. Once year end tax selling was over, the selling pressure vanished. This is good and was expected. Now that we are having our first gold correction of the year, it will be very interesting to see how the new lows hold up. I expect that they will do just fine.

The 220 Day MA for gold is at 294.23 and going sideways. This is the last holdout from a technical perspective. We must break it to the upside. Not yet.

The 220 Day MA of the Toronto Gold Index ( ^TGL on Yahoo ) did break the trend last week. This measure is at 6303 and is going sideways. It may not hold this correction...wait and see.

The trendline that rises 2% weekly from the last major low in the Toronto Gold Index did hold!! The trendline provided support and the index went sideways for two weeks. We then adjust the trendline from this new intermediate bottom. Last week it was 5935 and this week ( up 2% ) it is at 6054. This should hold the correction.

The point and figure chart for the XAU using boxes at 1 point per box, reached an exhaustion point yesterday. In a bullish mode, the largest upmove that is normal before consolidation is 12 to 14 boxes upward. We hit 12 yesterday. The correction should not exceed 69 on the XAU and ideally will be very quick.

I bought some Drooy yesterday at 2 25/32 to become fully invested in golds. If 6054 breaks on a weekly basis, I will lighten up quickly.

(Tue Jan 12 1999 10:04 - ID#256365)
The dollar is not up, the Yen is down.
Yen down about 3% against non-english currencies, and about 2.7% against english speaking currencies. Strange, I didn't know THAT was how we were going to pick teams.

Spud Master
(Tue Jan 12 1999 10:11 - ID#273112)
@Envy - kettle calling pot black, yes?
you wrote ( re. Ebay ) :

"This one is the one that makes me laugh. Here we have an online trading system [Ebay] that is trying to position itself as a clearing house between folks on the Internet who want to auction things. "

And what, pray tell is the NYSE? eh? or NASDAQ? or AMEX? or COMEX?

I can't tell the difference.

Spud, shining his UV lamp on each $100 bill, one by one ....

(Tue Jan 12 1999 10:15 - ID#348129)
@Mike Sheller - Good Idea - Average AU Price and Closing Price Contest for 99 (not Y2K ready yet)
Average 99 AU Price: 370.50
Closing 99 Price: 410.50

(Tue Jan 12 1999 10:19 - ID#348129)
@More Manipulation
Must have been some comment somewhere to drive the price down this morning. DOES ANYONE have the new B-S that has pressured the price ???????

(Tue Jan 12 1999 10:20 - ID#343259)
@Envy @Jims @Mozel
Jims, Envy. Great Discussion. Also, Mozel. I'd like to offer a few thoughts. Mozel is speaking to manipulation. How the rule book gets thrown out. It's as if you have a magnetic compass, and someone has a magnet under it that they can move as they wish, giving a false reading. You don't know what to believe. But you do believe that it is being manipulated. That is a start, it seems to me. If I were at sea, and the compass were fouled, I would look to other signs for navigation.

Envy, correctly states that Internet stocks that align themselves too closely with the internet-per-se without some added value other than that, are likely to be crushed under in the competition and low barrier to entry. Jims appears concerned that his value structure, rooted in "commonsense" physical commodities is in danger of collapse.

My belief is this. I believe that the economies are manipulated. I have what I consider to be good reasons to hold this belief. Therefore, in my domain, "The compass is fouled".

"The Future" as characterized by the purveyors of the "Internet Darlings", is merely riding the grand wave of "Ephemeralization" ( as Buckminister Fuller coined it ) . Fuller correctly points out that we are, as a world people, moving away from "physical-material" and toward "mental-spiritual", doing "more-with-less", and in general "lightening up". However, with this ephemeralization, this representation-of-the-physical-with-a-concept, comes a danger. That is manipulation.

Since it is my belief that man is as-not-yet-perfect, then greed and manipulation will play a part. Since it is difficult to manipulate the amount of gold on the planet, I believe that using gold as a yardstick to keep the ephemeralization in check makes good sense. Not in the way I think Jims is framing the argument, loosely paraphrased as "either it comes back to our parents values or will be the future's values", but as an anchor in physicality, non-manipulated to which you can safely attach your kite, and soar into the future.

As I see it the kite has been flown, with great success, and to fly it higher, it's anchor has been removed, having run out of string. It continues to fly higher, but we no longer can see it, reach it, or enjoy it without an anchor. Gold is the anchor.

[Sermon mode on] In truth, I have to admit that I wish God were the anchor. Hmmm. If we take the "L" out of Gold, we'd have God. [mode off]

(Tue Jan 12 1999 10:34 - ID#408236)
@ MoReGold: The dump in the POG today was all out of Asia. So,
IMHO, this is all related to the spike in the USD relative to the yen,
which fell because the Japanese Gov't bought $USbillion by selling yen.
They may still be selling yen. It is called competitive devaluation,
and is what paper currencies are all about.

Remember GATT, and the focus on eliminating tariff and non-tariff
barriers to trade? Gatt has lowered tariff barriers from 40%
to under 5% amongst signees, but if a country informally or formally
devalues their paper currency by 40%, we get back a barrier to trade
that is just as effective as tariffs. I think we just saw an informal
devaluation by the Japanese, in order to make their exports to the US
cheaper, by about 3%.

So the old gold-yen relationship is back. If yen goes down, gold
goes down. If yen goes up, gold doesn't go up. This doesn't make
sense, but it is what is happening. I think this is called MANIPULATION.

(Tue Jan 12 1999 10:36 - ID#286230)
I wonder
if gold was going up like an internet stock would we be thinking it was about to crash and start another depression or would we think the world was finally running right?

(Tue Jan 12 1999 10:48 - ID#254130)
Investors await fate
WOUNDS TO NURSE: In another calculation of
the pain many stock pickers and stockholders felt
in 1998, Jeffrey Warantz of Salomon Smith Barney
says while the S&P 500 rose 26.7%, nearly
three-fourths of U.S. stocks failed to rise even 8%.
Two-thirds were losers for the year. In records
dating to 1971, there have never been so many

(Tue Jan 12 1999 10:52 - ID#343259)
Spud Master re ebay vs NYSE
Spud Master. I won't wait for Envy to answer. There is an enormous difference between the two. NYSE, NASDAQ, etc are charged with an immense amount of public trust, listing shares of companies that can and have been manipulated in the past by savvy insider management, who, unregulated, would easily con investment money from those who do not spend their life in managing that business. The degree of public exposure and the type of financial instrument/commodity are the dimensions that differentiates the spectrum. On a lower scale, are outfits like "Home shopping network", which use a market vehicle to sell wares to the public from a variety of manufacturers, at reduced cost. They use a broadcast medium to trade, and use telephone as the return communication for the buyer, in real time. They have much less public trust than the NYSE, but still a fairly large degree as compared to e-bay. With e-bay, you have a blend of interactive home-shopping-network with an "automated-want-ad". Again, there are public trust issues. You will see warnings by newspapers of the nature, "Please bring to our attention any scam artist". But to the great degree, the people listing are not professionals, and are just ordinary folks trying to buy and sell items. Much much less public trust issue.

(Tue Jan 12 1999 10:53 - ID#187109)
*average POG*
conservative estimate.....

for first half of year:


second half:


Topping out:



first half of year:







both should do well for my TVX holdings.......... ( cha-ching ) ........

gonna buy some drooy on a pullback............... ( more cha-ching ) ...



spuddO's - Disney announced some sort of online thingy they are coming up with........sheesh.....all they had to do was announce anything to do with the NET and POW!.....I am FINALLY in the black. Now, ya gotta axe yerself............"hey spudman, should you be buying a little Disney now or what"............and ya gotta be thinking to yerself................ ( hmmmmmmmmmmmmmm ) .......

(Tue Jan 12 1999 10:54 - ID#424140)
Sun coming out
Looks like the morning squall may be about over. Some pretty good size blocks moving back into NEM.

(Tue Jan 12 1999 11:17 - ID#257313)
Japan sell yen, buy Dollars to buy GOLD! is everyone so daft?
In a recent posting someone quoted that Japan only had 3% of reserves in gold. if this is true wouldn't it make more sense for BOJ to sell Yen to buy dollars and in return buy gold. BOJ would solve two problems; Yen would depreciate and there gold reserves would appreciate.In fact a systematic selling of Yen for Dollars and purchase of gold would help all current account balances world wide.

(Tue Jan 12 1999 11:23 - ID#50149)
Maybe it's time to start thinking about an 'Internet Sector' implosion and the collateral damage that would do to the 'economy'. Anybody look at the help wanted ads for 'high tech' people? I don't think we make hardware of any kind anymore in this country. The manufacturing sector continues to shrink, but the job market is expanding? The U.S. Government was the biggest hirer in the last job report, followed by retailing I believe.

The high tech jobs are all software oriented. How many ways can you redesign a web site, or how many 'new' languages can you come up with ( or need ) ? Right now 'e-tailing' was the big thing, until someone wanted to return something that they 'e-tailed'. Just food for thought.

(Tue Jan 12 1999 11:25 - ID#391195)
Premium on 90% US Silver
Am sure most have kept up with this, but just in case you haven't, 90% US silver coins are now trading at a VERY HIGH premium over melt value. It would be wise to take advantage of this to add ounces to your horde. Sell your 90% to me and buy .999 or one of the other options ( US 40% for instance ) and you make money on the 90% and increase your silver holdings. This is a way for you to take advantage of the crazy premium on 90% right now. You can bet it won't last !!!! Email me at if you have US 90%.

(Tue Jan 12 1999 11:27 - ID#210282)
Another new 'Arkanicide' -- an Alltel VIP
All: Joe Farah points out that this gunshot 'suicide' apparently took several shots from a hand gun before connecting. Not typical for a suicide -- hard to miss at that close range. Farah goes on to mention that this might be connected to the sensational 'Clipper' chip, which Vince Foster, and Webster Hubbell knew about. Anyone who knows something about a method of accessing all confidential financial data passing through the chip, the relevant software, and who had the chips/software might have a short life.

Could be that Webster Hubbell needed some more reinforcement not to change his testimony. I don't think I would want to be in his shoes.

If you play with the sharks, you can get eaten.

All: Looks like we are having our first dip in our little gold rally. Will be interesting to see if the bulls or bears win the tug of war by the end of the day. Brazil is looking bad today -- if the Brazil financial 'containment' fails, we could have real trouble ahead.

Strad Master
(Tue Jan 12 1999 11:32 - ID#250297)
South American Stock Markets
ALL: I see that Brazil is down 7.16% ( following yesterday's big drop ) , Mexico is down 2 1/2%, and Venezuela is down 3.6%. Used to be that the US markets were affected by such big drops. What gives? ( other than the price for internet tulips. ) I don't know enough about such things, but it would seem to me that the foundations of the global markets are getting severely tested, and that Brazil in particular can't continue this way for much longer.

BTW, I didn't have a chance to inform any Kitcoites in the Santa Cruz, California area that I played a concert with the Santa Cruz Symphony on Saturday night. Sorry. Despair not, though, if you can pick up the NPR sation KUSP - FM ( 88.9 Santa Cruz ) they are broadcasting the concert this coming Sunday at 10 AM. Listen in.

Spud Master
(Tue Jan 12 1999 11:37 - ID#273112)
@EB ... Disney
yep ... mar-vel-ous is it not, my dear EB. 37 3/4 last I checked.

But then, this was, as you point out, serendepitous.

Oh well, profits are profit, are they not Eric?

perhaps I ... should ...


; ) Spuds, your dear friend

(Tue Jan 12 1999 11:38 - ID#391195)
Premium on 90% US Silver Coins, cont.
In part this big increase in the premium for US 90% silver is caused by the "gloom and doom" Y2Kers. A guy close to me is involved in giving seminars, etc. concerning the effects of Y2K. Part of what they advise people to do to get ready for Y2K is to buy small denomination silver coins. They then sell the coins at the end of the seminar to those who wish to buy them. This guy cannot keep enough silver and is paying big bucks. I am one of his suppliers, so I can pay good prices for this stuff. Do the math and see how you can add to your horde now by converting. My email address is in a previous message.

(Tue Jan 12 1999 11:38 - ID#399147)
Strad Master
Good to see you here, don't often get to as our time difference is so much. Can't get NPR over here so will not hear you. Let me know when you will be in country over here.

Cage Rattler
(Tue Jan 12 1999 11:42 - ID#33184)
ESCB net foreign reserves - gold is 14.53% of total assets
Assets Balance ( bln eur ) at Jan 8~#Diff to last wk
Total assets 685.128 -12.032
Gold + gold receivables 99.598 0
Claims on non-euro area residents
in foreign currency 234.128 +3.787
Claims on euro-area residents
in foreign currency 5.255 -1.449
~ ( Claims on non-euro area residents
in euros 8.786 -0.153
Lending to financial sector
counterparties of euro area 174.769 -10.351
Securities of euro area residents
in euros 20.914 -0.736
Government debt in euros 60.125 0
Other assets 81.554 -3.129

Total liabilities 685.128 -12.032
Banknotes in circulation 336.551 -5.157
Liabilities to euro area financial
sector counterparties in euros 106.002 +18.694
Debt certificates issued 11.651 -2.184
Liabilities to other euro area
residents in euros 32.203 -29.274
Liabilities to other non-euro area
residents in euros 11.538 +1.569
Liabilities to euro area residents
in foreign currency 1.051 +0.456
Liabilities to non-euro area residents
in foreign currency 3.929 +0.615
Counterpart of special IMF drawing
rights 5.765 0
Other liabilities 63.950 +3.260
Revaluation accounts 59.681 -0.250
~?ital and reserve 52.807 +0.240

(Tue Jan 12 1999 11:47 - ID#257313)
gold down $4.00 I suppose CB's don't want gold controlling there future.
How long will the the scam continue?

Spud Master
(Tue Jan 12 1999 11:50 - ID#273112)
@CompGeek ... HA HA HAA HAA HA HA HAH HA...
Highly risable, yourlast post. Let's see:

you wrote:

"You will see warnings by newspapers of the nature, "Please bring to our attention any scam artist". But to the great degree, the people listing are not professionals, and are just ordinary folks trying to buy and sell items. Much much less public trust issue. "

Old bean, the scamming, conning and manipulation have been going on in those big, old exchanges for a long time. I don't suppose you followed any of the NASDAQ stock scandals in the last few days, eh? Trust? Oh yea, all you want.

Ebay et al are just the latest new comers; doing the SOS as NYSE, AMEX and NASDAQ.

Ebay can just as likely be used to trade stock certificates as the NYSE. Want to see NASDAQ go to red alert?

Do you work for the NYSE? Is that it? Trying to snuff out a potential competitor - like the Fed is trying to do to the Euro?

Competition is a hard row to weed. Much easier to just diss it.

NYSE: Middle-man. Ebay: Middle-man.

I see no difference at all. Period.

Spud, tired of "professional" BS.

pithy quote: "Professionals are amateurs in business suits"

(Tue Jan 12 1999 11:59 - ID#320202)
love your " word-smithery "

(Tue Jan 12 1999 12:03 - ID#269409)
@ Strad Master...shame on u!
You're under arrest! You came to Santa Cruz to play and said nowt about it in advance? Santa Cruz in my home town..and the wife loves symphony!

How'd you like the warm days, cold nights, and the seafood?

I woulda showed up had I known.....and met you. You could have reported back to Kitco...that LGB is an easygoing social creature in real life..not the beast perceived in cyberspace.......

Oh well, let us know next time yes?

(Tue Jan 12 1999 12:37 - ID#256365)
I'm gonna go out on a limb here, REALISTIC you may want to keep this
Gold will break $300 late Friday. This Friday Be there, BE THERE, Cage Match, No holds Barred. Also a premier attraction will be the SUPER Argentia Monster Truck will crush a bunch of things. Don't you DARE miss it!
Maybe I should get some sleep now, else I might become delusional.

(Tue Jan 12 1999 12:46 - ID#45173)
Starting to look a lot like July 1998
All world markets down for the past few days, except those with gov't buying programs, and even some of them.

Wind picking up?


(Tue Jan 12 1999 12:46 - ID#347167)
70.5 was low enough, you can turn around now...

Cage Rattler
(Tue Jan 12 1999 13:04 - ID#33184)
Brazilian Bovespa Index is down 8.9%
If it reaches 10%, trading will be halted.

(Tue Jan 12 1999 13:29 - ID#343259)
Spud Master ebay/NYSE
You say "Old bean, the scamming, conning and manipulation have been going on in those big, old exchanges for a long time. I don't suppose you followed any of the NASDAQ stock scandals in the last few days, eh? Trust? Oh yea, all you want"

I will grant that the institution does not necessarily live up to the trust granted it, but nonetheless, it is regulated.

"Ebay et al are just the latest new comers; doing the SOS as NYSE, AMEX and NASDAQ."

I think not. If I wanted to sell the shares of my small software company on ebay, I don't think it would be allowed. Please correct me if I'm wrong. Also, if I wanted to sell my 1974 Martin D-18 Guitar, I don't think I could list it on NYSE.

"Ebay can just as likely be used to trade stock certificates as the NYSE. Want to see NASDAQ go to red alert?"

I'm not sure it can. If so, can I sell my stock there? What do you mean by "NASDAQ go to red alert"?

"Do you work for the NYSE? Is that it? Trying to snuff out a potential competitor - like the Fed is trying to do to the Euro?"

Gosh no. Far from it.

(Tue Jan 12 1999 13:39 - ID#424140)
Hey! How ya been? Yes, it is starting to get windy. Just take your old July to October charts and rescale them to fit where we are now and you can save all the effort of replotting them.

Cage Rattler
(Tue Jan 12 1999 13:40 - ID#33184)
Brazilian Bovespa Index is down 9.55%
Approaching 10% down ...

Cage Rattler
(Tue Jan 12 1999 13:42 - ID#33184)
US wants to see internal workings of IMF, or our money back ...
WASHINGTON ( AFX ) - Senator Phil Gramm, the new chairman of the Senate Banking Committee, said he will seek public testimony from top IMF officials as part of a major examination by the committee into the internal operations of the IMF.

"We will hold a major set of oversight hearings on IMF. We will ask the IMF to appear before the committee and explain to us what they have done in implementing our policies." Gramm said.

When Congress approved the IMF funding last year, it included several measures to improve the transparency of the IMF.

"We intend to see those changes made or we intend to take our money back," Gramm said.

A Congressional staff member said IMF officials have always declined to provide public testimony to Congress. Although IMF officials have briefed members of Congress behind closed doors, the agency has argued that public testimony would bring it into the oversight of 185 legislatures of all 182 of its member states, the aide said.

But at a press conference to announce the agenda of his committee this year, Gramm said he was confident IMF officials will appear before his panel.

"I hope they will. I believe they will," Gramm said.

(Tue Jan 12 1999 13:42 - ID#210282)
Gold 'dumping' just before impeachment trial begins
All: Which is more important? The bullish effect of WJC's pending trial with witnesses beginning on Thursday? The bullish effect of an EC crisis where all 20 members of the Commission might be fired due to corruption? Or -- the bearish effect of Brazil or ? going down the drain?

So far, with US interest rates looking fairly stable ( 30 year rates went down ) , I would guess that the world financial situation not bad enough to justify gold 'dumping'. Not yet, anyway.

Perhaps the dust will clear by tomorrow. Could be that some big players are pushing down the gold market so that they can step in and buy something precious before the impeachment trial actually starts. Of course, it could also be that the real problem is the EURO -- and the European CB's have 'sold' more gold to keep the EURO strong. It would not take much, given that the EURO market is still very thin.

Any big block trades in precious today? Any evidence for a 'big trader' getting a long position in gold?

Comments, anyone?

Cage Rattler
(Tue Jan 12 1999 13:45 - ID#33184)
Brazil's Carduso denies rumours of real devaluation
First the 'official' denial ...

Who Cares?
(Tue Jan 12 1999 13:50 - ID#242214)
EBAY-L out now!
Ebay Good! Spudmaster Bad!
Amazon Good! Spudmaster Bad!
Yahoo berry, berry good! Spudmaster Bad!

Where else but in the stock market could a bookstore, in the red,
be worth $200 / share?

South Seas good! Spudmaster Bad!
Mississippi GOOD! Spudmaster Bad!

Spud Master
(Tue Jan 12 1999 13:51 - ID#273112)
Capital! Let's have a discussion:

I assert that, if I hold physical stock certificates, NOTHING prohibits me from offering them for sale on Ebay.

The high bidder wins, I sign the certs on the back and mail them to him/her.

Viola! No need for the bleeding stock broker parasite middle-men. Just the Ebay mosquito-bite fee.

Any problem?

Spud, who ... ah ... designs and writes in Ada, a *real* language.

pithless comment: C, C++, Java ... the evolutionary crawl from informational slime on its way to Ada97.

(Tue Jan 12 1999 13:55 - ID#335190)
Full Employment and Balanced Growth Act of 1978 @ "It has had its day," Sen. Phil Gramm
January 12, 1999

Humphrey-Hawkins hearings could end this year

WASHINGTON ( Reuters ) - Humphrey-Hawkins hearings, at which Federal Reserve Chairman Alan Greenspan testifies to Congress on the state of the economy, could end this July, the new chairman of the Senate Banking Committee said Tuesday.

The twice-a-year hearings to banking committees in both the House and the Senate are a key event in the financial calendar at which the world's most powerful central banker gives a detailed view on the economy and monetary policy.

"This could be the last one that we have," Sen. Phil Gramm told a news conference at which he outlined his agenda for 1999.

"It has had its day," he added, noting however that the hearings, known officially as the Full Employment and Balanced Growth Act of 1978, may survive should members of the committee decide otherwise when he consults them.

The hearings, established to give more oversight of the central bank, are to be scrapped by the end of this year under a law passed in December 1995.

The Federal Reports Elimination and Sunset Act set a four-year target for a series of government reports to be phased out. "We have come to the end of the process," Gramm said.

The Federal Reserve said the expiration of the authorization for the Humphrey-Hawkins hearings would necessitate talks between Congress and the central bank.

"Obviously there will need to be discussions about the act in which we will participate," a Fed spokeswoman said. "In the meantime, Chairman Greenspan is preparing for February's report."

The hearings are usually held in February and July but Gramm said a date for next month's testimony had not been set yet.

Who Cares?
(Tue Jan 12 1999 13:56 - ID#242214)
EBay GOOD! SpudMaster BAD! Take II
CompGeek sez "nonetheless, [the market] is regulated"

Yeah. By the same guys rigging it. : )

(Tue Jan 12 1999 13:58 - ID#20359)
Cage Rattler, Namaste' gulp and a puff...DOY! amazes me that after countless billions
of dollars going to the IMF that they NOW decide to ask the tough questions...amazing...simply amazing...

Spud Master
(Tue Jan 12 1999 13:59 - ID#273112)
@CompGeek - "Stock Exchanges? We don't need no stink'n stock exchanges..."
CompGeek - Tangent to our palaver re. Ebay tulips - one company already bypasses the whole mess, Real Goods:

Real Goods has recently received approval from the SEC ( Securities and Exchange Commission ) to be the very first company to launch our own trading marketplace both on and off the Internet.

We have been deluged with media and have had recent articles in the Wall Street Journal, Bloomberg News Service, the San Francisco Chronicle, the San Francisco Examiner, the San Jose Mercury News, and the Santa Rosa Press Democrat.

In 1991 Real Goods pioneered the concept of Direct Public Offerings with our successful placement of $1 million of stock and again in 1993 with our successful placement of $3.6 million of stock. Our stock is currently traded on the Pacific Stock Exchange under the symbol "RGT" and on the Nasdaq under the symbol "RGTC"

Spud, waiting for the PPT to pull the Dow back in the last 30 minutes...

(Tue Jan 12 1999 14:01 - ID#424140)
Should start getting a little bounce about now...

(Tue Jan 12 1999 14:02 - ID#424140)
Oh, and while you are shifting and rescaling, you might like to fiddle around with these:

(Tue Jan 12 1999 14:05 - ID#280215)
Silver Retrace??
This chart and study has been brought up in the past, I thought I would show it now, but with a different result. Weeks ago, Silver stochastics were shown in a bottoming formation. Today, it is now in a topping formation. If you look at the price chart and draw a line connecting the tops, silver has definitely broken out of that resistance line. However, a major resistance ( 550ish ) has not been taken out YET. The attached chart does NOT reflect todays down action. The lines will probably begin to cross downward now. It looks like a downturn ( pullback ) might be in order. But that's OK!

Again, if you connect the resistance lines, we have broken out. Normally after the breakout of the line, a retrace occurs to go back and touch that line, but this time from the top. The line would now be a support line instead of a resistance line. That line would extrapolate to about the 480ish area. Looking at the chart, that would form a nice head and shoulders bottom. This seems to be a popular item on Kitco so I thought I would point it out. With the stochastics as the are, I think the pullback is inevitable. But as some have said, this would be the buy of a lifetime. Thats what I also think anyway. Heres the chart:

(Tue Jan 12 1999 14:06 - ID#410165)
Just sent a new web page into cyberspace....not for those on the left...truth scares you

Who Cares?
(Tue Jan 12 1999 14:07 - ID#242214)
Netscape Good! SpudMaster Bad! Take III
Spudmaster sez "Java Bad. Ada Good".

Pre-IPO internet company worker who doesn't care sez -

"Delphi Good! Ada Bad!"

You're busting me up, today, guys.

I assert that, if I hold physical memory addresses, NOTHING prohibits me from accessing them for writing on Ebay.

My company is trying to IPO this year. I don't think we'll make
the wave, though. Remember, it isn't a bubble until it pops.

(Tue Jan 12 1999 14:11 - ID#210282)
Just a thought about Brazil
All: How about this? Could the IMF be selling gold to prop up the 'Real' or whatever the Brazilian currency is called? I don't have access to Brazilian exchange rates.

Why is it that I fell like a deer in the crosshairs? Just yesterday I was thinking my gold equities would give me a 20% gain in two weeks. At least I have some funny money in Mexican index puts, but as hindsight would have it, I need alot more than I have.

Does anyone know what Intel's earning report will be this PM? Could that be the key bad news? I'm thinking more and more that the real item is a Brazilian devaluation. Come to think of it, this happened in 1994 or 1995 to Mexico, and the US dollar went down not up -- I was amazed how much of an effect the Mexican crisis had on the US dollar. Could be that AG is 'dumping' gold in advance of the anticipated drop in the dollar tomorrow when the Brazilian devaluation comes out.

This ol' Tsunami gold bug surfer is beginning to get worried about being on the wrong side of the wave. At least I still have some dry powder, but right now I don't want to touch it.

(Tue Jan 12 1999 14:11 - ID#256365)
Can I ask this?
Has anyone delt with Affordable Jewelry & Precious Metals? good? bad?

my email address is please reply there TIA

(Tue Jan 12 1999 14:14 - ID#335190)
IMF (Taxpayer Representatives ask the tough questions) @ What about the Federal Reserve ?

Rep. McFadden continued, "Every effort has been made by the Federal Reserve Board to conceal its power but the truth is the Federal Reserve Board has USURPED THE GOVERNMENT OF THE UNITED STATES.


No man and no body of men is more entrenched in power than the arrogant credit monopoly which operates the Federal Reserve Board and the Federal Reserve banks.

These evil-doers have robbed this country of more than enough money to pay the national debt.

What the Government has permitted the Federal Reserve Board to steal from the people should now be restored to the people."

In 1992, Illinois Congressman Crane introduced a bill, co-sponsored by 40 other Congressman, to audit the FED.

This is a step in the right direction.

(Tue Jan 12 1999 14:16 - ID#280215)
silver chart
Sorry about that. For the silver chart that I hoped to display, type in SIH99 in the contract area, and select the Daily period. Then click on Get Chart. Sorry about that. I thought the chart itself would display.

(Tue Jan 12 1999 14:21 - ID#210282)
XAU bottoming -- don't know about general equities
Gollum: I agree -- it looks like it is bottoming. Any idea what happened? IMF gold sales to boost Brazilian Real? Preparation for US dollar drop as AG tires to stabilize Brazil? Gold bulls trashing the precious market before WJC trial begins? Worldwide financial crisis?

The scenario I favor is AG 'dumping' gold in preparation for Brazil selling a boatlead of US treasuries in the next few days. Can't let the US dollar drop too far, can we? And -- we must keep Brazil afloat. Just think of all those Fortune 500 companies that are up to their eyeballs in Brazilian/South American investments.

(Tue Jan 12 1999 14:22 - ID#194311)
Gold's on the skids
Al G's in Hong Kong....Asian's buying dollar's now, not gold
Must have been a sweetner tossed in with the US paper debt salad

Real problem's in Brazil desperately being talked around.

Gold heading for 282 by week's end....time for some physical action.

Who Cares?
(Tue Jan 12 1999 14:30 - ID#242214)
RealGoods Disclosure
Realgoods, my silver eagle. Heck, we should all join the party.
I have pre-IPO shares, too.

We recently sold a large chunk of of the shares to a

"full-service global investment banking and securities firm"

If we find a way to stick ".com" in the disclosure, it should be good for at least $100 / share! : )

Heck, at least I'm on the winning side for once. Go, Clinton!
Go, Greenspan! Print more money!

Spud Master
(Tue Jan 12 1999 14:32 - ID#273112)
( Spud, banging his shoe on the podium ) : "We will bury you!"

( grin ) enjoyed yer comment WC. Delphi is, at least, a bleed'n step upfrom VisualCarsic.

Now ( ahem ) let us all relax and just buy the Dow 30 stocks.

The Dow will never, ever be allowed to go down. Watch the last thirty minutes today: same as it ever was, same as it ever was. Up.

We all know in our gut the WHOLE ROTTEN MESS is now totally manipulated by the unholy trinity of Greenspin, Ruberick and Klintoon.

The Stock Market will go down, to quote Harmonica ( "Once Upon a Time in the West" ) : "...only at the point of dying..."

When gold rises trimuphant, the rotting facade of Western Civilization will bleed-out a torrent of chaos.

Spud, the ever-cheerful & chipper = )

(Tue Jan 12 1999 14:38 - ID#194311)
Russia's $150 billion debt....US's $5.6 trillion
and here's who's the bad guy.....can the US repay it's loans?

Russia Likely To Default on Loans
Filed at 2:18 p.m. EST

By The Associated Press

MOSCOW ( AP ) -- As Russia's economy shrivels, the big financial question for 1999 emerges:
How will Moscow pay back billions of dollars in loans due this year to Western banks and

Answer: It can't.

And even worse, President Boris Yeltsin's government is making no apologies for its inability to

In fact, Russian officials have accused Western lenders of doling out bad financial advice along
with their money, and Moscow has unilaterally announced restructuring plans for some debts,
further antagonizing its impatient creditors.

``Contrition does not seem to form part of the Russian psyche,'' said Eric Kraus, head of fixed
income at Dresdner Bank in Moscow. ``Russia is in a situation where it can't pay its full debt
burden. But the government's attitude has been to tell creditors what it plans to do, and then
give them a week or two to accept it.''

(Tue Jan 12 1999 14:49 - ID#252150)
JTF@Intel will beat their number by at least a few cents. They are good at
playing this game. The important thing will be the conference call. They have to srike a fine balance & be guardedly optimistic so that investors won't sell the stock, & they can easily make their number for the next Q.
Because Intel is a bellwether, there is a possibility that a lot of investors will sell tech stocks on news because they're sitting on big profits. Maybe enough to knock the S&P down 5 or 6%.

I thought that Brazil would crash the mkts eventually but am now starting to have some doubts. This mania is so wild that investors are willing to dismiss any bad news because they are conviced that AG will come to the rescue. Basically, they're saying that the U.S. mkts can pretty well keep going up regardless of any outside events. Fortress U.S.A.

I did'nt think that the AU rally would last. Too much production. I feel that we need a few months of 260 or less in order to force the closure of more marginal producers. AU is rightly or wrongly perceived by most investors to be just a commodity & with the CB overhang a lot of supply has to come off the mkt so that the CBs will be able to consistently sell at these prices or higher without driving prices lower. I also would'nt be surprised if the IMF starts selling. The cupboards are pretty well bare except for AU.

(Tue Jan 12 1999 14:53 - ID#194311)
Klinton begins trade war with Europe/Japan simultaneously
AG in Asia, someone's NOT happy....rotting facade crumbling.

Anybody else want to from a posse to hunt down and kill vermin monetary manipulators before they drag us into another world war.....?

A hit list of people guilt of monetary crimes against humanity....more insidious but just as destructive as open genocide....
William Clinton
Alan Greenspan
Robert Rubin
Officers of Federal Reserve Bank
Officers of US Investment Banks
please add.

Polishing the barrel.

(Tue Jan 12 1999 14:57 - ID#197289)
don't need no stinkin' stock exchanges
Should be able to sell the stock on ebay or to your friends.

The rules may be a little different in the US but in Canada if you have a buyer you can sell your stock to them. A very small fee is payable to the securities commission for the transaction. Brokers pay the same fee if they sell your stock. The stock exchange is just ebay in a building. Perhaps a better way to avoid transaction fees is through Companies with reinvestment plans. No brokerage fees and easy purchase and sale. Don't know any in the gold business though. Does anyone?

(Tue Jan 12 1999 14:58 - ID#7568)

There is little doubt that today's action in the markets is reminiscent of other debt poppings of the recent past. Brazil and by extension the rest of South America are now apparently on the road to devaluation, default and death by IMF perscription. The 'logical' conclusion is that this plays out along the lines of the Asian debacle. Namely, another hit to global growth, bringing about further 'deflationary' pressures which manifest themselves in declining commodity prices and rallies in 'safe' sovereign debt. Hence the decline in the price of gold and the rally in US bonds.

There are however notable differences in the two situations.

The first and perhaps biggest difference is that far less financial leverage exists today as compared to when the Asian bubble popped. Many of the hedge funds which engaged in leveraged carry trades have been taken to the woodshed, so to speak, and will not be forced to cover vast sums of treasuries while disgorging equally voluminous hordes of emerging market debt. Because of this, it is likely that the rally in Tbonds will be short lived.

The second big difference is that Asia has already been popped so is not subject to repopping. As I have noted here before, there is a strong case to be made that the Asian economies have at least stabilized and are possibly turning the corner toward growth.

Another difference which is especially important to this group is that Brazil is not a major producer of metals as is Australia. The collapse in the Aussie dollar last year raised the price of A$ gold so that massive quantities of gold could be forward sold by Aussie mining co's.
Today's action has taken a few pips off an already rallying A$ but no big deal. The same is true for the Canadian dollar, which has been rallying nicely since the begining of the year.

Prognosticating gold prices can be real tricky given that central banks have so much say as to where the yellow stuff trades. The strongest feelings I have in this area is that it would be safe to write puts into this decline as we are entering an A$ price of gold which will cause Aussie mining co's to cover up some hedges.

It's a happy day for the bond market that Brazil has come unglued. Just when it appeared that the real danger to US financial markets was begining to sneak in, another country blows up. If I wasn't such a trusting sole I might be inclined to believe that this was not a coincidence but an orchestrated sacrifice. If the bonds don't continue to respond to this medicine, look out.

Who Cares?
(Tue Jan 12 1999 14:58 - ID#242214)
I-PO, U-PO, We are gonna make a lot of DOUGH!
Watching Yahoo rise 20% in one day makes it pretty hard to
take any of this seriously anymore.

My model used to be post-Civil War era. Two moderate depressions in
the midst of a generally deflationary economy, filled with rapid
technological change.

But watching Greenspan and the Internet stocks, I'm thinking.. quite
often now, that we're more likely in the Mississippi bubble this
time. When *this* puppy blows, fiat currency won't be worth dirt.
Heck, Russia is already bartering. Who knows what Japan will look
like. The newest banking bailout estimate is up to $3 Trillion.

Yup. The DOW will be kept up until The Blowout. It's like watching
a car tire being pumped... and pumped... and pumped... you just
KNOW it's going to be messy when the sidewall gives way.

(Tue Jan 12 1999 15:02 - ID#369352)
StradMaster - Brazil
Stradmaster, nobody is looking at Bazil because Bill Clinton, RR, AG and the IMF said that the problem is contained...even the banks came out and said that they had and extra $30 Billion just laying around ready to help their old friends in South America, just like in 1980....So that is the party line.....Now for what is really going to happen and to see who is going to loose, let us turn the page to the book of realisem, chapter ten, under the category "Lying to the public"....

1 ) Brazil and all of Latin America WILL COLLAPSE! It is just a matter of time now...This is what the Brazil stock market is telling us.
2 ) No one is watching because our gov't told us that this problem was taken care of and the sheep of this world could go back doing whatever they were doing before.
3 ) No matter how much money that they throw at Latin America, will they be able to pull it from default and destruction....AG & RR just hope that it holds on until they can get out of office.
4 ) Brazil is following the same pattern as Russia did...take the money and then default...OR....keep taking the money and THEN default.

This brings me to some basic simple rules for you who are lenders and borrowers:
Rule #1 - Make sure you borrow more money than anyone can affort to loose, then you will never have to worry about paying it back ( LTCM inspired ) ...the lender will continue to give you more money to pay the interest which you owe.

Rule #2 - Never give money to Russia or Latin America because you will never get it back...

Rule #3 - If you can't remember rule #3, refer to Rule #2...

The end of this "South Seas Bubble" is at hand....prepare!

(Tue Jan 12 1999 15:09 - ID#210282)
US markets stable for now -- Brazil to be bailed out somehow
James: Thanks -- that looks like the best working assessment. The IMF sells gold to prop up Brazil -- probably one of the few scenarios where the US could get the Germans and French to agree. Brazil is 'too big to fail' -- meaning 'extensive European and American investment in South America'.
I wonder -- just how much has the US offered? Is the US dollar to go down? I guess it all depends on whether Brazil dumps their fairly extensive US treasury reserves.

El Borak
(Tue Jan 12 1999 15:10 - ID#230155)
Aldabaran / Huff - RSMI
Aldabaran - I've had good luck with AJPM, although I've never bought silver from them ( and thus never paid a lot of shipping ) . Even my wife has used them without difficulty. Decent prices and sevice is pretty fast ( 2 weeks )

Huff - here's the RUMOUR from Coeur d'Alene on the RSMI/GSLM merger we talked about yesterday. RSMI is dead as a mining interest. They have traded their assets to GSLM for a lot of stock ( thus the reverse split, announced today ) and will shell out the company. Buying the last few days has come from insiders at the new company who will pick up assets on the cheap. For disclosure purposes, I sold half my RSMI this morning.

GSLM - will reverse split...they've issued a lot of stock for assets from RSMI and others. The assets they got from RSMI are good, some of the best locations in the silver valley. It's going to take some money to develop anything, but it's got a lot of potential. They've got more properties than ever before...I just hope they can figure out what to do with them.

These are rumours, not news, and are worth what they cost you.

Copyright 1999, El Borak inc. Makers of Drac-B-Gone brand Vampire Repellent. Hot Cross Buns sold separately.

(Tue Jan 12 1999 15:28 - ID#348286)
@OK THEN......
Gold beaten silly today. Latam Crashing. US$ being propped up around the world. Euro is floundering after strong start. YAHOO hits $440. +++ while earning 11 cents a quarter.

Next: The DOW and NASDAQ will come crashing back to reality.
Yep, wait and see........

Spud Master
(Tue Jan 12 1999 15:30 - ID#273112)
will someone please cue the PPT?
( tapping my fingers ) come on boyz - we can't let down all those cow-eyed baby-boomers dreams of wealth & easy retirement!

Spud, fry'n up some tempeh ...

(Tue Jan 12 1999 15:48 - ID#34459)
Internet Stock Index---INX.X
The 10 minute intra day chart of the INX.X....the internet stock index looks as though the parabolic rise into yesterday has been dramatically reversed today. The Tulips are wilting ......and FAST
Yesterday at 10:30 am EDT the CBOE volatility index broke out to signal the action we are seeing today. A hurricane shelter may be a good safe place in the near future

(Tue Jan 12 1999 16:01 - ID#266105)
no there there

(Tue Jan 12 1999 16:15 - ID#219363)
World Markets
Looks like the big accountant in the sky ran out of black pens, switched over to the pretty red ones instead. Where will we go, who can know. Japan is still a few hundred points above new lows, maybe she'll turn around tonight. South America, umm, yeah. This will all get a lot worse before it gets better. Maybe Greenspan should pull out his magic wand and sprinkle a little more pixie dust on the planet, the last fix seems to have worn off.

(Tue Jan 12 1999 16:16 - ID#244418)
Liquidity Crisis
1.Illnesses can be chronic ( long lasting ) or acute ( a crisis ) . The chronic illness of the world economy is deflation. That now appears ready to turn into its acute phase--a liquidity crisis.
2. The most certain effect of Y2K is a still further demand for liquidity on top of that. It will grow throughout 1999.
3. At the end of the process, the most likely form of reliable liquidity will be 90% silver coins. I have to believe that gold will be forbidden to private ownership, because the Money Power has clearly shown that it will do whatever it takes to preserve the fiat system, and this may be its greatest crisis.

(Tue Jan 12 1999 16:23 - ID#206196)
Profiting from the y2k menace?
The last week in December my coin dealer was offering $4000 for a bag of junk silver ( 90% ) and yesterday he offered $5100. Late December ( 1998 ) he was also offering to pay $6.00 for junk common date pre 1928 silver dollars and yesterday he was offering $7.25.

While hating to sound like a money grubbing, "taking advantage of the situation" capitalist, I'm wondering if the marketing spreads on these silver coins is not going to widen as the y2k scare escalates. In other words, aren't the odds pretty good that someone ( namely me ) who wanted to take a short term profit from this scenario could buy as many silver dollars at current prices as possible with the goal of selling them this summer at a nice profit?

Any thoughts?

(Tue Jan 12 1999 16:24 - ID#66144)
{EL Borak} Thanks - same info I developed today with RSMI about to form a shell
company. Obviously GSLM could care less about their stockholders as they issue large amounts of stock and continuously reverse split. Any payoff well in the future. RSMI .18B today.

(Tue Jan 12 1999 16:28 - ID#66144)
{EL Borak} Thanks - same info I developed today with RSMI about to form a shell
company. Obviously GSLM could care less about their stockholders as they issue large amounts of stock and continuously reverse split. Any payoff well in the future. RSMI .18B today.

(Tue Jan 12 1999 16:31 - ID#66144)
{EL Borak} Thanks - same info I developed today with RSMI about to form a shell
company. Obviously GSLM could care less about their stockholders as they issue large amounts of stock and continuously reverse split. Any payoff well in the future. RSMI .18B today. Delay due to trouble with the site.

(Tue Jan 12 1999 16:33 - ID#66144)
{EL Borak} Thanks - same info I developed today with RSMI about to form a shell
company. Obviously GSLM could care less about their stockholders as they issue large amounts of stock and continuously reverse split. Any payoff well in the future. RSMI .18B today. Delay due to trouble with the site.

(Tue Jan 12 1999 16:34 - ID#219363)
Rubin Won't Change Dollar Policy
WASHINGTON ( AP ) -- Treasury Secretary Robert Rubin insisted today that there has been no change in the administration's policy of supporting a strong dollar, despite the fact that the U.S. currency fell this week to a 28-month low against the Japanese yen. The dollar reached the low against the yen on Monday, extending a slump that has seen the American currency lose one-third of its value against the yen since hitting a high this summer. But the dollar was staging a strong rally today, boosted by reports that the Bank of Japan was intervening to sell yen and buy dollars to halt the dollar's slide. Rubin would not comment directly on reports that Japan was intervening to support the dollar, but he did say: "I'll just repeat what I've said so often, which is a strong dollar has served us well and our dollar policy is absolutely unchanged." Rubin spoke to reporters outside Blair House, the government's official guest residence, after a meeting with Argentine President Carlos Menem. American manufacturers have been pushing the administration to let the dollar fall in value, arguing that it will require a weaker U.S. currency to deal with a U.S. trade deficit that is expected to hit an all-time high of $167 billion for 1998 and climb even higher in 1999.

Strad Master
(Tue Jan 12 1999 16:49 - ID#250297)
Mea culpa!
LGB: Sorry! Sorry! Sorry! Drat! Would've loved to have met you. ( I though you were incredibly secretive and unwilling for anyone to know your true identity. ) I didn't post about the concert for two reasons: 1. ) Because I just didn't have the time to get to Kitco in the days just prior to going up there ( rehearsals, kids were sick, etc. etc. ) and 2. ) I am loathe to just post up a concert notice which is totally unrelated to gold or finances - I just feel it somewhat inapropriate to blow my own horn, so to speak, without some relationship ( however tenuous ) to the forum at hand. I am chastened, though, and will be sure to inform fellow Kitcoites throughout the world when next I am performing somewhere. Do listen in to the radio broadcast on Sunday morning at 10. We ( my piano trio and I ) did the Beethoven "Triple" Concerto and we're up first. Let me know how you like it.

(Tue Jan 12 1999 16:49 - ID#219363)
Brazil Says It Will Honor Debt
RIO DE JANEIRO, Brazil ( AP ) -- Trying to calm investors, President Fernando Henrique Cardoso said Tuesday that Brazil will honor all its foreign debt obligations. "The market can rest assured," Cardoso said. "We know what we will do, we know what we are doing, we will pay all our debts." His comments, however, failed to stem losses on the Sao Paulo Stock Exchange. The market was still reeling after the governor of Minas Gerais, Itamar Franco, last week declared a moratorium on the state's federal debt payments because its coffers were empty. The government responded Monday by blocking a $9.75 million federal subsidy allotment. Franco's move alarmed investors who were already worried about Brazil's $65 billion budget deficit, raising concerns that other states would follow the example set by Brazil's third wealthiest state.
Bottom$: How dare you try to make money in America.

(Tue Jan 12 1999 16:54 - ID#288186)

COMEX Metal Warehouse statistics for Jan. 12

Gold 809,210 + 0 troy ounces
Silver 76,271,457 - 628,656 troy ounces
Copper 98,097 + 289 short tons

(Tue Jan 12 1999 17:11 - ID#34459)
Index Says Major Move Ahead.................
The CBOE Volatility Index.....VIX.X on the close today has broken decisively up out of a bottom. This at the least says Wild Swings in stocks are just ahead . Since the market has risen 2100 points since October, Looks as though exhaustion has set in and this bulls legs may be knocked out from under it.

(Tue Jan 12 1999 17:25 - ID#34459)
Timely Advice Indeed.....
This guy has a good track record and should make you AU believers grin just a little, Check out his latest letter.........

(Tue Jan 12 1999 17:25 - ID#254288)

So long as the peons are led to believe that the stock market is the road to wealth and government bond market as a place to protect will suffer.

Of interest is that the banker/brokers will be the first to make the move from stocks to bonds and the peonry will likely be tardy and end up paying the interest.

So when they end up owing their souls to some rich bas*ards what will they do. Think about it.

(Tue Jan 12 1999 17:45 - ID#263226)
flation back in town as in the "in" kind

Cavuto reporting inflation up .4% in december a full 1 percent with food & energy.

This PPI not due out till wednesday but mysteriously apperaed on the internet this afternoon. It slipped out like a cigar out of a white hosue orfice.

4.8 % annualized, with food & energy thats 12%
If gold does break out of $300 this weekn it never will

(Tue Jan 12 1999 18:07 - ID#26793)
Dow/Gold Ratio = 32.88. The 233 day moving average is 29.70

(Tue Jan 12 1999 18:08 - ID#26793)
XAU/Spot Ratio = .243. The 233 day moving average is .247

(Tue Jan 12 1999 18:10 - ID#372180)
PPI is showing continued and even accelerating deflation I believe...except if one smokes.

(Tue Jan 12 1999 18:28 - ID#210114)
farfel...... What's your problem??
"Spock, it's always great to read your thoughts that suggest goldbugs are your "brothers." I do
love to read the flood of positivity you bestow upon the yellow metal.

farfel, what's to be positive about? Gold was been in steep decline in 1996-97, it couldn't hold $300 all through 1998, and it fell $4 again last night. And a bearish report has come out saying that gold will at best stay where it is in 1999.

I call them as I see them. Unlike others here I will not delude myself. I will not make investment decisions based on FAITH. I will make them on REALITY. If you can't deal with that I'm sorry.

We always like to be reminded of the great uncertainty of those 12,000 tons of gold in
Europe, just in case "we goldbugs" are beginning to feel too bullish in our thoughts about the

After all, at any moment, Europe may just decide to dump those many tons of gold on the
market. Hell, just because many of those nations have been holding those reserves for many
centuries is no reason to think otherwise, right?
Europe isn't saying what it will do. That's the problem. Again, don't fool yourself. Euopean countries have only had serious gold holdings for about 150 years. HArdly centuries. Furthermore, up to 1971, gold was the fundamental basis of the monetary system. That is no longer so. If the conservative Swiis are about to sell half their holdings, that doesn't say a lot for gold at the moment does it?


But you know Spock...What I am REALLY worried about are all those countries that have
ZERO to NO gold reserves. You know, countries like Canada and Australia...countries that
have a long history of gold reverence....what really scares me is the thought that any day now,


Get your facts right, Australia still holds one third of its original reserves, some 80 tonnes.


as economic crises roll across the globe, these former gold holders might suddenly initiate a
major GOLD BUY PANIC!!!! I am afraid, in such a scenario, that the little investor will not
be able to buy gold anywhere at a reasonable cost!


There was a major economic crisis in the world in 1997-98. Gold fell like a stone.


After all, those various former gold holding countries have not come forward and formally
declared whether or not they will or will not purchase gold during an economic crisis.

suspense is killing me, it really is.

As you would say,

LIVE LONG ( But always sell gold SHORT! )

I'm not short on gold, I'm long. As i've said before, If gold gets to US$400 tomorrow, there will be no happier than I.

farfel, I made an innocent comment on european gold as I see it. If you can't handle that, that's not my problem.

If you can't handle the heat.......... get out the kitchen.

(Tue Jan 12 1999 18:29 - ID#258427)
huh? Techtrader
Can we have an "inflationary deflation?" ..or..a "deflationary inflation?""???

Comex silver withdrawals sure were encouraging as well, eh..

go golf


(Tue Jan 12 1999 18:37 - ID#210114)
Hope this doesn't upset anyone.

Monday 11 January

Wall Street's comic book sharemarket


Wall Street's pros are getting worried again as irrational
optimism mixed with complacency sweeps over American
investors once more and the indices shatter records almost daily.

Even the Queen of Wall Street bulls, Abby Joseph Cohen, is
getting nervous.

The Goldman Sachs strategist has cut her recommended
portfolio weighting for equities by 2per cent to 70per cent. That
doesn't seem much but it's the first time she's backed off stocks
for almost four years, and a lot of people believe she'd back off
even more if she could do so without sparking a market rout.

She is not indicating that is so, and is simply saying that the S&P
500 has got back to fair value. But the redoubtable Abby carries
a lot of clout with Main Street investors who don't seem to have
noticed that last week's rally - topped off by another run to
records on Friday by the S&P 500, the Nasdaq Composite and
the Dow Industrials - hoisted the major indices through the
threshold of her targets for the end of this year.

Abby's semi-capitulation leaves the Morgan Stanley strategist
Byron Wien as the stand-out bull on Wall Street. He's still
expecting the S&P 500 to pile on another 20per cent this year,
and restated his views during the week in an investment forum
dust-up with one of the Street's major bears, Merrill Lynch's
quantitative strategist Richard Bernstein, who thinks shares are
overvalued and heading for a fall.

But Dick's not on his own. A lot of other strategists are on his
side, while the folks at Standard & Poor's itself think sentiment is
``far too bullish'' and are worried about the rally's lack of

They expect the market to peak this month, or in February, and
to end with a ``nasty correction'' if the market's advance doesn't
broaden first.

Not that lack of breadth is new. It was evident seven months
ago when the broader market started to tank long before the
big-cap stocks-dominated major indices turned, and has been
just as evident as the indices rallied from their September

Salomon Smith Barney's Jeffrey Warantz and John Manley have
come to the conclusion that there is both a ``comic book''
history of Wall Street and a real history.

The superficial comic-book history, spread to Main Street, USA
by most of the US media, is that 1998 was a champagne year
with the S&P500 gaining 26.7per cent, the Nasdaq Composite
rising 39.63per cent and the Dow Industrials adding 16.1per

The real history is that about 71per cent of Wall Street share
prices lagged the S&P 500 by more than 15per cent - in short,
even though the S&P 500 rose 26.7per cent, almost
three-quarters of the common shares that investors could have
had in their portfolios failed to return even 8per cent. Moreover,
66per cent of all listed shares in the US equity universe fell in

Some champagne year! The only stocks that rose were the big
ones. Shares in companies capitalised at more than $US20billion
( $A31.6billion ) gained almost 26per cent on an equally weighted
basis. For shares in companies capitalised at $US5billion to
$US20billion, the unweighted gain was just 6.19per cent. But
everyone else lost.

The smallest tier of stocks, capitalised at less than
$US250million, fell 24.1per cent on an equally weighted basis.
``Consider that there are over 5000 stocks in the smallest tier
and just over 100 in the largest tier and the reality of the situation
sets in,'' say the Salomon duo.

It sets in even further because their study also reveals just how
narrow the breadth of the market's rise was for the mainly
large-cap S&P 500 Index. The top 50 contributed 87.5per cent
of the year's gain.

``In the end, history will remember 1998 as the year that the big
stocks had a really big performance party and everybody else
stayed home,'' say the Salomon analysts.

They may be right, but the superficial comic-book history is still
the preferred version for most investors whose mutual funds are
buying those big stocks even if they're not - thus last week's
liquidity-driven blow-off. Some analysts think the run-up has
pushed almost to exhaustion and the indices could fall as much
as they've risen, but there were few signs on Friday of the
market connecting to fundamentals.

Even the far stronger-than-expected job numbers for December
failed to dent enthusiasm in the sharemarket, where the Labor
Department's report was seen as a boon for corporate earnings.

In the bond market, the 378,000 new jobs ( 212,000 were
expected ) and dip to a 4.3per cent unemployment rate
pressured prices and sent interest rates higher, with the two-year
note getting back to the levels it held last September before the
US Federal Reserve started cutting interest rates, and the
benchmark 30-year bond rising to 5.27per cent.

Bond futures broke through key support levels, but Main
Street's share buyers were oblivious.

They also do not seem to have noticed that the US dollar is
plunging against the yen, events in Japan look ominous, Brazil is
threatening another meltdown, Latin America is sliding into
recession and, back home, the number of earnings warnings for
the fourth-quarter corporate reporting season is nearing 500,
while the S&P 500 is selling at a price/earnings multiple more
than 33times, its highest by a wide margin.

(Tue Jan 12 1999 18:37 - ID#26793)
Great Central Mines news

Bill Buckler
(Tue Jan 12 1999 18:44 - ID#256381)
A Hypothesis
Consider, most here would agree that there is a large short position out on Gold. Now, for more than a year, Gold has been below $US 300. For most of that time, it has been between $US 290-300.

Gold pushed below $Us 290 early in the year, then broke back into that trading range. At the same time, the $US weakened substantially against the Yen, and long-bond yields ( after soaring in Japan late last year ) began to rise uncomfortably in the US.

Now, the BOJ has stepped in to boost the Buck, and Gold is safely tucked back below the $US 290 level. It would be safe to assume that since Gold has traded between $US 290-300 for almost all of the past year, that's where most existing short positions were established.

For the sake of the shorts, therefore, Gold must be kept below $US 295 and, to be on the safe side, below $US 290 is better.

BTW, the $A Gold chart has broken down. Updates of Gold charts and Dow/Nikkei comparison up at The Privateer website.

(Tue Jan 12 1999 18:45 - ID#26793)
Reacll my Brazilian "trigger" post this morning? It has been triggered.

THE Priest
(Tue Jan 12 1999 18:49 - ID#371242)

(Tue Jan 12 1999 18:50 - ID#219363)
Producer Prices Rise 0.4 Percent
WASHINGTON ( AP ) -- A stunning 30.7 percent jump in prices charged by cigarette companies pushed up producer prices overall by a brisk 0.4 percent in December. It was the biggest monthly increase in 14 months, but wasn't enough to prevent the Labor Department's Producer Price Index from declining in 1998 for the second year in a row. Prices fell 0.1 percent last year after plunging 1.2 percent in 1997, the sharpest drop in 11 years. That marked the first back-to-back annual decline in the index since the government began compiling it in 1947.

(Tue Jan 12 1999 18:53 - ID#288229)

the golden one.....

let them matters not...

jorlin sees them losing that which they knew was take..

indeed 6-pack has posted of the federal reserve...
our freedom WAS quite fleeting.......the game must be played
out as there are 9 is their game......



(Tue Jan 12 1999 18:53 - ID#220325)
Martin Armstrong says
"There is NO WAY the share markets will continure higher into 2007 without a serious correction of 30-50%". "a major rally to new record highs at least 10% ABOVE that of July 20th next year ( 1999 ) will warn of a 1929 capital flow type of patter. ( n ) This would become EXTREMELY dangerous particularly if no new highs are made in Europe."

(Tue Jan 12 1999 18:58 - ID#219363)
Declining Dollar Hurting Japan More
NEW YORK ( AP ) -- The dollar has lost more than a third of its value against the yen since last summer, but for now, the country that seems to be worrying the most about it is Japan. The strengthening yen is hurting Japanese exporters like Toyota and Sony just when Japan's economy is mired in its deepest recession since World War II. That helps explain why Japan's central bank sold yen for dollars Tuesday in an effort that lifted the U.S. currency, at least briefly, from the 28-month lows reached Monday. The dollar's fall from August's eight-year highs isn't expected to show up soon on stickers of Japanese cars and price tags of VCRs, but travelers returning to Japan for the first time since last summer may find their dollar buys a lot less in an already expensive country to visit. So far, U.S. financial authorities do not appear to see the dollar's slide as a threat. Despite frequent assertions from top U.S. officials in favor of a strong dollar, there was no sign that the Federal Reserve joined the Bank of Japan in propping up the dollar in the open market.

(Tue Jan 12 1999 19:00 - ID#26793)
Moody's downgrades Kingdom of Saudi Arabia bonds (without using the "D" word

(Tue Jan 12 1999 19:02 - ID#219363)
Weaker dollar against the Yen sure did set the Japanese off. No wonder, it's been said here many times that the last thing Japan has going for it is a huge market for exports. I didn't think a weak dollar was going to kill it, I figured it would be a loss of consumer confidence in the states. If Japan were to lose her export market, BAM !

(Tue Jan 12 1999 19:04 - ID#372180)
Inflation and Deflation
It looks like a particular finished good...cigarettes skewed the PPI data much higher. I still think we are in a deflationary period in America ( assuming no wars break out soon ) . I also think this is good for gold because deflationary periods cause holders of gold see their purchasing power increase ( take the price of gold and divide by the cpi index during the last deflationary period....1925-35 ) . If you want to see what happened to stocks in a deflationary spiral see the 1925-35 dow/cpi ratio. Stocks lost tremendous purchasing power.

(Tue Jan 12 1999 19:12 - ID#432148)
Winston - your 16:16
I respectfully question your belief 90% silver coins are preferable to gold coins as you believe the govt will not allow gold ownership to try to preserve the fiat system. In 1933 Roosevelt called in all gold coins and made it illegal to hold them. How is it we can now buy the old gold double eagles if they were all turned in and melted? And with the US govt now selling gold coins ( a hugh jump in sales last year ) would they dare recall them? Yes, they might try, but a lot of us say they will get them over our dead bodies! So own some guns along with your gold and silver, we may need all three. Insurance you know.

(Tue Jan 12 1999 19:13 - ID#219363)
Iraq Plans To Raise Oil Production
BAGHDAD, Iraq ( AP ) -- Iraq plans to raise its daily oil output as other oil-producing countries are trying to cut excess global production and bolster sagging prices. Iraq announced Tuesday it hopes to boost production to 3 million barrels per day from the current 2.5 million barrels, and to 3.5 million barrels within two years. The news helped send oil prices lower.

(Tue Jan 12 1999 19:17 - ID#259323)
@ all
I think the Japanese intervened in the market to weaken the yen a bit. The yen is strengthening because Japanese long bonds are strengthening. That is a long term trend. Not 1 or 2 days.
The intervention is a very short term thing. I expect the yen back down
below 110 by the end of the week or 2 weeks . Gold didn't have any monentum down today. Look at the volume on all the down gold stocks. It was 1/2 of yesterdays volume. The gold will be back up tomorrow.

(Tue Jan 12 1999 19:28 - ID#26793)
Deflation was a pre-1934 problem; no need to worry about it now

(Tue Jan 12 1999 19:35 - ID#254288)

The mass media has everyone believing the market is doing fine, while the latecomers ( the wage earning taxpayers ) are buying the banker/broker's profitable trades and being set up for financial ruin.
As usual the big guys pull the financial trigger and the little guy gets the wound.
In the end result, the big guys feel that the little guys will pull another type of trigger, but never at them. What the big guys don't realize that the little guys are wise.
So dig in deep, because what will be flying will not be able to discern who you are.

(Tue Jan 12 1999 19:51 - ID#210114)
Beaming Up Now......
Live Long and Prosper.

(Tue Jan 12 1999 19:51 - ID#219363)
That sounds like this guy I just listened to on CNBC earlier, the one who was saying that current valuations aren't high, instead, the old valuations that have existed in the market since it's creation were too low. Well of course they were ! Hell, why didn't I realize that. A P/E of 30 is completely sane, it's the old P/E of 12 that was screwed up. Actually, I'm pretty sure a P/E of 80 is probably the bottom, the market has been undervalued throughout the history of the exchange. My favorite part was when the blonde chick ( no offense to females intended ) asked him about the possibility of a crash and he said something like "It'll go up and down and up and down", like he was a kitten watching a ping pong ball bouncing on the floor. Yeah, it goes up and down, what a genius. Who pays these people.

(Tue Jan 12 1999 19:53 - ID#26793)
The buy and hold days for stocks are over; market could go sideways for years

(Tue Jan 12 1999 19:57 - ID#285430)
Confiscation of gold, and propaganda in the Dictionary...
An old copy of a Webster's Dictionary from the 50's had the word
"half eagle" defined, incredibly with legal commentary. It reads

A five dollar gold coin of the United States. By the way: possession
of these coins is currently illegal in the United States.

I've never seen a dictionary definition with a "By the way..." clause
like that! Much less some legal comment which may or may not be
valid in the future. Eerie.

Few of us appreciate the intensity of the attacks against gold during
the 30's, 40's, and 50's. Anti-gold propaganda saturated our culture
in many ways.

As for me, you can keep your 90% silver coins and such. Yes, I
anticipate confiscation of gold. But that's what will make it worth
all the more...


(Tue Jan 12 1999 20:25 - ID#244418)
Question for APH
APH. Can you give us any advice on the silver market? Thanks for your comments.

(Tue Jan 12 1999 20:33 - ID#218215)
Was that a POP I just heard? They should call them InterNUT stocks.
This market is and HAS been done for a while now. Just because the last few generals continue on up while the broader market of stocks are going nowhere is what you expect at a blowoff top.
There may be a bit more, but everyone I know, EVERYONE is in this market.
From Advanced GET
Every measure I follow is Screaming SELL!!!
At a top the smaller caps come to the party last. This chart must resemble the 1929 parabolic rise to that final high.

Don't get caught up in the emotion people, this will be viewed in hindsight as one of the greatest sentiment extremes ever!

(Tue Jan 12 1999 20:46 - ID#288264)
They done did it again......
Tuesday January 12, 7:02 pm Eastern Time Premature U.S. Dec PPI release startles economists By Ellen Freilich NEW YORK, Jan 12 ( Reuters ) - Market participants still at the office after both the stock and bond markets closed on Tuesday got a surprise from the U.S. Labor Department -- an early release of a key December inflation measure. In its second accidental release of usually closely guarded government economic data in just over two months, the Labor Department's December Producer Price Index ( PPI ) seeped out on its Web site prematurely. In a report that was not due until 0830 EST/1330 GMT on Wednesday, the Labor Department disclosed that PPI rose 0.4 percent in December. Excluding food and energy components, the so-called core PPI jumped 1.0 percent. ``At first I thought it was a forecast,'' said Richard Kasmin, senior economist at Warburg Dillon Read LLC, of the data that flashed early on trading screens. "And then I saw it was from the BLS ( the Labor Department's Bureau of Labor Statistics. ) It was accidental release redux, as far as the markets were concerned. The BLS had caused turmoil in the financial markets on Thursday, Nov. 5 when it released part of the market sensitive monthly employment report for October on the Internet nearly 24 hours ahead of schedule. That Thursday, reports of a weaker-than-expected October U.S. nonfarm payrolls number spread like wildfire among traders, creating chaotic market conditions as the data filtered out in dribs and drabs. The Labor Department responded by releasing the entire October report early and said the mix-up was due to human error. The department said it would institute safeguards to avoid a recurrence. But the safety walls apparently proved porous. On Tuesday, after its inadvertent, late-day release of its PPI, BLS spokeswoman Kathy Hoyle said the data became public after a premature posting on the Internet due to an internal computer programming error. ``It was discovered late this afternoon here at BLS,'' Hoyle said. ``It's still being investigated ( as to ) exactly how the problem occured. We don't know all the details yet.'' Carol Stone, deputy chief economist at Nomura Securities International Inc., said one unusual aspect of the early release is that traders in Tokyo would be the first to react to a U.S. economic report. ``Traders in New York cannot do anything,'' she said. ``They have closed up. Tokyo will get first crack at this number.'' Some people expressed dismay at the second such mishap in key government statistics in less than three months. ``I can't believe that it would happen again,'' said Carl Tannenbaum, chief economist and head of Treasury research at ABN AMRO North America. To the Labor Department's credit, it quickly came in and confirmed the data, Tannenbaum said. ``But certainly the market gets used to a certain rhythm where numbers like that come out first thing in the morning when the futures exchanges are open, ( and ) the cash markets are in full swing,'' he said. ``When you have something come out like this after five o'clock New York time, it's awfully hard to get any reaction to it. I know that there are a bunch of traders that are probably staying late trying to get their positions together in light of the new information.''

(Tue Jan 12 1999 20:50 - ID#341227)
Parsing DR. SPOCK from the planet GOLD.
Spock asked...

Farfel, what's your problem?

None, I am most content.


Spock said...

farfel, what's to be positive about? Gold was been in steep decline in 1996-97, it couldn't hold $300 all through 1998, and it fell $4 again last night. And a bearish report has come out saying that gold will at best stay where it is in 1999.


Well, a four dollar fall is much better than a forty dollar fall! Cheer up, and you should read all the other reports ( some coming from major Wall Street brokerages ) that forecast gold to reach $340 or better this year. Don't be so negative.

Spock says...

I call them as I see them. Unlike others here I will not delude myself. I will not make investment decisions based on FAITH. I will make them on REALITY. If you can't deal with that I'm sorry.


I guess reality is in the eyes of the beholder. What you call faith, I call reality....and what you call reality, I construe as faith.


Spock says....

Europe isn't saying what it will do. That's the problem. Again, don't fool yourself. Euopean countries have only had serious gold holdings for about 150 years. HArdly centuries. Furthermore, up to 1971, gold was the fundamental basis of the monetary system. That is no longer so. If the conservative Swiis are about to sell half their holdings, that doesn't say a lot for gold at the moment does it?


America hasn't been saying what it will do with its gold...yet most people seem unconcerned. Why should we be concerned with what Europe will do with its gold?

Last I looked, the Bank of Internatonal Settlements still uses gold for settlements of transactions between countries. On an intra-national level, gold seems to matter a great deal. Why else would countries like China purchase the stuff in huge it simply for its "commodity value??"

Who says the Swiss are about to sell half their gold holdings? They only talk about it so far, seemingly for its psychological effect. It's kind of like Greenspan warning about "irrational exuberance" in the financial markets some three years ago, yet doing absolutely nothing to curb it.

Spock says....

Get your facts right, Australia still holds one third of its original reserves, some 80 tonnes.


Well there you go now...despite the dramatic sale of almost 70% of their reserves, Aussieland is still retaining 80 tons. If gold were beocming as worthless as you seem to contend, then you would think Aussieland would have dumped the whole load

Spock says...

There was a major economic crisis in the world in 1997-98. Gold fell like a stone.


Oh, really, well I don't seem to remember this major economic crisis you describe. Here in sunny, warm, Los Angeles, I don't remember any gas essential commodity bank notable stock market collapse in the value of the American Dollar... nothing very dramatic happened here in AMERICA. When the economic crisis hits America, the linchpin of the world capitalist system, then tell me just how much more valuable paper articles of faith ( e.g., the American Buck ) will be relative to hard assets with real intrinsic value.

Spock says....

I'm not short on gold, I'm long. As i've said before, If gold gets to US$400 tomorrow, there will be no happier than I.


I'm glad to hear that gold at US $400 tomorrow will make you happy. Since perception is a determinant of value, you would best kill the negativity about gold lest it spread exponentially and frustrate your wishes.

Farfel ends by exhorting Spock to Live Long and Prosper.



Dave in CO
(Tue Jan 12 1999 20:52 - ID#229141)
Y2K non-event hits U.S. Senate

The problems started in October and will be fixed in a month. But you cain't trust them programmers' estimates.

(Tue Jan 12 1999 20:56 - ID#18355)
silas re: confiscation
i disagree that confiscation of gold will occur, reason is no one really has any, except maybe a few old timers ( thanks barron's ) . the last time around ( cofiscation time ) , there was a lot more coins and such around because people used them and hoarded them. ask anyone under 35 today if they own a gold coin, or a silver coin and i wager your response would be less than 10%. ask people between 35 and 45 and chances are they remember the silver/gold bull of 1980 and also remember most people losing money because of the spike/crash attribute of that bubble; but do they have a cache of coins? only a few, a low percentage would still have some. the old timers are the ones who have any coins left. why confiscate when it is time to promote ownership?

if the bankers launch a world wide gold backed system its going to be really attractive and people are going to buy a 1/4 ounce coin for big dollars. the bankers are going to be able to squeeze everyone all over again because they have the gold and make the rules. they are going to ram gold down everyones throats at prices that will make us all choke.

fiat gold is even better than fiat paper.

(Tue Jan 12 1999 20:57 - ID#3043)
Market Top !!!!!!!!!!!!
This looks like the makings of a market top to me ... but I've said it so many times before ....

(Tue Jan 12 1999 20:58 - ID#219363)
Tokyo Stocks Lower in Early Trading
TOKYO ( AP ) -- The dollar was higher against the yen in early Tokyo trading following currency intervention by the Bank of Japan the previous day. Japanese stocks were lower following losses on Wall Street. The dollar bought 112.56 yen in early trading, up 0.06 yen from late Tuesday in Tokyo and also above its level of 112.43 yen in New York. The Nikkei Stock Average lost 11.54 points, or 0.09 percent, to 13,349.43 in the first 30 minutes of trading. On Tuesday, the index lost 7.51 points, or 0.06 percent. On Tuesday, Japan's central bank intervened to support the dollar for the first time since February 1996 following growing anxiety over the yen's recent rally. Traders said the central bank spent $1 billion to $2 billion in foreign exchange markets as it dumped yen. The dollar, after sliding from a high of more than 147 yen in August to a 28-month low on Monday, rose more than 4 yen on the back of the surprise intervention. A stronger yen tends to make Japanese exports more expensive abroad and cuts into profits earned overseas. Lower earnings by exporters could hamper efforts to jump-start Japan's recession-plagued economy.

Heavy Hitter
(Tue Jan 12 1999 21:02 - ID#402188)

(Tue Jan 12 1999 21:04 - ID#288264)
And a kind word for Silver from Bill Murphy (Metropole Cafe)
I came out with this price forecast as silver was crashing last Monday and said "the market is sold out". It just appeared to me that way after many years at this game. My big hunt is to try and find out if Martin Armstrong is covering yet.

Speaking of silver, the Midas camp thinks the price of silver will double in 1999 and reach $9.78 by the end of the year. Our thinking:

To a great degree, silver is a psychology kind of market. Known official U. S. inventories ( Comex warehouse stocks ) have dwindled for years and now stand at a very low 76,596,00 million ounces. If one had been told years ago that the stock number would be this low, we all would have expected the price of silver to be substantially higher because of the tight supply.

The price has not responded to the upside however, as one would have expected due to future price expectations and inventory accumulation factors. With gold continually failing to stay afloat above the $300 level and commodity prices in general dropping sharply during 1998, producers and hedge funds have been encouraged to sell silver rallies- always expecting the spec rallies to fail. Purchasing managers have relied on " just in time inventory buying" for their silver purchases. With the dismal outlook for precious metals prices, there has been no reason to forward purchase in size and accumulate large silver inventories. Eventual supply has never been in doubt so far and purchasing managers have cut down their capital costs by reducing their silver on hand.

It is also a psychological market for speculative investors. Many remember what happened to the price of silver in the inflationary 70's when the price went to $50 per ounce. Nothing could be farther from the late 70's scenario than the late 90's one. Commodity prices have been trending down, not shooting up. We have seen dishoarding, not hoarding. This negative psychology has severely dampened speculative commodity fervor and hard asset investing.

As a result of this present day thinking, it is our opinion that silver inventories are critically low all over the world and that pent up speculative demand for silver could be unleashed at any time. It is not atypical to see Reuters news releases such as this morning's-" Indian silver firm on low supply". The Indian silver premiums have been strong for many months which also indicates that silver inventories are low. In a sense, silver is a "sold out" market in a big picture way and that is why the price has rebounded from sell offs. A "sold out" market is a recipe for a price explosion - "sold out" meaning those that want to be short, are so. Therefore, we have run out of forceful sellers.

This opinion, by the way, contradicts the Martin Armstrong camp ( Princeton guru group ) that thinks the price of silver is headed for $2.80. They say the silver inventories in the U.S. have been moved to London to hide them from regulatory authorities. Others say that the Arabs have huge silver inventories in London, accumulated from the oil hay days, and will dump them on the market. Well, Brent crude has been trading below $10. Why have they not dumped this mysterious silver? If there ever was a time for Arab silver dumping, it is now. They know that most commodity prices have swooned. Why hold on? Why not at least start shipping the silver to India. The silver premiums in that country have been running 10 to 12%.

The other tidbit of information that is out there that indicates that this market is "sold out" is the contango ( forward prices ) continues to trade at less than full carry ( the interest costs plus storage and insurance ) . This unnatural, pricing condition of silver suggests that the silver market is actually very tight. The spot price of silver is almost the same as the March futures contract. A change in psychology could unleash a super bull market in a blink.

(Tue Jan 12 1999 21:14 - ID#344326)
The following post was taken from USA Gold Forum....
like a thief in the night

Cashless in 1999?
Will the Banks put the "Squeeze" on us soon?
By Ken Raggio
[edited for length]

A close friend of mine was conducting a Y2k seminar in mid-November
with about 300 people in attendance. At the end of the session, a lady
introduced herself as a bank official at the largest bank in her
state. My friend asked her if her bank was ready for the Year 2000
computer crisis.

Her reply was very interesting. First of all, she said that every bank
employee had been instructed to answer all public inquiries by saying
"Yes, our bank is Y2K Compliant." Any employee who answered otherwise
would be fired.

Then she informed him candidly that their bank had already conducted
two Y2k tests on their computer systems. BOTH TESTS failed completely
-- shut down! So in spite of the public assurances that this huge
bank is ready for Y2k, they are plainly LYING to the public.

Secondly, she offered additional information. She said, "We have also
been informed that in April, 1999, WE WILL NO LONGER ISSUE CASH!"
What?? Friend, can you tell me why the largest bank in that state has
informed it's officers that it will not issue cash in April? I
suspect that something big is about to happen, and it's going to
happen a whole lot sooner than we think.

I just received a short email from one of my readers with a one-line
message;" My daugher works for ____ ( one of the largest banks on the
East Coast ) , and they have advised them to set aside enough cash for
3-6 months. They say the bank could be closed for days at a time."

(Tue Jan 12 1999 21:17 - ID#244418)
The following was posted on the Silicon Investor "Y2K Impact" forum at:
"To: Bill Murphy ( 1560 )
From: a. paisley Tuesday, Jan 12 1999 8:20AM ET
Reply # of 1567

"A coin dealer told me a key factor is that bags of silver are not coming in and there's a very tight coin supply according to a trade show last week at ORLANDO Fla. People are buying instead of usally selling off silver.A 1 month wait to get a one thousand face bag of silver plus dealers throw a dollar premium 5500 for a 1000 face value of coins.Check this fact out . The dealers are saying Y2K will cause this panic and the FUSE is BURNING OUT OF CONTROL."

(Tue Jan 12 1999 21:19 - ID#194311)
World's a stirring from 80 year slumber... excellent piece clipped from The Times of London Opinion column.

John Laughland

'The Bank of England should be
privatised; it should mint a gold
sovereign; and banknotes should
be convertible on demand'
When politicians start calling for stability,
free-marketeers should reach for their
revolvers. First in the firing-line should be
the French President, Jacques Chirac, and the
Japanese Prime Minister, Keizo Obuchi. At
the weekend they joined a chorus begun by
Gordon Brown and Bill Clinton's Treasury
Secretary, Robert Rubin. Trying to manage a
national economy in a competitive world
appears to be too difficult, so they are trying
to manage the world to make it less

They all argue for new international
regulation of financial markets. It is not
surprising that their answer is more
regulation. But it is odd that liberal
economists concede one of the regulators'
premises. They agree that world markets are
pretty free, and thus say there is no problem.
But there is a problem. Markets are not free

The currency speculator George Soros argued
last week that global markets were
"inherently unstable" and that the IMF
should become "something resembling an
international central bank". He was echoing
recommendations made by Mr Brown and
Mr Rubin.

Mr Brown has peppered a series of speeches
with references to the need for "a financial
architecture for the new global economy",
"global financial relation", and "new global
structures for the new global age". Mr Rubin
has argued that "we must substantially
improve the architecture of the international
financial system in order to better prevent
crises in the future".

The idea that world financial markets are
unregulated is, of course, precisely what free
marketeers should like about them. But
nothing could be further from the truth. All
currencies are pure state creations: they are
not titles to any property or commodity and
their value depends on how well the
government or the central bank manages
them. Any state-controlled good is bound to
fluctuate wildly in value because the state is
a very clumsy regulator of supply. As the
Soviet experience showed, state products
swing from being in absurd surplus to
chronic deficit.

The fact that financial instruments and
trading technology have developed so greatly
is no indication that the market is freer. You
might as well argue that the development of
burglar alarm technology is evidence of
improved public security.

Prior to 1914, broadly speaking, a banknote
was a receipt for gold deposited with a bank.
The holder could redeem it for that coin.
Consequently the currency was a commodity,
obeying the normal laws of supply and

Between 1914 and 1971 a series of
state-inspired assaults were mounted to
destroy this natural order and to nationalise
the control of money. States simply absolved
central banks of their obligation to redeem
their bank notes, in cash. It is just as if a
private bank refused to honour its cheques or
denied account holders access to their own
money. The introduction of the euro is only
the latest example of states colluding to strip
citizens of rights, and it is because
inconvertible paper currencies are an
enormous accretion of state power that EMU
is such an important constitutional issue.

Throughout British history - until recently -
support for free trade and gold as the
currency have been conjugated together. The
theories of Adam Smith are
incomprehensible without understanding his
support for metallically convertible currencies
whose supply did not depend on the State.
Richard Cobden, the Liberal who led the
Manchester laissez-faire movement, wrote:
"I hold all idea of regulating the currency to
be an absurdity. The currency should regulate
itself; it must be regulated by the trade and
commerce of the world."

The right response to global regulation is not
to support the status quo of state-sponsored
world monetary disorder. It is to return to the
monetary regime Britain traditionally
championed. The Bank of England should be
privatised; it should mint a gold coin, the
sovereign; and banknotes should be issued
which are convertible on demand into it. It is
only by re-establishing a rule-based
monetary regime domestically that markets
can be stabilised at the international level.

(Tue Jan 12 1999 21:29 - ID#344326)
Great post taken from Silicon Investor....
Has Greenspan painted himself into a 12 inch square corner?

The Street thinks that Alan is a stock market insurance plan,....any problems and he'll just print more money and/or drop rates. Unfortunately, this appears improbable from our perspective.

The U.S. current account deficit and trade imbalance ( love those polite words that describe unfolding calamities ) require huge foreign flow of funds ( say about a minimum of $2.0 billion per DAY of net foreign capital inflows ) .

Last year, the flow of funds to U.S. based equity mutual funds was well DOWN from 1997 from domestic sources.. The difference was provided to our markets by the foreign buyers, especially the Japanese savers following "Big Bang". Those new-comers had their heads handed to them on both a currency and stock price decline basis, that probably ran about minus 40%. They appear to be a bit less enthusiastic now.

Foreign central banks that bought $100.0 billion or more of treasuries throughout each of 1995, 1996, and 1997, ended up very large net sellers ( say $120.0 billion ) in 1998. That's a huge swing to make up one way or another, and will test even Alan's ability to "monetise".

With the Euro now a competitive alternate reserve currency, Alan appears to have a nasty choice, the stock market through a continuance of current policies, or save an endangered dollar through INCREASED rates. He can't have both.

A falling dollar is guaranteed to frighten prospective foreign investors,...why buy U.S. denominated assets just to get whacked by a currency crunch?

A bond market lock-up triggered Alan's desperate act in the late Fall, and he successfully got the bonds moving again, but look at the long term bond action already,....this must be a minor nightmare for big Al.

European rates ( roughly 3% ) already imply a U.S. "borrowing premium" of 1.75%, which is huge. Europe now becomes the borrowing arena of choice. Any further U.S.rate decreases without a similar decrease in Europe just makes things worse.

I'd bet a dozen Tim Horton donuts that Alan can't "cut it" anymore. To do so would ensure that foreign currencies stopped flowing in, which would ensure a nasty crunch for the U.S. ( especially the markets ) .

I talk to many foreign nationals. This view is not prevalent yet, but is showing up. Personally, I don't know how some sort of dollar-or-market smash can be avoided given the circumstances.
Take some pot shots at this view, as I'm trying to find an alternative scenario but can't.

Best, Earlie

(Tue Jan 12 1999 21:36 - ID#288264)
Stolen from S.I. thread
Has Greenspan painted himself into a 12 inch square corner?

The Street thinks that Alan is a stock market insurance plan,....any problems and he'll just print more money and/or drop rates. Unfortunately, this appears improbable from our perspective.

The U.S. current account deficit and trade imbalance ( love those polite words that describe unfolding calamities ) require huge foreign flow of funds ( say about a minimum of $2.0 billion per DAY of net foreign capital inflows ) .

Last year, the flow of funds to U.S. based equity mutual funds was well DOWN from 1997 from domestic sources.. The difference was provided to our markets by the foreign buyers, especially the Japanese savers following "Big Bang". Those new-comers had their heads handed to them on both a currency and stock price decline basis, that probably ran about minus 40%. They appear to be a bit less enthusiastic now.

Foreign central banks that bought $100.0 billion or more of treasuries throughout each of 1995, 1996, and 1997, ended up very large net sellers ( say $120.0 billion ) in 1998. That's a huge swing to make up one way or another, and will test even Alan's ability to "monetise".

With the Euro now a competitive alternate reserve currency, Alan appears to have a nasty choice, the stock market through a continuance of current policies, or save an endangered dollar through INCREASED rates. He can't have both.

A falling dollar is guaranteed to frighten prospective foreign investors,...why buy U.S. denominated assets just to get whacked by a currency crunch?

A bond market lock-up triggered Alan's desperate act in the late Fall, and he successfully got the bonds moving again, but look at the long term bond action already,....this must be a minor nightmare for big Al.

European rates ( roughly 3% ) already imply a U.S. "borrowing premium" of 1.75%, which is huge. Europe now becomes the borrowing arena of choice. Any further U.S.rate decreases without a similar decrease in Europe just makes things worse.

I'd bet a dozen Tim Horton donuts that Alan can't "cut it" anymore. To do so would ensure that foreign currencies stopped flowing in, which would ensure a nasty crunch for the U.S. ( especially the markets ) .

I talk to many foreign nationals. This view is not prevalent yet, but is showing up. Personally, I don't know how some sort of dollar-or-market smash can be avoided given the circumstances.
Best Earlie

(Tue Jan 12 1999 21:40 - ID#344326)
@ Shadowfax
We've got to stop meeting like this.....

Heavy Hitter
(Tue Jan 12 1999 21:43 - ID#402188)
Where is Mr. Cool Kat Hep at ...........
If he had a shoot gun he couldn't hit the broadside of a barn.
A chump with a little change. Cha ching.. Still can't hear anything.

Oh, almost forgot about about the other chump "Another".
Are we still on the same page folks. Hope I haven't lost ya.
This was Another fairy tale who apparently had you guys
checking your pillow in the morning to see if the tooth fairy
came to your rescue. Now, I'm not saying all of you are in
this camp but to avoid alot of embarassment I won't mention
names. Me included.

Just a heed of warning for new posters who haven't been trying
to take a magic carpet ride of late with Kitco's latest characters in
their quest for false predictions. Lurkers beware, including all you
innocent housewife's who only want more money and toys for their
faithfull husbands.

That's it and I bid you all a good nite. Don't forget to check your
pillow in the morning, Farfel or Vronsky might have left you something
to chew on while your shirt is flying out the window.

(Tue Jan 12 1999 21:48 - ID#288264)
Yes, especially when Earlie is my best buddy ( g )

(Tue Jan 12 1999 21:51 - ID#190411)
The stuff about the banks rolling up the carpet in April is preposterous. They are still advertising 125% home equity loans on the T+V. It'd be quite a show, if the banks said that you couldn't have your "money" back in the early spring. That would give the vastly annoyed depositors several months of good weather to take out every vestige of the system. Can you imagine the conversation? "Honey, I know that you have been stewing about the illiquidity of your deposits, and, yes, we cannot buy food, so, as there is nothing on T+V, let's gather a mob, and go to the Federal Reseve Bank and burn it to the ground."

(Tue Jan 12 1999 22:03 - ID#344326)
Very funny post and a good point. I'm not as pessimistic about Y2K as I once was. I panicked early to avoid the rush. After all, I am a Goldbug.

(Tue Jan 12 1999 22:05 - ID#190411)
Heavy Hitter,
I always thought that your handle was indicative of the vastly inflated view of yo'self that you hold. So, you have returned to mock the ones that do not revere you.
Perhaps you, the most prescient, amongst the galaxy of analysts, can explain to me what the rise off the August bottom to the high of september was all about. 273-305 was notable, don't you think?

(Tue Jan 12 1999 22:13 - ID#344326)
@ Heavy Hitter
I see you have had quite a Spiritual Evolution since we last saw you. What do you attribute to your new-found compassion? Have you sobered-up?

(Tue Jan 12 1999 22:23 - ID#190411)
I got a laugh ot of your reply, also.
Today was a downhead riff, eh?
I bought some more of these damned goldshares at close to the low in late December. They were looking good yesterday, and I had the urge to sell as I know what always happens. I am not a fanatic anymore, though they make good trading vehicles.
I have gotten past the mindset that Mr. Heavy Wanker describes. Until the cabal ( whether it be real or imaginary ) gets it's lardbutt off'n gold, I am going to treat most goldshares as a trade.
There is a load to be made on the Y2K PM buyers. I try to educate them as I run across them. I have saved a few of them from foolish wastes of money.

Heavy Hitter
(Tue Jan 12 1999 22:27 - ID#402188)
Sorry Farfel but your just a cut above Vronsky
Just stop sharing your dreams with kitcoties and everyone
would start liking you again. Well not everyone. RJ would
still keep his panties in a wad over you. Let's just say he's
your discreet buddy in one form or another. Is he? Maybe
I stumbled onto something here. Don't worry I won't tell anyone.
Why don't you surprise Vronsky and stuff his pillow with all the
fluff so when he wake's up he can put a URL on the gold/eagle site
and inform his followers you and RJ are really discreet buddies.
Vronsky would probaby greet you both with open arms into a three
way love triangle. If the movie producers ever got ahold of this you
love birds would be on the big screen before you knew it packing fudge
for all kitcoties to see. WOW !! This could be your BIG BREAK.

Heavy Hitter
(Tue Jan 12 1999 22:28 - ID#402188)
Sorry Farfel but your just a cut above Vronsky
Just stop sharing your dreams with kitcoties and everyone
would start liking you again. Well not everyone. RJ would
still keep his panties in a wad over you. Let's just say he's
your discreet buddy in one form or another. Is he? Maybe
I stumbled onto something here. Don't worry I won't tell anyone.
Why don't you surprise Vronsky and stuff his pillow with all the
fluff so when he wake's up he can put a URL on the gold/eagle site
and inform his followers you and RJ are really discreet buddies.
Vronsky would probaby greet you both with open arms into a three
way love triangle. If the movie producers ever got ahold of this you
love birds would be on the big screen before you knew it packing fudge
for all kitcoties to see. WOW !! This could be your BIG BREAK.

(Tue Jan 12 1999 22:51 - ID#344326)
This is a GREAT read.....Commentary made by Bill Murphy of "Le Metropole Cafe"
Yesterday, I had a wonderful conversation with internationally renowned and London based, Teddy Butler Henderson. "Teddy", one of England's respected elder statesmen, has a very highly regarded investment service and is very well plugged in with the investment community in Europe.

You will get a kick out of this story. I sure did. "Teddy" had lunch in London with Alan Greenspan in 1971. Greenspan had his own consulting firm at the time. Both "Teddy and Greenspan" were believers in the Kondratieff wave ( cycle ) theory. Greenspan told Henderson that his ambition was to become the top man at the Federal Reserve. Knowing the Kondratieff cycle would be predicting a crash or depression of sorts about the time he would become head of the Federal Reserve, Greenspan told Henderson he could stave it off by various means ( injecting money into the system, supporting the dollar, etc ) and he intended to do just that if his career ambition came true. And you wonder if the gold market has been controlled!!!!!

Teddy ( TBH ) has been a believer that the dollar is in deep doo doo and, that while it has been weak recently, it has more downside to go - about 5% more against the Euro. Guess who wants it that way? Contrary to what you might think, it is Alan Greenspan, according to TBH. Teddy says that Greenspan knows that he had to take certain steps to keep the bubble going ( a la the conversation he had with him 28 years ago ) . Greenspan knows that our trade deficit is a problem and that our manufacturing sector and real world export sector of our economy needed help. Thus, he made the decision some time ago to work on getting the dollar down. To keep our bubble going, he needed to have this sector of our economy become more competitive. Solution - lower dollar.

Now, this does not make the euro crowd very happy according to TBH. Their reserves are in dollars and with the new start in EMU, they do not want economic problems for themselves. Today, for example, their were reports over a French, German clash over farm policies. A lower dollar can only exacerbate that clash.

At the same time, the EMU wants a strong euro in general. But they want it that way because of a strong economy, not a weak one. In that light, TBH feels that they will up the gold backing of the euro as a reserve at some point in the future. Interestingly, we reported talk of this to you some time ago and today's ECB comments are very encouraging. Teddy feels that the ECB will break ranks from Greenspan in his efforts to keep the price of gold down, referring to Greenspan's comment last July to a congressional committee, " Nor can private counter parties restrict supplies of gold, another commodity whose derivatives are often traded over the counter where central banks stand ready to lease gold in increasing quantities should the price rise". It is this breaking of the ranks that will spur the price of gold to much higher levels according to TBH.

TBH has been a big fan of the US stock market and has his followers heavily invested here ( while hedging the currency risk ) . His reasoning is the strong U.S. economy and he knew what Greenspan was up to. He invested in the US equity market with conviction ( and with the help of his 28 year old information ) knowing that Greenspan would lower interest rates sharply in a pinch. For the future, he sees inflation in the US as workers demand much greater compensation for their efforts, especially as they see this incredible stock market rally. TBH thinks Greenspan will be very slow to hike interest rates in response to this inflationary threat, citing previous false alarms of inflation. However, that growing U.S. inflation is the other reason TBH is bullish on gold.

His long term U.S. equity outlook is not a rosy one, however. TBH sees the Greenspan induced bubble blowing up by August. Sometime before then, he plans to advise his clients to bid sayonora to Uncle Sam and our stock market. Sounds a bit like Eric Barande.

Raul Duke
(Tue Jan 12 1999 22:53 - ID#22852)
On the debate between farfel and spock:
Although I hate to say it, farfel's post did an excellent job of taking apart spock's points. If I can add one thing: when discussing the gold reserves of any nation, it helps if you recognize whether these nations are gold producers or not. Australia was clear when it stated it had no real worries about its remaining gold holdings, because of all the proven reserves of gold in the ground, the same ground they own. If Japan were selling gold reserves, this would be something, because the only way they could get more of it would be to exchange something else of value. When you got it resting under the ground, it is no problem to sell what you have in the vault, to be replaced with what is underground later.

Just my two cents, and my first post


(Tue Jan 12 1999 22:53 - ID#219363)
Investor Question
I'm working with some folks on another start-up and had an off-topic question for you investors out there. What do you look for in a new IPO ? Further, what kinds of things appeal to you in a stock over the long term ? I don't mean things like huge profit growth, everyone wants that. I mean things like stock splits, reverse splits, lots of press, very little press, what do you like to see as far as investor relations is concerned ? Do you like to have someone you can call at any time to talk to about your investment ? Would you want an annual meeting held in major cities that explained what the companies plans are for the coming year, would you attend such a meeting ? What kind of relationship do you like to have with a company you're invested in ? Are there companies out there that you're very impressed with, companies you think would make a good model as far as investor relations is concerned ? Do you like to be wined and dined, or do you think it's a waste of valuable money ? Would you like the occasional perk for being an investor with a company, or are you happy with a big dividend payment ? What kind of things turn you on, and what turns you off ? High on my list is the honest to God truth, that is, I think a company does okay if it just says what the real deal is instead of covering things up and trying to sugar coat it, do you agree ? Would you rather see a company that would turn a huge profit in a short amount of time, or a company that ramped up slower and ended up ruling the industry they were moving into ? Do you like to see pretty colors and flashing lights, or do you like the company to save money and give it to you in a brown paper bag ? Very interested in what you think, extremely interested in fact. Also interested in any web sites or books you could point me to that give helpful hints and/or advice to CEO's who have to deal with such issues.

Tantalus Rex
(Tue Jan 12 1999 23:11 - ID#295111)
Spock has no emotions, but Farfel is the REAL McKOY.

Tantalus Rex
(Tue Jan 12 1999 23:11 - ID#295111)
Spock has no emotions, but Farfel is the REAL McKOY.

(Tue Jan 12 1999 23:12 - ID#255226)
Gold Stuff - Fidelity Select gold appears to have double topped at the 15 area, at least short term and gold ran into its downward resistance line at 293 - 295, todays weak showing once again leaves the door open for a move down to 277 -275. I sold my select gold the first hour today and reversed my Feb Gold at 292 and I am now short. If Mar Silver doesn't hold the 5.05 - 5.10 area the next support would be at the 4.90, 4.70 and then 4.40. These numbers are still possible before the final low. My oex puts went into profits today, finally. I'll offset in the morning.

I received several e mails over the weekend. Thanks to all for your words of encouragement.

Heavy Hitter
(Tue Jan 12 1999 23:17 - ID#402188)
Just before Y2K gold tumbles to $250 OZ. in Government's efforts
to keep the lid on the gold market. No one wants to wake up mom
and pop to the bonanza to come in gold and silver a few months
after the year2000. Everyone who invested in gold and silver has given
up by now, but little do the majority know fortunes will be made within the gold and silver market as all who previously betted on the market will
have thrown in the towel only to be eatin by the wolves within months
of a gold bull market that will be the biggest in our lifetimes. No sh.t.
In 15 months from now only those who have a vision will be greeting
the light at the end of the tunnel. Anyone who has half a brain can
cash out by 2003 with 10 times on their money in bullion. Anybodys
guess with gold stocks and numismatics. Probably a minimum of 20
to 100 times on your money. Could be much more. All those trillions
of dollars floating around will run prices into the next universe. Bill
Gates is one of many with many many billions of dollars. IMHO prices
of all real things will go up. The law of nature is getting close to kicking
in. Time to get real while the sheep are eating paper.

Raul Duke
(Tue Jan 12 1999 23:26 - ID#22852)
Its him
Only heavy hitter could use that many words to say nothing, do it in such fractured English, and do it all with a total lack of understanding regarding basic grammar. I know he has been trying to communicate on this site for some time now, but I am always left wondering what the hell he is talking about? I think it is easier to scroll past. I wonder how heavy he is? 280 you think? Maybe 300 lbs? Maybe if he wasn't so heavy he wouldn't spend all his time hitting. Now this post is sounding almost as stupid as his, oh well.

Raul. Duke of Grammar

Oh yeah: There is a gap at 5.05 silver. It will fill in the next couple days.

(Tue Jan 12 1999 23:30 - ID#330280)
APH; Thanks for you inputs...BTW, I finally got Lind-on-line working a few weeks ago.
I was trying to use it at work, and we connect to the web via a proxy
server in a larger office. The network security parameters wouldn't allow
me to start up LOL. To get hooked up I use a laptop w/modem and connect
through an internet service. I'll be saving on quote-line costs now!
Whew!!!! Them minutes were adding up to big charges!
One quick question if you've read this far....
Do you trade T-Bonds, and if so, do you agree that the price has further
DOWN to go, from a technical and/or fundamental aspect?
TIA, Fox-man

Chicken man
(Tue Jan 12 1999 23:32 - ID#341297)
Raul Duke- Welcome to kitco!
Nice post...counterpoint...the gold in those CB's got there by the sweat of the brow of some poor miner...unless it was stolen...witch it more than likely was...if the Ausie bankers can convince those poor old miners to dig some of it out of the hills for nothing they are in good shape...if not, they are going to have to pay the going price on the world market...of course they could print some more $ and try to buy it

Just a thought..Chicken man..

Heavy Hitter
(Tue Jan 12 1999 23:42 - ID#402188)
270 and ripped. Where would you like to meet?

Chicken man
(Tue Jan 12 1999 23:43 - ID#341297)
Slower than molasses in Jan..but sweeter
Patience got the best of me..this gives new meaning to the world wide wait

Goning to the roost...Chicken man..