Date: Tue Jun 10 1997 00:05
Eldorado @the scene>(@the scene):
RJ -- If I may comment! You have been looking only at the time of the 'abberation' of paper. Do you see not further out, or before? How long do you really expect this debt based paper currency system to reign? Perhaps it'll continue forever? RIGHT! The metals have been the ONLY historically correct currency. SO WHAT if the debt based system we have today has distorted that 'equation'. You, apparently, do not see the frailties existent in this system. I will not ask why that should be the case. I will however ask of you what you DO see in the system that might keep it going! IF/when this paper house conmes down, do you not see a value in an easily tradeable commodity? Not everyone is going to want a loaf of bread! Let me place the emphasis on EASILY! And I might add that 'easily' comes from being 'known-as-tradable' Metals are nice in that. They don't require care and they don't require much room. Can you say the same about a cow, or a silo of grain? And everyone won't need your caliber of bullet. The metals are the ONLY logical currency when all else ( paper ) has been found faultful! Without them, society will have a VERY hard time picking its ass off the ground! I'm not saying that should that day come, that having food, guns, ammo, etc won't be most important%2

Date: Tue Jun 10 1997 00:05
ark saltedcore>(saltedcore):
If one can redeem a baggage claim check for luggage what can
a Federal Reserve Note be redeemed for?

Date: Tue Jun 10 1997 00:10
cherokee @edge-of-ionosphere>(@edge-of-ionosphere):
big trader?

not to worry--his hide hangs quite un-ceremoniously next
to those of the skunk and muskrat genre.
the scalp was of the bald variety, and made an arm-pit
warmer for one of earls' squaws!

cherokee!; ) hanger-of-worthless-hides!

Date: Tue Jun 10 1997 00:10
RJ I'm just getting warmed up>(I'm just getting warmed up):
Steve Puetz - Please quote me accurately. I said that Inflation is essentially a twentieth century phenomenon, not just. Comparing todayís global economy with that of China in a bygone era is a non-sequitur. In fact, at no time in history has there been anything remotely resembling the global economy of the 1990s. As for store of value, please refer to my essay or do the math yourself. If your numbers add up differently, please present them. As for independence from monetary promise, you are absolutely correct. Gold definitely has a minor place in ones portfolio. However, for most people, the thinking stops there. Conceding your points of perishability, gold is still only worth what someone will give you for it. Is it not then held hostage to exchange having no fundamental uses of itís own? Can you dig with it? Can you chop with it? Can you bring down a Wildebeest? All the gold in the would wonít buy you glass of water in the Kalahari. The inherent fallacy in gold protecting you in times of economic collapse is plain. As the US economy goes, so goes the world. Who would you have step forth to trade needed commodities for one that has no fundamental use? As for rot, some say that is what has happened to my brain.

Date: Tue Jun 10 1997 00:10
Mooney @Ted>(@Ted):
If gourmet meals, whale-watching, dog walkin', star gazing, boating on the Ocean, boozin', snoozin' and gardening ain't the life of Reilly, ( with occasional letter wriing to friends ) , I don't know what is!

Date: Tue Jun 10 1997 00:11
ET top@mountain>(top@mountain):
just created these charts of the S&P500/Gold ratio and S&P500/Platinum ratio. Now I'm no guru here but the S&P500/pt looks way past it's top. Since the precious metals group seems to move as a 'pack' gold can't be very far behind. In terms of gold the S&P tide seems to be turning.

Any comments

Date: Tue Jun 10 1997 00:15
MR. BEAR @ the cave>(@ the cave):
After reading RJ's articulate and very insightful remarks I find myself speechless for the time being.

Date: Tue Jun 10 1997 00:19
Eldorado @the system>(@the system):
RJ -- Your argument has some merit, but is inherently full of holes! Do you not know that the metals ARE the historical currencies? Do you not know that this debt based pyramid is VERY top heavy? Do you not know that this paper BS is but an aberation? Perhaps you should tell us what you DO know! I know that the metals WILL BE THE common tradeable commodity. Everyone won't need a particular caliber of bullet, a loaf of bread, a cow, or a silo or grain! But THE METALs will BE the common currency to acquire that which one needs. They'll be the way society picks its' ass odd the ground! I'm all for having the other basics on hand, but I also call the metals ONE of THOSE BASICS!

Date: Tue Jun 10 1997 00:35
RJ Here we go>(Here we go):
Eldorado - It's a pleasure to have well thought and succinct arguments put forth. So now the time has come to drop the other shoe. I do not believe that the Fat Cats, Industrialists, and bankers will bring a fall. I know this will not sit well with this august group but it needed to be said. It is precisely the mentioned chubby felines that have the most to loose! Will it last forever? The longest culture in history was the Egyptians and they lasted a mere 2000 years. All societies will pass. I do agree that the world today is a house of cards, but it is a house that is in every manís best interest to stand, and no manís to fall. I am however protected against unexpected gusts or the mysterious sirocco that takes our tents before we wake. In the meantime, I will accumulate lots-o-these paper instruments of debt. Amazing as it seems, it was these very same pieces of paper that bought my lunch today, and paid for this computer, and pays the mortgage, and the car, and the gas, andÖÖ. Well, you get the idea. Accumulation of paper today to trade for the commodities of the day and the invest for the future is the wisest way to protect oneself. But accepting you argument, arenít there many other commodities in which more uses could be made? Before I am hammered by the rest ( I knew this would elevate some dander ) , I love gold, I own gold, and as the atheist once said, I donít believe in God, but Iím not going to tell Him that.

Date: Tue Jun 10 1997 00:36
Eldorado @the scene>(@the scene):

Date: Tue Jun 10 1997 00:44
For those of you that haven't figured it out yet, I trade metals for a living. I sell a lot of gold for delivery, but it is those who yearn for profits that receive a majority of my attention.

Date: Tue Jun 10 1997 00:53
A final thought for the evening, As no man is an island, no commodity exists in isolation.

Date: Tue Jun 10 1997 00:55
Westboy @RJ>(@RJ):
RJ: Even though I do not adhere to your viewpoints, nonetheless, I still enjoy reading your posts.

Date: Tue Jun 10 1997 01:11
slick goldbug@windycity>(goldbug@windycity):
RJ.. you mention that you like paper! Well the Germans liked the MARK
post WW-I,they needed millions of marks to buy a loaf of
bread. Also, the Russians and other East European countries who relied
on the Ruble will certainly say different today. The point I want to make, is that the paper currency of a country is only as good as the government printing it. If the government is corrupt and society at large
is defunct, the paper will be worthless and history repeats itself
again and again. Whereas, gold and other commodities have always
carried value, even for Germans and Russians. If you don't believe that
you can always ask them!! Besides,paper can always be called in by
a government and say tomorrow your 100 dollar bill will be a brand new
yellow 1 dollar bill.

Date: Tue Jun 10 1997 01:17
Mike @>(@):
Note: most bankrupts are very satisfied with the bankruptcy laws

Date: Tue Jun 10 1997 01:21
YO Slick - yours in not a new augment. For those with a post apocalypse, down in the bomb shelter, procreating with your cousin mentality, I have no more reply. Can anyone put forth a compelling reason to treat gold for anything other than what it is? I tell you what, if it all fails and you are right, when you hear me pounding at your shelter door, donít let me in......................agggghhhhghghghghhg.......

Date: Tue Jun 10 1997 01:23
Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )

Date: Tue Jun 10 1997 01:35

ET: Assuming the metals do move in a 'pack' - I would reach the same
conclusion. But, I'm not willing to assume that yet.

RJ: non-sequitur? I found sequitur after looking in 4 online dictionaries. Is this the definition you wanted?

Main Entry: se∑qui∑tur
Pronunciation: 'se-kw&-t&r, -tur
Function: noun
Etymology: Latin, it follows, 3d person singular present indicative of sequi to follow --
at SUE
Date: 1836
: the conclusion of an inference

If so, what are you saying?

I just wasted 15 minutes writting a response to RJ's posts - then I
deleted it.

The PL/PA market responsed very well to the increase in margin
requirements today - IMHO. I'm still of the belief that the Russians or
the Tiger fund are not going to sell any white metals at discounts to
today's price. Which means the Dec contracts are really cheap.

Date: Tue Jun 10 1997 01:43
Eldorado @the scene>(@the scene):
RJ -- Whatever a 'Chubby Feline' might be! Man, I HATE metaphorical BS that isn't fairly/universally understandable! And, so what that you've gained some 'property' in paper. Does that answer the questions I've asked? NOT! And you have explained exactly 0% rational in your postings of gold being dead for the rest of the year! Why would one speak thus! Rational is all we ask! Don't mind me if I'm seeming to be a BIT sceptical of your more pronounced announcements of golds 'movements'! Besides, I trade my OWN rules any way. Also, I find the 'pro-creating with your own cousin' mentality type of comment to be more of a 'governmental' type of response than a 'real' trader! Pardon ME if I DON'T TRUST YOU!!!!!

Date: Tue Jun 10 1997 01:53
Lan Man Late Reply>(Late Reply):
Mooney ie COT #'s - They are from Steven Kaplans Gold Mining Outlook page at

Date: Tue Jun 10 1997 01:57
Mike @>(@):
RUSSIAN STOCKPILES: Why would the Russians leave us in the dark if their Pa/pt stockpiles are drawing down to zero? So the price stays low and they can sell even the last ounces cheaply? This is not logical. We should be hearing about the depletion very long in advance to manipulate the price upward.

The only reason I can think of keeping the depletion secret is the desire to borrow against nonexisting stockpiles. Does anyone have any thoughts on this?

Date: Tue Jun 10 1997 02:00
Arctic Spirit>(
Has anyone heard of our now infamous Yellowknife -

'Bre-x Salting Crew' cap?

check it out at:

and let us know what you think.

Date: Tue Jun 10 1997 02:05
RJ: Your essay was topnotch and covered things that needed to be said. Perhaps I missed it but I think you inadvertantly overlooked one important and fundamental element of gold's allure. That is its historical capacity to carry wealth through time.

All of the points you made regarding gold and its relationship to these modern times are true. The evidence is before us and is inescapable. And yet this era of diminished function for the role of gold is still only trading inside the span of one lifetime. As you pointed out, the Egyptians carried on for some 2000 years. We, by contrast, ain't even out of the starting blocks.

Granted, the case for edible commodities and the physical capacity to protect them. Unfortunately, current events speak grimly to the need.

That you would earn your bread and beans via modern instruments of exchange is not unlike those who have only their personal time to offer in exchange. You will share a common problem. That is, how do we lay by our excess now, for a time when we no longer have the capacity for everyday commerce. Just as farmer is unable to rely on his excess production for latter day sustenance, a trader of paper would be equally disadvantaged when considering that longer term imponderable. Obviously, if we are unable to continue to keep the mice out of the grain and inflation out our paper, what is to be done about it?

While your assets are perhaps more manageable than the unconverted assets of a farmer, the end result is still the same. Each left to their own devices would lose value very quickly. At the same time, the skill set required to manage paper assets in the current world and that of tomorrow is probably beyond the capacity of most individuals. If that is a valid assumption; what safeguards would people likely choose as simple, historically effective stores of value. It seems to me that gold and other precious metals are the solution. By so saying, I am not attempting any silly argument that gold is the perfect store. As you have said, the last 20 years would give lie to it.

In order to avoid belaboring the point, gold it seems to me will always fill the need for transporting wealth through time. Given its physical size/unit of value and its universal appeal and acceptance, it has additional appeal as a vehicle for transporting value through distance as well. Refugees are seldom found to be carrying potatoes or dried fish as there primary store of value. Much of it resides in mom's gold jewelry.

Date: Tue Jun 10 1997 02:38
Mike: I agree - it doesn't add up. One alternative explaination to the
loan is the Debeer's example. Russia has alot of dealing with Debeer's -
I think they just signed a diamond contract, late '96 or a couple of
months before they stopped shipping PA. I see alot of simularities
between diamonds and Palladium. Who knows - there is something bigger
going on here. Maybe someone from Debeer's introduced two friends to
each other at one of these meetings. These are really really small
circles of friends. I'll bet the S. African mining crowd it isn't to
different from the texas oil crowd.

Date: Tue Jun 10 1997 02:45
tanami @theunknown>(@theunknown):
Mike, interesting point about the Russians, yeltsin did attempt
to co-opt the stock pile a while back as security for an IMF
loan, which made me think there must be something there, but
now am not so sure, curious lack of public hard info
on level of russian stockpile.

Date: Tue Jun 10 1997 02:47
tanami @platinum>(@platinum):
Mike, interesting point about the Russians, yeltsin did attempt
to co-opt the stock pile a while back as security for an IMF
loan, which made me think there must be something there, but
now am not so sure, curious lack of public hard info
on level of russian stockpile.

Date: Tue Jun 10 1997 06:21
RJ: You're the best thing to happen to this site since I started reading it. You have a reasoned and rational approach and an obvious store of
experience. Please continue your postings. ( I have only one small criticism: your use of it's in place of its. Its is analagous to his and her ( the possessive ) whereas it's means it is. The misuse of it's and its is my pet peeve. )

Date: Tue Jun 10 1997 06:42
TED @capebreton>(@capebreton):
EBN Gold up a nickle and Silver UNCH...Mornin Tort!

Date: Tue Jun 10 1997 06:49
Mike Sheller @RJ>(@RJ):
RJ: You are right. And so is everyone else. In that seeming disparity lies the lure of gold. Human activity leaves much room for gaps and blunders. Your observation no commodity exists in isolation is the key. Gold is thus a primo financial and emotional vehicle for the expression of many factors that, when they converge just so, can offer stupendous profits and enjoyable entertainment. It is not so much the plaything of the stupid and greedy as it is the gamepiece of the intelligent and adventurous of spirit. Hence the dialogue at Kitco, where adventurous, intelligent, spirited people gather 'round the campfire and spin yarns about their gold campaigns, hopes, and dreams. We are all looking for THE moment. We are all aware of the pitfalls, most having been stung heavily by the yellow bees, but back to try again. It is the timing and the observation that makes gold more valuable at times than others. Therein lies the key. I have been in a part of the world where even though bullets were, for a time, king, an ounce of gold could have bought enough stuff based in local debased currency to feed a small village for a week. It has its uses now and then. I know you know this. We enjoy our debates here, but somehow I think we all know that we do this to pass the time. Waiting for the BIG ONE. That's the REAL game. Yes, gold is a beautiful, magical, but sometimes impractical substance. But we find ways to give it a lustre of its own. Besides, a potato would look ludicrous stamped .999 Fine.

Date: Tue Jun 10 1997 06:51
Morning Ted, and Waite! Just a darn minute now, Waite. What about the fact that so many here freely exchange there for their and vice-versa. Can't stand that and yet I've even caught myself doing it from time to time! :- )

Date: Tue Jun 10 1997 06:54
TED @mooney>(@mooney):
Mooney ( 00:10 ) To your list add re-building a house ( improving the real estate value ) ;makin money in that hated stock market and compoundind me money through D.R.I.P'S and yer right on the money...and throw in chainsawin all my heat source every year...Life of Reilly would kill you in two-three days...hahahaha

Date: Tue Jun 10 1997 07:11


Life of Reilly eh!

Hey guy, I had to put up with the blazing 30 degree sunshine yesterday on the Seadoo! That was tough ! I had to lock the cat upstairs before she nearly made out with my slippers which were on my feet at the time! That was tough ! I had to go and take a baby catfish off my fishing hook since it had to go back in the river ! That was tough ! I had to eat 3 times ( twice with desert ) and absorb a $502 dollar loss yesterday ! That was tough ! So what did you do .... besides drive around the city in your air-conditioned car and visit people for tea in their air-conditioned homes and then come home and have a cool one because you worked sooooo hard? I tell you, I think the pots calling the kettle black a bit too much today !!! ( :- ) )

TED : send me an air-mail ..... OK above...

Date: Tue Jun 10 1997 07:21
Duncan To : Waite (6:21)>(To : Waite (6:21)):
Good one Waite - your'e gonna have a field day at this site!

Date: Tue Jun 10 1997 07:23
Goldbug23 @Ingotwetrust>(@Ingotwetrust):
RJ: Your discourse on why gold is generally NG for much of anything is interesting. But the dollars I saved in 1933 ( I was 7 and caught nightcrawlers and sold them to fishermen 20 for a nickel ) now have less than 10 cents in comparitive purchasing power. The Double Eagle my Dad gave me that year rather than turn it in ( yes that made him a criminal! ) has in fact more purchasing power now than it did then. You may say this is a short term phenom. Perhaps. But I still like to have a few gold coins and some gold stocks in my pantry. And while I have not made a fortune in gold stocks since I started buying them in 1959 I have held my own in the purchasing power arena with them. Short term thinking you may say? Perhaps. But then aren't we all short term in the total scheme of things?

Date: Tue Jun 10 1997 07:27
WW @New England>(@New England):
RJ: It is true economies change and the global economy of the 1990s may have some unique characteristics. Nevertheless, it is human psychology which ultimately drives markets. Currently, the expectation for metals is extremely low and for financials it is nirvana. I would posit it is these extremes in sentiment which give rise to reversal. Everyone is in financials and thus are potential sellers when there is disappointment conversely, everyone is negative and short metals thus giving great upward potential. When the horse gets out of the barn on either of these perceptions ,headlines and conventional wisdom will quickly change. This is the reason for the manipulation as the big financial people who have an interest in the current ponzi scheme know all too well that news follows price thus they try to keep the horse in the barn ie suppress gold rescue S&P when necessary. Their efforts will make the natural forces much more ferocious once they take over. Once it does you will soon here comments like risky overvalued blue chips risky junk bonds and liquid and safe metals. Once these headlines start pouring forth it will be very difficult for the boys to reverse the capital flow given the extreme situation that has been created. Platinum may be a warning sign.
The current arguments against gold are merely the product of its poor and contrived price performance and the negative sentiment trying to make sense of that which does not really make sense.

Date: Tue Jun 10 1997 07:48
Front: Ya got a missile coomin yer way!...Mooney: We're on to yer games and why don't you get a real JOB and stop this charade that you actually WORK...How would you cope if you had to sit on the deck lookin at the ocean?...Could you deal with that Mooney? I don't think so as it's very high-stress and I'm beginning to think I need a VACATION!

Date: Tue Jun 10 1997 07:50
Rhodium story;

Russian gold story;

PGM story;

Date: Tue Jun 10 1997 07:51
TED @capebreton>(@capebreton):
Tort: Where the hell is our mornin joke...EBN Gold up a dime...

Date: Tue Jun 10 1997 07:52
Waite - Re: your comment to RJ that, You have a reasoned and rational approach and an obvious store of experience.
I would agree that RJ makes a valuable contribution to the site and that he ( for the most part ) tries to have a reasoned and rational approach and that, as many others also, he more than likely has a valuable store of experience. Where your statement ( and his reasoning ) falls apart though, is that I don't see any evidence that he has either first-hand knowledge ( read- experience ) or any historical knowledge of the final phase of the degrading of fiat currencies. His sharp retort to slick's 1:11 which he posted @ 1:21 seems to imply that the only way the economy can break down is through nuclear war or some such war-like 'apocalypse'. This 'reasoned' approach is not taking into account that economies can 'melt-down' for many other man-made reasons besides the advent of world war or environmental disaster. Modern ( post-1900 ) history is rife with examples of hyper-inflation. The last massive increase in the price of Gold and Silver ( 1980 ) was not due to physical shortage but due to the fact that a financial panic hit the Western world and the masses started to worry about the actual future value of the 'greenback'. For a brief period, people were glued to their T.V.'s watching the nightly news showing line-ups of people, at banks around the world, tring desperately to get Gold for their paper 'money'. Yes, kiddies, we did almost have a total financial melt-down in our lifetime and it may happen again. I'm not saying that this is a scenario that is to be fervently prayed for, but it is historical fact and to discount it offhand by degrading the messanger of such truths is not an entirely 'reasoned' and 'well-balanced' ( read- experienced ) approach.

Date: Tue Jun 10 1997 07:53
Latest issue of Nat. Review has an article by J. Dizard. He likes Plat and Pall, says SWC is in process of management change. Probably why SWC has had such a poor response to recent plat./pall rise. PDG is now being touted by another mkt. letter writer, prior to this he was neg. on gold.

Date: Tue Jun 10 1997 07:55
Mooney @Ted>(@Ted):
That IS the morning joke, Ted - Gold up a Dime!

Date: Tue Jun 10 1997 07:58
Tortfeasor Joke of the morning>(Joke of the morning):
Morning Ted and all. The market appear rather lackluster this morning. It might be a good time to short platinum before it retrenches after its heavy gains. Russia is going to come out and sell when the price is right and the price will go down big time. Now for the joke of the morning.

Four international businessmen are on the golf course, and there is a
ringing sound. The Canadian guy goes to his golf bag, pulls out his cellular phone and talks for a minute with his office. Very important to be in touch these days, he says. Yes, his golfing partners agree.

A little bit later another, a different ring is heard, and the
American golfer holds his hand up to his head ( as if to imitate talking
on the phone ) and starts talking in what is clearly a real conversation.

After the call he explains to his friends, It's the very latest in
cellular technology--a speaker is attached to my thumb, and a microphone to my pinky. You can't even tell I have it on.

A couple of holes later, a different, muted, ringing sound is
heard, and the German businessman in the foursome stands erect and begins
talking, again an obviously real conversation. When finished he explains,
This really is the latest in cellular technology. A speaker is implanted in my ear, and a microphone in the backside of a front tooth. I just stand at attention to talk.

Suitably impressed, the foursome continues their game. Suddenly, the
Japanese golfer excuses himself and ducks behind a bush. After he doesn't re-appear for several minutes, the American golfer goes to make sure he is okay. He finds him behind the bushes squatting down with his pants around his ankles.

Is everything okay? asks the American.

Yes, replies the Japanese golfer, If you could just give me a
minute here, I'm expecting a fax...

Date: Tue Jun 10 1997 08:00
Mooney @Ted>(@Ted):
Ted@7:48 - Been There, Done That. Lived on Vancouver Island for seven years! Can't wait to go back.

Date: Tue Jun 10 1997 08:00
WW @NewEngland>(@NewEngland):
Economies just dont collapse and when they do, normally few see it coming. Collapses by definition arise from excesses in which most are participating stk mkt/excess credit etc.. Ergo few see the collapse or want to see the collapse coming. To illustrate how twisted the excesses can become I saw the comment today that excessive bankruptcies ( admittedly caused for the most part by job loss or pay cuts ) are a sign of a strong economy. With stks rising and the happy talk on TV what other explanation could there be. NEWS follows price. We will see what they say when the stk mkt falls. I bet the view will be different.

Date: Tue Jun 10 1997 08:08
Front @upandatum>(@upandatum):


Hi again... Forgot to mention that today is going to be very stressful. I have to drive my 4x4 motorcycle through the bushes today. It's tough ducking all those branches and stopping to watch the deer play. Then it's off shopping with my wife. NOW THATS TOUGH ! Then I have to pick up my kid from baseball practice and inbetween all those stresses, watch the market to decide if RJ may be right or not !!! Tough day ahead lad !!!

RJ: Just a short note saying thanks for the topic. My problem is where you asked if I'd rather have the money or the gold at $430~. You went on to say that the value of the money had dropped to half. But the Gold had only dropped to $340. Doesn't that make gold a better holder of value as Earl mentionned? Just a thought ....

Off to the wars ....


Date: Tue Jun 10 1997 08:09
panda @daffy-nitions>(@daffy-nitions):
An article I read on Saturday in the IBD stated that the rise in the long bonds may be a sign of 'cognitive dissonance'. A psychological term. I prefer the word 'absurd', it has the same meaning. In other words, 'acting contrary to your belief', and knowing better.....

Date: Tue Jun 10 1997 08:23
TED @lifeofreilly>(@lifeofreilly):
Front: ya gotta slow down and relax....cut back on the schedule a bit! Did ya get me e-mail....Tort:Will be checkin the headlines fer murdered commodities brokers...gotta run and return roto-tiller and then maybe stop at the CASINO fer some real gambling...and Mooney doesn't think this is WORK! Grow up Mooney and get TO WORK!

Date: Tue Jun 10 1997 08:36
Front - Watch you don't hit no moose or flag-bearers as you whiz through the muskeg!
WW - I really can't tell you how much better I like your posts lately!
Ted - Walk-in, place $100 on number 23 immediately. When you collect the $3,500.00, go to the travel agency and buy a round ticket Toronto/ Sidney. Go to post office and mail it to me. I'll bring my metal detector and swimming trunks and we'll find that damn gold on Scaterie!

Date: Tue Jun 10 1997 08:36
LB to Miro>(to Miro):
Thanks for your post. Since the y2k problem is imminent, immediate and serious, I am surprised at the lack of concern.

Date: Tue Jun 10 1997 08:41
panda @>(@):
Dollar moving up slightly, a flight to quality? Fund managers selling european funds because of English and French election results. Meanwhile the Russians are doing their impersonation of the Three Stooges regarding the PGMs, Now everybody point to their left! Not that left, your other left! ( slap! )

Now for our Three Stooges, wonder how the May jobs number will be revised? By a factor of 2+, again? Don't worry, be happy! Buy tech stocks! ;- ) )

Date: Tue Jun 10 1997 08:57
Blonde @NYC>(@NYC):
Tortfeasor, maybe you should find a blonde commodity broker! Just a thought. As your blonde friend, I think I suggested cash some time ago.

Date: Tue Jun 10 1997 09:00
Fundy Tide>(Tide):
RJ: You made the point I have been trying to make and you did it in one post. How about a couple of hundred words on the cause of the German inflation of the '20s. The famous wheel barrel of money for a loaf of bread.

Date: Tue Jun 10 1997 09:06
Platinum weakening today?
Never make forecasts, especially about the future. ---Samuel Goldwyn
Oh-Oh! Time to buy some puts and calls? - Alan Greenspan is giving a speech tonight!
After reading Oracle of Alberta's 'threads' yesterday at Gold Eagle, I had a thought that I should share. It was about two weeks ago that someone here had a message from their large overseas dealer friend that there would be a lot of selling of gold at $355. Yesterday my Friedberg's broker suggested that that company ( large commodity broker ) would not be reversing their short position unless Aug. Gold broke $355. Also remember Glenn's sea of hands at certain price points? Gold barely budged ( even in a small show of sympathy ) with the massive Platinum move. That seemed strange to me. Has someone a stranglehold on the market? Where's that damned Shadow when you need him most?

Date: Tue Jun 10 1997 09:08
Fundy Tide>(Tide):
Vronsky: The discussion was about the US gov holding the price of gold at $20 during the 1929-1935 depression and thereby hold up the gold mining shares as well. Now Speed wants some proof that this actually happened.

Date: Tue Jun 10 1997 09:13
JohnC @Sunny Brisbane>(@Sunny Brisbane):
To D.A. or anyone else keeping a close eye on Gold Forwards,

I picked up the following comment on a Friday Gold market summary and wondered if you or other learned contributors' might know what this Macquarie Bank commentator is alluding to:
Yesterday's huge borrowing in the gold forwards was believed to have been on behalf of a U.S. based house who was defensively covering gold forward positions as a result of difficulties stemming
from its palladium trading.
It is taken from

Perhaps this might be a sign that metal loan problems in PL and PA are starting to filter over into Gold as Ted Butler is expecting.

I would welcome any info on Gold forwards starting to be covered.
Happy Trading JC

Date: Tue Jun 10 1997 09:15
panda @?>(@?):
Fundy -- Didn't they ( government ) devalue to $35/oz in 1933?

Date: Tue Jun 10 1997 09:23
ross ross@canada>(ross@canada):
fyi -interesting artical

Date: Tue Jun 10 1997 09:32
ross xxxx>(xxxx):
apologies try
it is the artical on China & Oil

Date: Tue Jun 10 1997 09:37
ross sorry>(sorry):

Date: Tue Jun 10 1997 09:38
Blonde, good to see you back. I thought maybe you had washed out in the tide. Tell me more about the advantages of a blonde broker. Its a given that I can't do much worse than I have been doing lately. Just as I thought platinum and paladium regrouping at a lower price. Do you see these metal continuing an upward spiral after this retrenchment?

Date: Tue Jun 10 1997 10:05
FUNDY & SPEED: I think you will find most of your answers by clicking the black banner with gold mask entitled: HISTORY OF GOLD on the Gold Digest page:

Date: Tue Jun 10 1997 10:14
George S. Cole>(
Gold stocks not doing well this morning; skepticism over yesterday's rally was justified.

WW: Amen! The current huge overvaluation in financial assets and undervaluation of the metals virtually guarantee that the inevitable reversals will be much stronger than most anticipate.

Date: Tue Jun 10 1997 10:20
Eldorado - NO NEED TO SHOUT! WE ARE ALL GENTLEMEN HERE. In reply to your response to my recent treatise on gold:

The issue of trust has been raised. Since nothing I say or do can possibly affect you, nor do I wish to change your mind, nor are you a client of mine, I fail to see how trust is an issue. My usual response to paranoia is to stand on your left, reach around your back, and tap your right shoulder. As for chubby feline, please read the sentence regarding fat cats just prior to the offending reference. I recognize that there is an entire sentence between these two references. Is short term memory a problem here? I do admit the second reference was a bit lame, but I like to play with words and sometimes ignore my better instincts. As for not yet responding to your request for explanation of my reasons to expect lackluster performance for gold this year, did you not read my 23:23? I apologize for not adhering to your timetable, but the year is less than half over, is a few days too long? You are nothing if not passionate.

Date: Tue Jun 10 1997 10:22
RJ No time now.>(No time now.):
I'll respond to other comments later, I've got metals to trade.

Date: Tue Jun 10 1997 10:26
Waite - Its a wonderful day in the neighborhood. Its nice to be appreciated. OH, my! Iím going to be late! Its time to go!

Date: Tue Jun 10 1997 10:30
Tortfeasor Platinum>(Platinum):
Platinum getting knocked out of bed this morning. Maybe gold can move in an take its place on the next move up.

Date: Tue Jun 10 1997 10:32
miro Y2K cost must be expensed quarterly>(Y2K cost must be expensed quarterly):
Steve: Yes the cost will be tremendous for both - correcting the problem
and conducting the business and fight legal battles in the post
year 2000 market.

In early July 1996 the standards-and-practices-setting Financial
Accounting Standards Board ( FASB ) ruled that companies cannot amortize
Yr2k work as an extraordinary capital expense but must deduct from
earnings on a quarterly basis as the work is done. Other financial and
accounting associations have agreed with the FASB, and the Federal
Financial Institutions Examination Council ( FFIEC ) has issued its own
set of directives.

Reasoning is ( and I believe rightly so ) that the Y2K correction does not
add any new functionality or value to company books - you get the same
system ( except that it may work past year 2000 ) .
Whatís even more depressing is that many companies do not even know about
it and are early in a process of estimating how much it will cost to
correct the problem. This means they will hand a very unpleasant
surprise package to board of directors and company shareholders when they
have all numbers in place.

Date: Tue Jun 10 1997 10:39
Steve (Perth - Western Australia)>(
Have just been watching a PBS ( US ) TV show here in Australia on the US Stock Market. After realising that some of the US stock/mutual fund holders have got virtually ALL of their funds invested in shares, for the long term, a great chilling fear has crept over me. One lady who was interviewed didn't even know what stocks she was in! ( not to mention she was a very DUMB blonde ) . The dumb husband has just let her do it, because they need to make some fast money. God help us!!!! The fever is nowhere as great here as in the US. Time to watch out!!!!

Date: Tue Jun 10 1997 10:46
D.A. curiouser.and.curiouser>(curiouser.and.curiouser):

That lease rates have jumped for gold and silver based upon the action in Pa and Pl is not that surprising. I think that a lot of people are squaring up positions so as not to be caught by any big moves. This may involve getting the herd back inside the barn and thus the physical tightness in the markets.

On the topic of Pa and Pl. I am more familiar with the action in the Pa market because I have been intimately involved with it over the last several nights. The current selling in both metals is coming out of one of the big US trade houses. This selling was advertised up front, so my belief is that it is a play to shake some longs. I don't think anything at all has changed on the fundamental field and that is what is driving these markets. I have heard some rumors to the effect that Tiger doesn't control nearly as much physical metal as was thought but that they still have substantial paper positions that will come rolling in. If this is true then the situation may actually be more precarious then had been previously thought.

My base assumption with regards to at least the Pa market is that price is going to have to ration supply. We must reach a price that effectively terminates some segment of market demand. I don't know the number but still suspect it is much, much higher. We have sold almost 80% of our long position but that is only because the value of the position grew to such an enormous size relative to the funds that we manage that prudence required its disposal. I would not be surprised if this effect accounted for similar long liquidation.

As I have pointed out before, the pattern in the squeeze markets over the last few years has been and initial spike, followed by a lull, and then a more massive squeeze in the next delivery period. All the signs point to a similar outcome in the Pa market. This would make Sept Pa very attractive.

Date: Tue Jun 10 1997 10:47
cueball What?>(What?):

Bart, I'm going to start posting here if you don't soon administer my
previous e-mails to post on channel 2. Please.

Date: Tue Jun 10 1997 11:05
Steve (Perth - Western Australia)>(
Hmm...Dow Industrials rocketing up tp 7555 ( approx ) , while Dow Utilities down to 219...this continual divergence probably will not hold up. As Richard Russell of CA says, this is a good sign of a bear onset.
In the real world, plenty of rain here tonight, but the farmers here feel there may be a drought in Australia this year. ( El Nino effect again )

Date: Tue Jun 10 1997 11:09
Preacher gold, grain and guns>(gold, grain and guns):
RJ: in your post of 23:23 you stated that Gold is the IDEA of wealth. I quite agree. What you fail to realize is that the only place that this idea has been abandoned is in the western world where people believe that little pieces of paper with pictures of dead guys on them are wealth. The rest of the world ( a few billion people give or take ) still consider gold to be a store of wealth and therefore it is.

You pointed out that gold is at an 18 year low in US$. I say What a deal!. Should I be able to profit short term from that I will. But I will also accumulate that shiny stuff. It is foolish to think that western economic power and values will continue ad infinitum and quite frankly the West has seen its zenith. In twenty years none of the worlds 20 largest cities will be in North America or Europe. So who then will set the standard of what is valuable?

As for me, I will keep my gold, my grain and my gun all close at hand in the coming decade.

Date: Tue Jun 10 1997 11:20
Waite: It's clear and I also plead, mea culpa. Improving communition skills requires conscious effort. Correction with elaboration will be gratefully accepted. Whether on line or off.

Mooney: Misuse of There and their is not the result of ignorance so much as inadvertance IMO.

Date: Tue Jun 10 1997 11:27
Bart Kitner (Kitco)>(
More news about the Russian supply situation at http:///news.platinum.html.

Date: Tue Jun 10 1997 11:27
Arctic Spirit>(
Father's Day is coming up ...

Date: Tue Jun 10 1997 11:35
Specialist @gettin rid of stocks and goin short>(@gettin rid of stocks and goin short):
What do Floor Exchange Specialists do to unload their stock inventory?: RAISE PRICES to stimulate demand. What do they do to accumulate and replenish their inventory: DROP PRICES to encourage public selling.

Only in an investment world would we see prices going up to get rid of inventory rather than the other way around.

Date: Tue Jun 10 1997 12:02
Hello I need assistance! Can any one give me a site where I can get the chart for the Dow for a past period of 10 yrs + ?

Date: Tue Jun 10 1997 12:06
Spud Master taters heading for parachutes & exit door>(taters heading for parachutes & exit door):
Arden, thank you for continuing to post the wharehouse numbers - do you expect they are being cooked yet? Might there be little or no metal there? What do the Pt and Pd wharehouse numbers look like?


Date: Tue Jun 10 1997 12:15
Gery Gerhard.Fuehring@blackbox>(Gerhard.Fuehring@blackbox):
To all. Last week I had to visit a fund managers meeting in Vienna/Austria. I got the opportunity to talk to Trevor Steel. He is the manager of the Mercury Gold and Miningn Fund. As goldfund-manager he's bullish for the goldmarkets ( he was already 12 months ago, when I met him the first time ) , but he did some interesting analysing work:
He compared the performance of gold stocks during the big crash-periods in this century:
In august 1929 Homestake Mining was at 80 USD in June 1932 it was uo 50% and in January 1936 it was up 556 % at 525 USD. In the same Periode the S&P Composite went down 81 % in the first step and 7 years after the crash it still was down 55%.
During the oil crisis in the 70s Homestake made 60 % between January 73 and October 74. The S&P lost 36 %.
After the October-Crash 1987 the gold stocks suffered much more ( -40% ) than the broad market, but they did much better than the S&P about one year before the crash - the went up aprox. 50 % from march to april 87, sthe S&P did almost nothing at the same time. After the crash the bullion price about 10 percent.
At the moment Trevor Steel believes that about 50 % of the world goldmines work without profit. During the first quarter 97 there was the highest demand for gold ever recorded. Total demand in monitored markets was uo 17 % to 770.6 tonnes.
To get a feeling how financials are valued Mercury compared the annual returns of gold, bonds and stocks:
1926 - 1997
Stocks 10,7 % p.a.
Bonds 5,1% p.a.
Gold Bullion 4,2 % p.a.

1980 - 1997
Stocks 17,3 % p.a.
Bonds 12,3 % p.a.
Gold Bullion -2,1 % p.a.

If the world wishes to invest in gold, we'll see a nice squeeze:
The capitalisation of the WORLD Gold Mining-Industrie is around 78 Bio. US$ - IBMs is 80 Bio. US$, Intels 130 Bio. US$.

No chance to be wrong investing in gold.


Date: Tue Jun 10 1997 12:17
Fundy Tide>(Tide):
According to Vronsky's History of Gold the US price was $20.67 until 1934 when it was raised to $35. Interesting the price had been $20.67 for a 100 years. I think this limits the notion that gold holds its value through a depression. It does as long as the US Gov intervenes.

Date: Tue Jun 10 1997 12:26
Novice @Whither the Whites...>(@Whither the Whites...):
Bart: Once again, thanks for providing us with updates on the PGMs... Please keep 'em coming. Bet D.A. is BUSY!!

Date: Tue Jun 10 1997 13:13
GERY: An interesting post. I think perhaps Trevor Steel 'borrowed' the gold stocks 1929-1935 data from a sutdy I did THREE YEARS AGO. You may see entire study at:

Date: Tue Jun 10 1997 13:21
vronsky TREVOR STEEL'S 'STUDY' (1929-1935)>(TREVOR STEEL'S 'STUDY' (1929-1935)):
GERY: An interesting post. I think perhaps Trevor Steel 'borrowed' the gold stocks 1929-1935 data from a sutdy I did THREE YEARS AGO. You may entire study at:

Date: Tue Jun 10 1997 13:22
Mike Sheller It's, its, itz, itts, itss...time for some energy>(It's, its, itz, itts, itss...time for some energy):
Noticed CRUDE OIL & NAT GAS puts running ahead of calls on futures options. This is usually a warm clue to impending price rally. Especially the gas. Just thought the energy traders would be interested. Also, intermediate term price pattern is at support ( give or take a dime or two ) in crude oil on the weekly chart. And last but not least, Mars trines ( 120 degree angle ) NYSE Neptune Thursday & Friday of this week. Could be a minor lift to oil there, but I'm not talking betting the farm.

Date: Tue Jun 10 1997 13:23
vronsky inadvertant double post>(inadvertant double post):
Sorry, computer has hiccups.

Date: Tue Jun 10 1997 13:27
Mike Sheller Theirs, they'res, theres, therz something funny here>(Theirs, they'res, theres, therz something funny here):
vronsky: No inadvertant slip. Just defending your intellectual property. A cyber-freudian slip if you ask me. You are THE gold historian!!! ALL: August gold still needs to break out of short term downtrend to get going. At this point in time & space, the magic number to pass is $348.

Date: Tue Jun 10 1997 13:28
Mike Sheller: Astute and timely comment about CRUDE OIL & NATURAL GAS. The Oil & Gas Index ( XOI ) broke out on friday - suppoting your post. See:

Date: Tue Jun 10 1997 13:30
Fundy Tide>(Tide):
Mooney: I'm in great shape for a low tide. If the recent call for 20,000 an oz comes true I'll be a multimillionaire--like most here. I expect it will be a long time acoming. What is the story with you and the Hepcat? He is blasting you on about 4 different sites.

Date: Tue Jun 10 1997 13:34
yellowdog @option expiration friday>(@option expiration friday):
How many think Friday's metals' option expiration will be anything but dull?

Date: Tue Jun 10 1997 13:45
bw Buy some silver:>(Buy some silver:):
All the elements are in place for an explosive up move in the other white precious metal. It sounds trite, but this could be our last chance below 5.00.

o Bullish consensus at 31% up from 25% several weeks ago. This months worth of consensus is the lowest in many years.

o Commericals covering shorts for the last two months. They now hold one of their smallest short positions in many years. The silver commercials are rarely wrong, sometimes but rarely.

o Open interest low and falling. Watch this one. One day with a 3,000 - 5,000 or so contract drop on rising prices and we are off to the races.

o Other metals heating up. They do often travel in packs.

o DA says dont be short.

o Sentiment so rotten you feel like giving away all metals. Dont even bother selling it. Give it away.

o Paper is where its at. Stocks gain 120 billion on a fair day. Everyone is buying paper, nobody buys metals.

o My wife said I could buy some more if I get her a gold bracelet. You can always use more gold.

Date: Tue Jun 10 1997 13:54
panda @>(@):
Another PL/PA story...

Date: Tue Jun 10 1997 13:55
Just as a voice of warning---don't buy platinum future options. Friday I bought 440 put options when platinum was at 470 an ounce. I just sold the option today when platinum was at 436. Because of the spread and the thin market I managed to lose money on what seemed like a sweet deal and a big profit. Ladies and genetlement beware and learn from the screwee on that deal.

Date: Tue Jun 10 1997 14:02
panda @>(@):
Tortfeasor -- Read my 13:54...

Date: Tue Jun 10 1997 14:16
Panda: Thank you for high-lighting the yahoo stories each morning.

Regarding the last one: ~Anglo American Platinum Corp Ltd saw the
Russian stockpiles have been depleted. I wonder if they know this
or they think it?

Date: Tue Jun 10 1997 14:22
panda @>(@):
Tortfeasor -- Don't misunderstand.... The PA/PL situation is far from 'done'. IMO, it would be 'nice' if it looked that way. Too many people with 'exposed' posteriors. Anything can and will happen, especially in markets as 'thin' as these are! Rhodium is hopping to!

kuton -- Your welcome!

Date: Tue Jun 10 1997 14:26
GFD Thoughts>(Thoughts):
Earl@21:49, Eldorado@22:07 - I suspect the real significance of Big Trader and Ted Butler's obervations is that the true supply/demand picture is very clouded with all this paper flying around. There is no way of knowing where everyone is exactly becase of all this forward selling and gold leasing.

While a lot of gold mines would be loosing money at these price levels they all seem to be living off of forward sales in any case. Mining is becoming a means of fulfilling ones contractual obligations. It would appear that mines make their money ( like everyone else ) on the trading desk. Actually hauling rock out of the ground and extracting gold seems to be something one does to keep the lawyers happy.

The issue here is how does one price gold mining companies and the underlying metal. Should one analyse ABX like Goldman Sachs? If so where are the relevant numbers? What is ABX's portfolio risk? Is gold simply now a financial construct like a repo or a spread

Perhaps it is old fashioned to look a mining companies cost of recovery but rather look at it's cost of meeting obligations. Why should it mine when it can borrow more cheaply Why should it borrow when it can cover it's forward sales with an option - matching paper with paper

Bullion market Isn't that next door to the buggy whip museum

Date: Tue Jun 10 1997 15:02
Byron @ The Public Library>(@ The Public Library):
To Kitco Teckies:

Deaner's Prudent Trader page with its analysis of the XAU and Gold has some interesting WEEKLY charts and commentary on the XAU and gold. Take a look:

Date: Tue Jun 10 1997 15:23
Vieserre Why Invest in Gold>(Why Invest in Gold):
RJ's recent thought-provoking posts have indeed reached their stated goal of inviting discourse, and I would like to add my comments in continuation of that theme.

What is gold. If it is merely a commodity, then it should only react to supply and demand for jewelery and industrial use. And it should be traded accordingly. And, as available supply far exceeds demand for that purpose, it is axiomatically a poor investment as RJ has stated. The supply/demand characterists for the use of gold as a commodity is also the reason in my view that gold has never responded well in price rising from jewelery demand, as evidenced by the present price. Gold's price is more responsive to its value as money, as discussed below. Indeed, if gold's price were predicated on jewelery demand, it would not serve well as an economic indicator, which is still being relied on today by some economists. This is why I believe those who rely on present jewelery demand as the reason for gold to rise are wide of the mark, and because they cannot otherwise explain the failure of gold to rise because of such usage, look for bank conspiracies, government intervention, producer hedging, gold carry trade and other such illusory scapegoats for the failure.

But imporantly, gold is just not a commodity, it is also money. Gold is money not because of government edict, but because it has been uni

Date: Tue Jun 10 1997 15:25
Vieserre Why Invest in Gold>(Why Invest in Gold):
RJ's recent thought-provoking posts have indeed reached their stated goal of inviting discourse, and I would like to add my comments in continuation of that theme.

What is gold. If it is merely a commodity, then it should only react to supply and demand for jewelery and industrial use. And it should be traded accordingly. And, as available supply far exceeds demand for that purpose, it is axiomatically a poor investment as RJ has stated. The supply/demand characterists for the use of gold as a commodity is also the reason in my view that gold has never responded well in price rising from jewelery demand, as evidenced by the present price. Gold's price is more responsive to its value as money, as discussed below. Indeed, if gold's price were predicated on jewelery demand, it would not serve well as an economic indicator, which is still being relied on today by some economists. This is why I believe those who rely on present jewelery demand as the reason for gold to rise are wide of the mark, and because they cannot otherwise explain the failure of gold to rise because of such usage, look for bank conspiracies, government intervention, producer hedging, gold carry trade and other such illusory scapegoats for the failure.

But imporantly, gold is just not a commodity, it is also money. Gold is money not because of government edict, but because it has been universally accepted as such due to its singular unique suitability as a medium of exchange. No other commodity, or arguably money, comes close to equaling its cumulative desirable characteristics of ease of transport, divisibility, esthetic appeal, indestructibility, global distribution, value retention, multiple of existing stock to new supply, and excellent marginal utility. It is for this reason that gold is still highly prized and almost all gold that has been mined has been retained. Rather than being a barbaric relic of the past, evidence, such as the LBMA turnover and its continued use as a reserve base, suggests that gold does and will continue to serve its role as money for the foreseeable future.

And it is in this more important capacity as money that gold will be sought after or abandoned ( including being added to or subtracted from reserves ) in consideration of actual or perceived economic and political conditions and gold's relative value to other monetary alternatives. And as gold is sought or abandoned, its relative value as money will rise and fall accordingly. And how one perceives the direction of gold value in such a monetary capacity should be the main determinate for one's investment in gold.

Date: Tue Jun 10 1997 15:36
PB somewhere>(somewhere):
RJ, you are undoubtedly a genius. However, gold does have an intrinsic value. I quote from Gem Elixirs and Vibrational Healing, Vol. I by Gurudas:

Heindel said gold symbolizes the universal spirit in its perfect purity. Thus it purifies the dense physical body. Bailey said gold symbolizes our desires in various fields. Cayce said gold rebuilds the nervous system and is good for multiple sclerosis. Steiner said all gold was once part of the sun ether. Gold is extensively used in anthroposophical medicine. It improves circulation and breathing and increases our warmth.... With gold a sense of responsibility and a conscience may develop. There may be a need for gold where there is ego conflict, frustration in life, and one may be overburdened with responsibility. This is also good for the depressed person with much self-reproach and thoughts of suicide. It may also be good for the manic person with megalomaniac tendencies as well as excitation or rage.

What further proof could you want?

Date: Tue Jun 10 1997 15:42
PBR Somewhere Else>(Somewhere Else):

Man, did the gold traders take a day off today or

Date: Tue Jun 10 1997 15:45
Vieserre, RJ, PB et al: ďGold has worked down from Alexanderís time... When something holds good for two thousand years, I do not believe it can be so because of prejudice or mistaken theory.Ē - Bernard Baruch, a 1929 and aftermath winner

Date: Tue Jun 10 1997 15:55
Jack Artic Spirit>(Artic Spirit):

Artic Spirit: How about considering a Bre-X commemorative
coins struck in silver, gold, bronze and pressed wood.
The numbers bought in each of the materials may give an
idea of the Public's sentiment toward precious metals,
mining companies.
A Bre-X salt shaker with the caps of various metals may
also sell well.

Date: Tue Jun 10 1997 16:37
Tortfeasor Platinum>(Platinum):
Panda, thanks for the post. That was pretty brutal today. Never have I thought I was doing so well and have been getting hurt so badly. Is it normal to have a mutual type spread ( bid and ask ) on all the commodities or is it just a platinum thing? Maybe there isn't that much of a spread on the other commodities.

Date: Tue Jun 10 1997 16:37
Glenn AUAG>(AUAG):
Re: PBR - As a matter of fact, YES. I was in copper for most of the day. Copper seems to be breaking out to the up side. I did very well today.

Date: Tue Jun 10 1997 16:57
pedro @ attention>(@ attention):
RJ's challenging essay is just what we gold lemmings need to keep us from going over the edge of our hopes and commitment to gold.Permit me to add some thoughts.
Let's call paper money by it's real handle,CREDIT. As I undeerstand it Money ( which facilitates an otherwise unwieldy barter system ) to fulfill it's role as a medium of exchange and value standard must have some LASTING intrinsic value..a criteria Gold has successfully met for centuries.And the paper issued in it's name brought confidence and DISCIPLINE to the financial system.With the advent of Lord Keynes Deficit spending idea and the severing of the gold standard which followed,that discipline ( if not confidence ) soon began to evaporate in the wake of irresponsible management,Greed, and the usual other human failings.So what started out as a good idea to help solve the problems of the time has now become a bigger problem with the cost of serving mountains of debt ( both public and private ) eating away at the system which immutable laws suggest must eventually crack. The point is that we don't deal in MONEY any more but CREDIT. Money implies value and discipline...Credit has brought abuse, financial game-playing, greed and COMPLACENCY...a malaisive mixture which appears to be spreading to all facets of society. Worse, we have all become slaves to this evil Genie EASY CREDIT..willing or not. And THEY won't fix the system till it breaks...and that it seems will be in the not too distant future. But fix it they will when the time comes and it will have to be done quickly! With a return to value and discipline..a financial system's mainstays. The question is will GOLD have a role?

Date: Tue Jun 10 1997 17:30
Jack pedro>(pedro):

Pedro: Well thought out piece of work. If they let gold
seek its own level as a commodity, that only their lip
service indicates and ban currency derivatives, the pain
caused by a major credit problem would probably be
Such an approach may allow for gold backed currencies in
final case. This would be better than having to protect
ourselves with deadly weapons, or worst, living under
some despotic government.

Date: Tue Jun 10 1997 17:36
Earl @worldaccessnet .com>(@worldaccessnet .com):
Fundy @12:17: Equally important as the govt controlled price of gold during the period in question, is its effect on general prices. Following the post civil war inflation, the US experienced an unprecendented period of price stability. This period of price stability ended with the advent of central banking. In fact, during the last decades of the 19th century, prices even declined.

Getting down to basic cases, we goldbugs hope to get rich somehow, when all we will be doing, if successful, is to counteract the pernicious effects of government. ..... and taking a helluva beating for our trouble.

Date: Tue Jun 10 1997 17:40
Blonde @NYC>(@NYC):
Tort, Pd and Pt are thinly traded markets that are likely very difficult for individual investors to participate in. If you're infected with the metal madness so prevalent here at KITCO, consider stocks. It may be that buy the dips will begin to work for metals. If you're a long term investor, accumulating stocks of companies with good reserves makes sense. Pd and Pt are not well represented in the stock market--Stillwater is probably the only serious one. I'm interested in Phoenix Gold as a result of a recent post here by RSA. It seems likely that Pd and Pt will do well in the next few years,but if you want excitement, go to Las Vegas. If you want to make money, buy the DOW or sell gold calls. That's where the serious money has been made up until now. BTW enough DB jokes already. You're setting a bad example for the kids here.

Date: Tue Jun 10 1997 17:47
GFD @14:26: Good stuff! ..... We really have reached the point of cyber gold. ..... I wonder if cyber PL/PA will produce an equally fine catalytic device. And the roommate will certainly look elegant in a cyber gold bracelet. ...... How 'bout that bw? The perfect inducement for your wife.

Date: Tue Jun 10 1997 18:08
D.A. re.pgms.stocks>(re.pgms.stocks):

I would advise extreme caution with respect to any recomendations by RSA. The person behind this letter has in the past recommended stocks which in my opinion were pure hype plays. I know absolutely zero about the company that is being recommended and do not mean to cast aspersions upon them. For all I know they may be the best thing since sliced bread. If you are going to take a position in the company do your homework well and see if RSA has been paid for promotion either in cash, stock or options.

If you are looking for investment ideas in the PGM's besides Stillwater, there is North American Palladium, a small Canadian Pa producer. Some of the South African co's ( Rustplats, Impala ) also have PGM exposure. John Disney probably can get you started in the regard as he follows the SA mining industry.

Best of Luck.

Date: Tue Jun 10 1997 18:16
Jack: Bre-x salt shaker What a hoot! Great idea.

Date: Tue Jun 10 1997 18:23
Did anyone notice that DKT traded over 200k shares today. By comparison, ABX traded only ~300K shares. .... Is that flea bitten mutt, DKT, rising for real or only looking for a suitable place to expire?

Date: Tue Jun 10 1997 18:26
Glenn @16:37 - Since you are now our BMOC on the floor, please don't forget to let us know when the big day comes when you decide to cover your Gold short position!

Date: Tue Jun 10 1997 18:28
GFD Managed Gold>(Managed Gold):
Vieserre: If you are right in your 15:25 post that for gold to move it must be seen to be a superior monetary investment then expect flat to down gold for an extended period. The CB's have been very active in ensuring that gold looks unattractive in that respect.

Date: Tue Jun 10 1997 18:46
eirc pit-to-pit>(pit-to-pit):
Hey Glenn - what are the limitations ( if any ) imposed by the exchange on a local moving from one pit to another ( like on a slooooow day such as today ) ?

Date: Tue Jun 10 1997 18:54
Fundy @ 13:30 - The 'hepcat' as you call him, managed to almost destroy the chat here at Kitco for a two week period near last Christmas by insulting everybody in sight and using about 15 different handles to do so; eventually Bart and others were debating how to end the insanity by instituting Handle change mechanisms etc. ( all because of one disturbed individual ) . He calmed down for a while but came back in full dementia on kitco 2. Since I was one of his prime targets, ( and sick of his nonsense from previous ) , I tried to tell him to grow up, along with similar comments from others. He has seemed to calm down in the last few days and I hope he stays that way. I did not even want to mention the idiocy any more as he seemed to stop in last few days but your question begged to be answered.

Date: Tue Jun 10 1997 19:03
panda @>(@):
Tortfeasor -- Platinum and palladium are very thin markets compared to most other commodities. When things get 'tense', Bid/Ask tends to get very wide because the people who 'want' the stuff, REALLY want it [look at stocks! :- ) ]. Also, transactions tend to be few because the 'stuff' is unavailable. Thus, rationing by price takes place, and, the brokers, making money on the spread with fewer transactions to be had..... The stuff of thin markets.

Date: Tue Jun 10 1997 19:30
Ww @New Englland>(@New Englland):
The quiet firmness and basing action in the metals is constructive. I am encouraged by failure to break this week even with Friday's weak and thus, normally ominous close. This is a distinct variation from the norm. Failures on fridays are almost always followed by severe pressure through tuesday. That this has not occured, even with weakening platinum, is probably the best signal in a long time.

Further, I sense a belief among the kitcoists to look at and appreciate the gold bear argument ala RJ and the Bear. This is truly a sign of crumbling sentiment.

In April, 1996, in Barron's Commodities Corner Jeff Christian of CPM predicted 8-10 silver by Fall of 1997 based on supply demand. We will see. Though interestingly enough the silver calls are holding up well given the market's current lackluster performance. Could be shorts buying back the calls in anticipation of a rally. FYI The calls holding up well vis a vis market action has been accurate in the past.

Date: Tue Jun 10 1997 19:56
To: eirc - I can trade Gold, Silver and Copper. If I trade any other market I have to hand my order to another broker.

Date: Tue Jun 10 1997 19:56
S&P cash - Today may have been a wave 3 top in SPC. Assumming 1982 started off this Bull market at 88 ( this is an approximation, I don't have the actual low but it's close ) wave I ended in 1987 at 337.90, wave II ended at 216.50 in Oct 1987. Wave III is extended. A common relationship of wave III to wave I when Wave III is extended is I x 2.618 added to the wave II low. That projects a high of 870.70 todays high was 870.05. I bought S&P puts today looking for a wave IV correction to begin.

Date: Tue Jun 10 1997 20:05
TED @lifeofreilly>(@lifeofreilly):
Mooney: I suppose you think returning the roto-tiller, stopping in at the Casino and planting more of the crops is not work....I am beat and really need a vacation from this rat-race as you can only do so much...and by the way Mooney, the Hamilton Bulldogs made a third period comeback against the Hershey Bears last night to pull out a thrilling 2-1 victory and now trail Hershey 2-1 in games but the next game is in Hamilton...This is for the CALDER CUP ...Mooney!

Date: Tue Jun 10 1997 20:05
Ww - Re: Call prices - Call prices have NOTHING to do with whether traders are bullish or bearish. They have everything to do with: The price of the underling contract ( In this case the price of silver ) , the current volitility levels ( Which affects call and put prices equally ) , and the amount of time until expiration. Stock options also take into account interest rates and dividend payments. For the record I should also mention that option prices can be different if you have an american style option or an european option. An american style option can be exerciased at any time before expiration and an european option can only be exercised on the day of expiration. All options traded in the US that I know of are American style.

Date: Tue Jun 10 1997 20:11
APH: How do you see wave 4 in terms of time and price. Even more important, how do you view the final leg up to the mother of all tops? Feel comfortable projecting time and price to the top?

Date: Tue Jun 10 1997 20:17
vronsky A Chicken in Every Speculator's Pot by Michael Belkins - Strategic Investment>(A Chicken in Every Speculator's Pot by Michael Belkins - Strategic Investment):
Globally acclaimed Analyst sees ďGold skyrocketing when leveraged players are forced to buy back their forward sales. Margin calls will cause price to feed on itself higher. See Editorials:

Date: Tue Jun 10 1997 20:39
TED @capebreton>(@capebreton):
EBN Gold down .45 and Silver down 1 cent...Front:Ya got yer answer in the mail box...Novice: Great e-mail and tired from doin nothin today and will be back at ya tomorrow Maritimer....Mooney: Get to work!

Date: Tue Jun 10 1997 20:47
Eldont @paperhanger>(@paperhanger):
Eldont: Why don't you cut back on the toilet paper and buy some IBM!HI to the Duke of Earl!hahaha

Date: Tue Jun 10 1997 20:51
Steve Puetz>(
WW: Good comment @ 8:00 a.m.

Date: Tue Jun 10 1997 20:51
Duke of Earl @eldont>(@eldont):
Eldont: What in the world are you talking about? IMHO this is crazy!

Date: Tue Jun 10 1997 20:57
Steve Puetz>(
Aurator: You ask: Why no dry powder? I recommended 60% silver, 36% gold, and 4% S&P puts. That IS 96% dry powder!! Gold and silver are the ultimate liquidity -- cold, hard cash. In the old days, investors went to goldsmiths, banks, etc. to convert their paper to gold -- that was an act of getting liquid. Today, in the era of fiat currencies, the act of moving from paper to precious metals is the same process of getting liquid. I'm recommending investors get highly liquid. That's why I recommend 96% of invesment funds be held in gold and silver coins.

Date: Tue Jun 10 1997 20:58
TED @vieserre>(@vieserre):
Vieserre: WELCOME BACK!....again...

Date: Tue Jun 10 1997 21:07
Kid Silver _>(_):
Steve Puetz - Along with gold and silver coin. What else should
we stock up on for the coming crash?

What will happen to real estate prices durng this period?

Date: Tue Jun 10 1997 21:08
D.A. re.options>(re.options):

Volatility need not effect puts and calls symetrically. There are always volatility skews across the spectrum of strikes. If you look at silver for instance you will find that the far out of the money calls have a higher implied vol than the equidistant out of the money puts. I have looked to see if volatility skews can be used to predict action in the underlying but so far have not found anything too exciting.

Date: Tue Jun 10 1997 21:12
Steve Puetz>(
RJ: You seemed to have caused a stir. I agree, logic and reason are the only tools available to improve one's condition. However, you then imply that investors heavily into gold are paronoid. You use what Ayn Rand called the Argument from Intimidation. Read chapter 19 of The Virtue of Selfiness by Ayn Rand. Rand states,There is a certain type of argument which, in fact, is not an argument at all, but a means of forestalling debate and extorting an opponent's agreement with one's undiscussed notions. It is a method od bypassing logic by means of psychological pressure... She goes on to state that people who use name-calling in an arguement usually do so because they are losing the arguement. They resort to name-calling in a last-ditch attempt to psycholigically break their opponent. I have learned to recognize this technique, and don't fall for it.

The true point of the debate in paper is TRUST. You may have faith and trust in paper, but I don't. My question to you is: Why do you trust paper so much? The history of monetary-receipts, credit-paper, and fiat currency is one of flaggart broken promises. This is where the debate must be centered. I for one recommend investors get liquid. Get virtually all of your assets into gold and silver coins.

Date: Tue Jun 10 1997 21:13
Fundy Tide>(Tide):
Earle re: 17:36. I think you have summed it up. In the end it will be a precious few who beat the system.

Date: Tue Jun 10 1997 21:17
panda @>(@):

I love the comment about not being short platinum. :- ) )

Date: Tue Jun 10 1997 21:24
Steve Puetz>(
Vieserre: Good comment @ 15:23

Pedro: Excellent prose @ 16:57

Date: Tue Jun 10 1997 21:25
Auric Short Story>(Short Story):

Panda: Liked the quote. It is dangerous to be
short the PGM's without the metal. A lesson the
gold market may learn as well.

Date: Tue Jun 10 1997 21:27
Steve Puetz>(
Kid Silver: Real Estate is leveraged -- just like financial assets. Residential mortgage debt is at a record high of 40% of the market-value of all homes in the U.S. That's nearly 3 times as high as 1929.

Date: Tue Jun 10 1997 21:34
APH ''''''''''''''''''''''''''''''>(''''''''''''''''''''''''''''''):
Earl - This is pure guess work at this time, but here goes. If 870.05 turns out to be the Wave III top, Wave IV would have a target of 480 near the end of 1998 or early 1999. This would be a 50% correction of the entire move and put it in contact with the upward 2x1 Gann line from the 1982 low on a monthly cash chart. This same line held the 1987 and 1991 corrections. Late 1998 would coincide with the very realible 4 year cycle lows in the stock market. Of course the correction won't go straight down but will be filled with powerful rallies. If Wave IV ends at 480 Wave V will have a wide target range between 970 and 1250. A 1250 S&P would equal a Dow of 11,000.

Date: Tue Jun 10 1997 21:40
Steve Puetz -- I read a story on Yahoo! today on the INCREASING bankruptcy rate. If you think 1996 was high, 1997 should top it easily. The average chapter 7 filer earned $20,000/year and carried $17,000 debit on their credit card when filing for bankruptcy. What's wrong with this picture? Who was dumber, debtor or lender? After some cogitating, perhaps the question should be, Who is smarter? :- ) )

Date: Tue Jun 10 1997 21:45
panda @>(@):
APH -- The Dow is going to infinity, I know. My Index fund investing co-workers tell me this all the time, and they know! :- ) )

Date: Tue Jun 10 1997 21:47
panda @>(@):
New Fifty Dollar bills to be unveiled AG and RR on Thursday. :- )

Date: Tue Jun 10 1997 21:51
panda @>(@):
Hmmm, I think I'll buy some Japanese Yen with my new fifties.. :- ) )

Date: Tue Jun 10 1997 21:52
PB & THE REST - I had no idea! I think I may finally be seeing the light about gold....... Sun ether you say Most enjoyable of all is that apparently some have not lost their sense of humor. For those that have taken offense at my occasional sardonic tone, please remember, the sport is in the debate. I do have a nasty habit of indulging in a bit of poking and prodding to provoke response, but I donít take myself as seriously as some others do. It also seems that some read my words though the tint of their own belief systems. My words mean what they say. There have been responses that speak of my implications. I think you all will agree that I tend not to imply when I can just as easily be bold and direct. All said and done, can we share opinions and still have fun?

Date: Tue Jun 10 1997 21:53
Vieserre home>(home):

Date: Tue Jun 10 1997 21:58
Vieserre home>(home):
Steve: Glad to see you have joined the forum. Your erudite posts are intellectually stiumulating and educationally beneficial. I look forward to discourse with you on them from time to time.

Date: Tue Jun 10 1997 22:02
Mike Sheller @Wave>(@Wave):
APH: If you're referring to gold's 1979/80 prior peak, that was the end of Wave 1 of a 5 wave monster bull begun in 1934. Gold is in a 150 or more year bull market. The action since '80 has been wave 2, and is a correction. March '85 saw the bottom at 285, and unless gold breaks that low, we are basing for the next leg up. That will begin at the end of '97/turn of '98. In the next century, gold will be in the thousands of dollars per ounce.

Date: Tue Jun 10 1997 22:07
Mike Sheller I like my Mumbo JUMBO>(I like my Mumbo JUMBO):
PB: Were you quoting ( or should I say paraphrasing ) Alice Bailey? AWWRRIIIIGGHHHTTT! You speak my language, sir ( or Madam, as the case may be ) . RJ: Sharing opinions is exactly HOW we have fun! Gracias.

Date: Tue Jun 10 1997 22:10
NJ dollar>(dollar):
Dropping again

Date: Tue Jun 10 1997 22:31
APH ------------------------------>(------------------------------):
Mark Sheller - We were talking about cash S&P.

Date: Tue Jun 10 1997 22:38
RJ More Explanations>(More Explanations):
For those that have misunderstood or misapplied my use of trust and paranoia, These were used in direct response to:

Date: Tue Jun 10 1997 01:43
Eldorado ( @the scene ) :
.....Also, I find the 'pro-creating with your own cousin' mentality type of comment to be more of a 'governmental' type of response than a 'real' trader! Pardon ME if I DON'T TRUST YOU!!!!!

Does anyone else smell a bit of paranoia here? Besides I thought the procreating line was kindaí funny myself. Slick - didnít mean to offend.

Eldorado - they really are watching you........

Date: Tue Jun 10 1997 22:43
Steve Puetz>(
Panda: Great comment @ 21:40. I had to laugh. But,I really do think it's the debtors that are smarter. My daughter says her college-age friends know of lots of students who get as many credit cards as they can , max-out on them, knowing all along they will declare bankruptcy when they have no credit left.

Date: Tue Jun 10 1997 22:46
Byron @ Falling Dollar:>(@ Falling Dollar:):
NJ: Ebn site also show $$ getting pounded ( or should I say yen-ded ) .

Date: Tue Jun 10 1997 22:50
Steve Puetz>(
RJ: No need to explain any more. I misunderstood what you were referring to when you were talking about trust. I assumed you were talking about TRUST you had in financial-paper. It appears you weren't.

Date: Tue Jun 10 1997 22:50
Auric Suggestion>(Suggestion):

I would like to see a real debate about this whole
gold question. Perhaps Ted Butler and RJ could have
an exchange of views either here or some other forum
such as at Vronsky's site. I think it would be
interesting and educational.

Date: Tue Jun 10 1997 22:55
Spud Master - thanks for your provocation. Apparantly Nymex does not give out numbers for warehouse stocks for platinum or palladium. At least I could not find them.

Comex eligible gold stocks were unchanged today at 277,416 oz. against a total of 160,319 contracts as of yesterday, leaving a very comfortable ratio of 1.73 oz available against each 100 oz contract. Seems like everyone seems comfortable here, Comex volume is so low that our good friend Glenn is pitching copper pennies to keep awake!! BUT JUST REMEMBER THAT EACH DAY OF SUCH BOREDOM, MORE THAN 100,000 OUNCES OF GOLD IS PURCHASED THAN IS PRODUCED FROM GOLD MINES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Date: Tue Jun 10 1997 22:56
TED @capebreton>(@capebreton):
EBN Gold down .55 and Silver down 1 cent despite Dollar/Yen @ 111.14 down 1.23 ( 1.09% ) tonight...

Date: Tue Jun 10 1997 22:57
Steve Puetz>(
NJ: Yes, the Dollar is breaking into new low territory against the Yen tonight -- new lows for the past few months, that is. The rumor is that all the banks and hedge-funds that have borrowed Yen to buy US Treasury Bonds ( the Yen carry-trade ) , are starting to lose on the currency exchange rate of the Yen. To liquidate, they must sell US Bonds to pay of the Yen-loan. Watch out for the Dollar, watch out below on Bonds as more of these banks and hedge-funds get into trouble. Hundreds of billions of Dollars are reported to be in the carry-trade. Smaller amounts of the trade are versus the Swiss Franc.

Date: Tue Jun 10 1997 22:57
Auric Addendum>(Addendum):

When I said real debate, I meant a formal,
structured debate. I did not intend to imply that
we don't have good debates here.

Date: Tue Jun 10 1997 22:58
TED @midnight>(@midnight):
Goodnight too Tarnished!

Date: Tue Jun 10 1997 22:59
panda @eureka!>(@eureka!):
That's it Steve! I'll max out all of my plastic, buy as much gold and platinum as I can on the cards, and then declare bankruptcy! Yes! The 'system' can be beaten! All that I have to do, is make sure that there is no reference to what I bought on the receipts. Yes, I have literally turned plastic in to gold! The old alchemists had it wrong! It's not lead, but plastic! How could they have known, there was no plastic back then. :- ) ) :- ) ) :- ) ) Maybe that's why they call them 'gold' cards, eh!

On that note, ( gave my great investment idea away! ) , I'll say goodnight before they come to take me away! BTW, Dollar sinking good tonight, 111.22 last I looked. AG, RR, hurry up with those new fangled fifties, I want to buy some Yen before it's too late! ;- ) )

Date: Tue Jun 10 1997 23:03
APH: Since I'm not an ewaver, I guess I'm a little surprised by your numbers. SP @ 480 would seem imply a Dow at about 4200? Eh? .... 80% of all the mutual fund money ever, since beginning of time, is in the market above Dow 4500. That should serve some to pause and reflect. ....The final top around '03? If there is enough cash about, to start over from the 4000 area.

Date: Tue Jun 10 1997 23:04
slick goldbug@windycity>(goldbug@windycity):
JR no offense taken since, I expected such a response from you.

Date: Tue Jun 10 1997 23:06
Mike Sheller S&P? I remember that.>(S&P? I remember that.):
APH: Sorry about that...didn't catch the thread.

Date: Tue Jun 10 1997 23:10
Mike Sheller: Hey, Amigo. I don't know about you but I ain't got no 80 years left to hang around waitin' for that peak. Would it be too much trouble for you, to practice a little astrological legerdemain and revise ( as in speed up ) that forecast just a skoshi bit? .... I'm sure we'd all 'preciate it. ........ ( :- ) )

Date: Tue Jun 10 1997 23:11
Vieserre Leases and Their Affect>(Leases and Their Affect):
Ted Butler's well-written article suggests that by leasing metal, a lessor is deceived or harmed, the practice is detrimental, and it is a primary cause for the sharp increase in the price of the PGMS. This view apprears to be universally accepted in this forum. However, I fail to see the logic. Therefore, I wish to state my reasons for your consideration in the hope that if I am wrong I may be enlightened by a corrective response.

THE LESSOR IS CERTINLY NOT DECEIVED: The Lessor, usually a dealer in the metals, should know market conditions and risks as well if not better than the Lessee. The lessor knows or should know that the lessee has obtained the lease for the purpose of selling the metal and investing the proceeds for a period of the lease. And, as the lease is a legal transfer of a property right subject to restrictive conditions, if the lessor does not want the lessee to sell the metal, he could be so specify in the Lease. Thus there is no deception and the lessor is in control of the consequences of the lease as well as the sale of the metal.

THE LESSOR BENEFITS BY THE LEASE AND HAS LIMITED RISK. The lessor enters into the lease presumably to gain income on a commodity held for investment or inventory. If the metal is not returned he has the choice of buying the metal himself or, if he prefers, obtaining equivalent damages, and charging the lessee for the cost plus the lease rate. His risk may be minimized by assuring that at the time the lease is entered into, the lessee has the financial wherewithal to pay damages if the metal is not returned. The above assumes that the lessor has not entered into a naked lease where he merely transfers a right under the lease rather than the metal itself. In such a case, when he leases out more metal than he has in possession, he acts as a speculator and assumes major risk as well as allegations of fraud.

THE LESSEE ASSUMES THE MAJOR RISK. He benefits if he can reinvest the proceeds of the sale of the leased metal at a higher rate of return than the lease rate, prior to the termination of the lease or any extension thereof. He assumes the risk of repurchase and any change in metal price between the buy and sell dates.

THE LEASE DOES NOT CHANGE NET SUPPLY/DEMAND RATIO FOR THE METAL. Since the lease is merely a transfer of possession, it is only when the metal is sold by the lessee that supply is affected but this does not in anyway affect net supply and demand as once the metal is sold there is an immediate offsetting latent demand for repurchase.

THE LEASE WILL AFFECT PRICE ONLY ON A TEMPORARY BASIS. If net supply and demand is not affected, then the only effect a lease has on the price of the metal is at the time the metal is offered for sale, which will temporarily increase supply and reduce demand, and subsequently when it is bid for repurchase by the lessee at the term of the lease, which will increase demand and reduce supply. Moreover, once a number of such lease arrangements have been in the marketplace for a period of time, the effect on price of any lease transactions will be dependent on whether the amount of such leases are increasing in number, thus adding to supply, or decreasing in number, thus increasing demand. But in a period allowed for any particular lease transaction ( s ) to net out, the should not materially affect price since they have not altered net supply or demand over this period.

THE LEASE PRACTICE IS NOT NECESSARILY DETRIMENTAL TO THE MARKET. The lease promotes investment in above ground inventory by a lessor dealer, which may act as a cushion for vagaries in producer supply and industry demand, by enabling the dealer to obtain income on the inventory. The advantages of having this inventory available is borne out by the current large demand for it in the marketplace.

repurchase of metal under the leases as being the cause for the sharp increase in price.
However, there is no assurance that the high lease rates currently in force are solely or
primarily due to settling out of prior leases. A fortiori, even if this is true, it is arguable
that any outstanding leases have helped reduce the price rather than adding to it since
theses leases have added to supply rather than withdrawing from it.

Date: Tue Jun 10 1997 23:12
RJ - your comments on gold have forced me to respond. As a geologist, let me assure you that gold is not easily attainable, nor found, nor evenly distribruted. You sound as if you are speaking for Alan G. and the Central Banks to convince us that gold has no value! I would like to point out two personal experiences from people who left different countries. I had friends who left both Viet Nam and Mozambique, both took only GOLD with them, as their 'store of value'. What you fail to factor into your thinking is that the world population is increasing much faster than the available gold supplies, thus on a personal basis each individual on this planet has less gold available to them. Is gold worth anything? Some people seem to think so. Inflation is a new idea? Would you like to buy some tulip bulbs?

Date: Tue Jun 10 1997 23:13
NJ dollar>(dollar):
Byron : a curency crisis is on the short list of triggers that can spark a rally in gold. us economy gained handsomely on the devaluation of the dollar. with others now emulating, one wonders what are rubinspan's contingency plans to stay ahead of the pack. i am sure they have a trick or two up their sleeves.

Date: Tue Jun 10 1997 23:15
Auric Byte the Bullet>(Byte the Bullet):

Panda: Hell. Just hold off payments on them credit
cards until January, 2000. The Y2K bug will erase

Date: Tue Jun 10 1997 23:17
RJ That's all for tonight>(That's all for tonight):
Preacher - Those guys are dead? As for your astute comment about the 20th largest cities in twenty years, I agree with you entirely. I will address this in more depth in my upcoming treatment on gold for the rest of 1997..............

Date: Tue Jun 10 1997 23:21
Byron @ Hoping For Short Sleeves:>(@ Hoping For Short Sleeves:):
NJ Don't have my charts in front of me here at the library but if I remember correctly, the last bounce by the XAU up to 108 from 91? was during the time the dollar sold off against the yen. Remember the yen was at 127? and fell sharply to 112? had a bounce and now appears to again be strengthening against the dollar. Seems that as goes the $ so goes Gold. ( at least recently ) .

Date: Tue Jun 10 1997 23:26
Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )

Date: Tue Jun 10 1997 23:36
Steve Puetz @>(@):
Good-night Panda -- The credit-card alchemist!!

Date: Tue Jun 10 1997 23:36
Auric: With reference to your debate comment; I don't think there is a basis for debate between those two points of view. RJ, is a trader and drawing conclusions from the here and now. Trading the right hand edge of the chart as Oldman once phrased it. Ain't nothin' wrong with it.

Ted Butler, on the other hand has wondered why that chart has looked so crummy for so long. Especially in light of elementary things like supply and demand which should be at least mildly positive for gold. He has continued from there and found evidence that, yes indeed, whether by the hand of dark mysterious forces or the simple overextension of a paper cycle gone mad, the newly minted mechanisms of leasing, forward sales, derivative instruments and host of other scams, have produced serious distortions in the markets for these commodities. The essential function of a market is to produce signals related to supply and demand. His contention is that non market elements are hampering the ability of the PM markets to perform their primary function. He also believes, if the present situation is allowed to persist, these markets will rapidly reach total disfunction. As pointed out in his latest at Gold Eagle, PL/PA are almost there and gold and silver will likely follow. .... Sorry for the verbosity.

Date: Tue Jun 10 1997 23:43
Byron @ Bedtime Reading:>(@ Bedtime Reading:):
Just ran across this URL on the web. Titled Mining Scams. Have not read it all. Don't know if it has been posted here before.

Date: Tue Jun 10 1997 23:53
Auric High Noon>(High Noon):

Earl @ 23:36- Ted Butler and RJ cannot both be
right. The facts will prove one to be correct.
Personally, I go with the Butler scenario. I say
that by the year 2000, and very likely sooner, we
will find out.

Date: Wed Jun 11 1997 00:01
ark saltedcore>(saltedcore):
Worthwhile article in this week's Barron's, page 22.
Sidestepping a Bre-X may save a life or two. Not to mention
a shirt.

Date: Wed Jun 11 1997 00:05
Auric: Perhaps it's a misunderstanding ( on my part ) of their respective positions. BUt the sense I have of the matter is this: RJ believes gold is going down. For many reasons, previously stated. Ted, believes the same unless underlying forces, which he has identified, are mitigated. ... I'm an agnostic but I'll tell neither one that. ...... ( :- ) )

Date: Wed Jun 11 1997 00:13
RJ One more for the Gipper>(One more for the Gipper):
Arden - I, unlike many others here, have very little emotional investment in gold. Free of this reason clouding attachment, my assessment goldís merits and shortfalls rests in facts not supposition. By no means am I trying to say that your arguments are biased in this way, but some that I have read are. Let me answer your main points:

Distribution of gold reserves; name a continent in which gold cannot be found? Regarding the central banks, they have a very real interest in the price of gold; precisely never too far above $400. As for the banks trying to convince us that gold has no value, since when? Central banks are the largest holders of gold on earth, and as such have a more vested interest in gold than any other can claim. Since when do CBs want gold to be worthless? Their goal is a stable price of gold, as this gives the appearance of stable currency. Note I said appearanceí, I do understand the game. Why else would one CB or another step in and cap off any significant rally over $400. Last time it was Belgium with over 200 metric tons.

To answer all offers of proof as to goldís value in times of crisis or for refugees. I agree completely This agreement carries the proviso that there must be a place for one to go where gold is valued above the goods and commodities it may be traded for. Were I a third world citizen, all my wealth would be in gold, but the global collapse that some here envision will make all men equal. I say again, if the western world falls, the entire world falls. I for one do not believe in the decline of the western world, which I will discuss in depth later, so please donít blast me with the arguments now until you read what I have to say.

The main focus of my argument is that gold, as an investment vehicle, store of wealth, and preserver of value, has performed dismally in the last 20 years. Let me turn the numbers around. Average price of gold for the last 20 years: $327. Purchasing power of $327 ( 1977 dollars adjusted at 4% per anum ) : $716. Where did the other $389 go? This seems like a very expensive store of wealth. I again ask anyone to refute the numbers. Is my calculator part of the Alan G & the CBs conspiracy? More likely, it is a sleeper in the Japanese takeover, it is a Casio after all.

Date: Wed Jun 11 1997 00:18
Auric Go For The Gold>(Go For The Gold):

Earl @ 00:05-My understanding of Ted Butler's
argument is this: There is a huge paper surplus in
gold which must be addressed. It means that it's
going to create a massive imbalance between physical
gold availability and paper demand. The result is
that valuation in terms of paper- be it Dollars,
EMU's Yen, etc.,- will rise.

Date: Wed Jun 11 1997 00:35
BIG TRADER @Delivery Day>(@Delivery Day):

Watch London. Uplink terminated.

Date: Wed Jun 11 1997 00:36
Mental Police @ everywhere>(@ everywhere):

RJ: Is that you VRONSKY? hmmmm

Date: Wed Jun 11 1997 00:38
Vieserre: In scholarly fashion, I think you have narrowly framed the substance of your argument to address the concerns of lessor and lessee, at the expense of the more important element, which is the market itself.

If 'A' sells a naked short to 'B' who in turn is committed to lease to 'C', is this not a distortion of the normal commercial event? That is, a visible transaction has taken place but no physical has changed hands. As long as the level of such activity remains within the limits of product availability in the cash market ( assuming stable supply/demand ) , 'A' should be able to cover his short without disruption. The price mechanism would still function via the cash market.

If on the other hand, naked speculation rises beyond a prudent level and cash supplies are found thin at such a time that demand is increased or supply suddenly disrupted ( ie, PA from Russia ) , the imprudent speculation will have to be considered as causative agent in market dislocation. For if rampant speculation had not taken place, price would have been better able to more smoothly reflect actual market conditions and balance the equation. Which is where PA/PL are currently.

Date: Wed Jun 11 1997 00:44
Arden @23:12: While we dance with a whirlwind, you draw a sword and cut to the quick!

Date: Wed Jun 11 1997 00:57
Auric Sorting It Out>(Sorting It Out):

Earl @ 00:38-Spot on! ( If you will excuse a
metaphor ) . The same paper imbalances present in the
Platinum and Palladium markets are lurking in Gold
and Silver as well.

Date: Wed Jun 11 1997 01:01
RJ How's this for Hostility?>(How's this for Hostility?):
Me thinks there are many ruffled feathers here. Does anyone think I didnít know the group I was addressing? It is precisely that you are who you are, that I came here to say what I have said. I offer my arguments with respect for the receiver. Once again, for those who have not read some of my priors; I own gold. I also own platinum and silver. I make my living in these markets. I am well protected. Do not ascribe to me that which you do not know nor have I told.

Slick - my apology was obviously not accepted. Do I note real hostility there? Pardon me if Iíve heard the Ďwheelbarrow-o-cash for a loaf of breadí just once more that the Ďounce-o-gold for a suití story. I would appreciate new arguments. I think anyone familiar with these markets has heard those same arguments time and time again. Is there nothing more you can offer? I admit my response was overblown, but let me pose a question to all: Is there not great discussion here of puts and calls and contracts and mining stocks? Are all proceeds of these used to buy metals? Is none traded for the needs of the day? Do none of you have jobs? If we are to have a proper discourse, it is time that some of you get down off the soapbox and speak face to face When those who profess to loath paper stop their paper pursuits, then they might occupy a slightly higher moral ground. Please, no more postings of how I do not understand. I understand all too well and have thought these issues with great care. I must say again, platitudes and anecdotes are shortcuts to actually having to think! Next time one pops in your head ( the nonspecific collective head so as not to offend anyone in particular ) , ask yourself the next question it raises. If you do not, Shirley I will. I know, donít call you surely

Date: Wed Jun 11 1997 01:08
Palladium here>(here):

Hi. There is no shortage of me. I can be bought.
As much as you want. Ahhh but the price. That is
the question, lad.

Date: Wed Jun 11 1997 01:25
Squinch testola>(testola):
does anyone else expect SI7N to test 468.8 tomorrow before heading up?

Date: Wed Jun 11 1997 01:30
Auric Why Not?>(Why Not?):

RJ: One ounce of Gold to an agreed upon charity says
Gold gets to $500 between now and !2-31-99. You on?

Date: Wed Jun 11 1997 01:32

RJ: ( 01:01 ) I agree, some of those stories even turn a
gold believer off. Especially the one about all the gold
ever mined fitting into a cube of A' x B' x C'. You
should read Pedro's ( of 6/10 ) for good info. Actually
my own feeling is that with credit, credit cards and the
share markets etc________etc,they are trying to stuff one
tonne of bullshit in a five pound bag. BOOM, Think about

Date: Wed Jun 11 1997 01:54
Auric: We're in basic agreement, you and me.

Date: Wed Jun 11 1997 02:14
Jack Auric>(Auric):

Auric: ( 01:30 ) According to Pomboy Capital Corp's,


As published on page 23 of the FINANCIAL TIMES of 6/9/97
gold should be around $500 now.

They are not goldbugs.

Date: Wed Jun 11 1997 02:27
Arctic Spirit>(
We are having a lot of fun with this stuff. Reaction is great.

Date: Wed Jun 11 1997 02:33
Mr. Conductor Thomas The Tank Engine>(Thomas The Tank Engine):

Any Shining Times Station fans out there? There is
SOMETHING about this Kitco place!

Date: Wed Jun 11 1997 02:38
Auric Ready>(Ready):

Earl-Agreed. It's been like watching paint dry,
this market, eh?

Date: Wed Jun 11 1997 02:39
Jack Any old refiners up North>(Any old refiners up North):

Arctic Spirit: What's the verdict, on the coins, the salt

Date: Wed Jun 11 1997 02:59
Squinch: I see the support you are talking about. I don't know have any
idea if we'll bounce off it or not.

FYI - In Japan today - PA's out months closed up today, while the june
contract closed down. This is the first day I can remember where that's
happened in the last three months. Maybe the market is starting to see
the light and the light isn't shinning on $150 palladium!

Date: Wed Jun 11 1997 03:24


Date: Wed Jun 11 1997 03:36
Auric To Mr. Cannonball>(To Mr. Cannonball):

A fool and his money are soon parted.

Date: Wed Jun 11 1997 04:03


Date: Wed Jun 11 1997 04:03


Date: Wed Jun 11 1997 04:03


Date: Wed Jun 11 1997 04:03


Date: Wed Jun 11 1997 04:03


Date: Wed Jun 11 1997 04:05


Date: Wed Jun 11 1997 04:05


Date: Wed Jun 11 1997 05:01
Goldbug23 @Ingot>(@Ingot):
Earl: You comment June 10 23:26 sums up the Great Debate very nicely. RJ's well spoken and his points should certainly be considered, but he isn't really interested in debating.

Date: Wed Jun 11 1997 06:16
Mike Sheller Anecdotally speaking>(Anecdotally speaking):
RJ: Did you hear the one about gold being so malleable ( how malleable IS it? ) that an ounce of it can be spun into a wire three miles ( or is it thirty miles? ) long! Or can be hammered so thin ( like the current market ) that you can read thru it? Shirley you've heard that. Doubtless one can unearth stories of refugees pulling themselves out of disintegrating cultures by the thread of a spun gold ounce, while inconspicuously hiding behind a newspaper that they were reading thru a severely beaten ounce of gold. Just try that trick with aluminum and see where it gets you. Also, gold CAN be eaten. Witness its use as a leafed decoration on cakes and pastries at the end stages of civilzations and indulgent societies. Silver bullets have been used in Romania since the 1930's Universal International werewolf movies to kill all sorts of hirsute man-beasts. Sort of like the folks who try to take your gold or .999 potatoes away during those occasional ( and pesky ) societal apocalypses. And as for suits, well, I don't much wear them except for important client meetings, etc, which don't seem to be so important as the years go by. It's the women who are lucky. They can wear gold lame' ( pronounced la-may ( ( can't find my accent here ) . Men can't get away with wearing their Au as clothing per se, without someone shouting Ey-You! ( cept maybe on Fire Island ) . Also, did you ever notice that a one ounce Kruggerrand ( is that 1 G and 2 R's or what? ) is remarkably like a quarter, and will fit nicely in the slot at the laundry when you're low on change. So gold keeps your clothes clean as well. I used to fool the bus drivers in Manhattan with one ounce mapleleafs when they thought I was actually putting subway tokens in the change hopper. Gold gets you where you want to go. No, sir, I think this argument proves beyond a doubt that gold is indeed the only thing one needs to own. Come to think of it, it might even make a wonderful investment vehicle some day.

Date: Wed Jun 11 1997 06:45
TED @capebreton>(@capebreton):
EBN Gold down .30 and Silver up a cent; Dollar continues to weaken versus the Yen down 1.14 ( 1.18% ) @ 111.23...Nikkei down 242 ( 1.18% ) and Japan's current acount surplus up over 90%....

Date: Wed Jun 11 1997 06:50
panda @>(@):
This mornings PL/PA news stories?

Date: Wed Jun 11 1997 07:06
Eldorado @the scene>(@the scene):
RJ -- Your argument that the last twenty years has been pretty dismal for investing in gold is pretty good. The numbers show that. No problem. On the other hand, one can look at it as no more than buying insurance. Hey, maybe the CBs etc. can hold down the price of gold for the rest of the year. Then again, maybe a bit of 'paper' can't get unwound fast enough. My statement that I do not trust you simply means that you might have me, or others, shorting the metal just when things 'get interesting'. Sorry, but these are interesting times and the next twenty years are not going to look like the last twenty years. It could also be that the next two months could be interesting. Time will tell. As for name calling, that's what the government and their media lackeys do. I certainly wouldn't like one of those labels doesn't get attached to you.

Date: Wed Jun 11 1997 07:10
Political Question @>(@):

Have the Republicans painted themselves into a
corner again over this disaster relief bill? Looks
like another big win for Clinton. ( Ignore that
obnoxious shouter )

Date: Wed Jun 11 1997 07:10
Reify @my 2 cents>(@my 2 cents):
RJ- Been reading your replies to a lot of various questions, and comments addressed to you, and would like to make the following point.

Most of us, I believe, see gold not as a trading vehicle, but an investment for, and in the future, one that could survive possible calamities, in the stock markets, which appear to be substantially over-valued.

There are other possiblities, but gold and precious metals seem, at this time in history, to be undervalued and from a chartist standpoint being accumulated. Quoting- Accumulation of paper today to trade for the commodities of the day and the invest for
the future is the wisest way to protect oneself. Hope you don't feel this was taken out of context, as it was only a part of what you said. However what would you recommend as a better long range future investment at this time, than precious metals, in various forms of investment?

Date: Wed Jun 11 1997 07:22
George S. Cole August gold>(August gold):
August gold down 60 cents despite drop in dollar/yen. Looks like things will get a little darker before the dawn.

Date: Wed Jun 11 1997 07:23
TED @capebreton>(@capebreton):
Panda ( 6:50 ) Sounds like more Russian incompetance....Looks like ya got a heat wave in Beantown...send it up this way!

Date: Wed Jun 11 1997 07:30
Tortfeasor Joke of the morn>(Joke of the morn):
From the looks of the gold market and options which decrease in value every day if there is not movement that a joke is in order. Morning, Ted, something just dropped in your fishpond.

A man and his date walk into a very posh Rodeo Drive furrier after
having eaten a very expensive lunch at one of Beverly Hills most
exclusive restaurants.

Show the lady your finest mink! the fellow exclaims.

So the owner of the shop goes in back and comes out with an absolutely
gorgeous full-length coat. As the lady tries it on, the furrier sidles up to
the guy and discreetly whispers, Ah, sir, that particular fur goes for

No problem! I'll write you a check!

Very good, sir. says the shop owner. Today is Saturday. You may
come by on Monday to pick it up, after the check has cleared the bank.

So the man and the woman leave. On Monday, the fellow returns. The
store owner is outraged: How dare you show your face in here?! There
wasn't a single penny in your checking account!!

I just had to come by, grinned the guy,

to thank you for the most wonderful weekend of my life!

Date: Wed Jun 11 1997 07:42
panda @Hot?>(@Hot?):
TED -- You can have the heat! One warm evening ( ~68 F ) and people are already driving like idiots! Somehow there is a germ of an idea here. If I could only 'infect' the gold market with such madness. Perhaps a heatwave in the metals markets Hmmmm, I'll have to think about that one...

Date: Wed Jun 11 1997 07:59
RJ - Your repeated comments of the last few days that Gold has been a lousy investment for the last twenty years, ( EG. - Your 00:13 ...Average price of gold for the last 20 years: $327. Purchasing power of $327 ( 1977 dollars adjusted at 4% per anum ) : $716. Where did the other $389 go...? ) , seems to me to be just backing up what many here are saying, and that is that Gold is at the bottom of a cycle right now and is UNDERVALUED at the present time. That's what you're saying in a nutshell if you really think about it.

Date: Wed Jun 11 1997 08:18
Mooney @Ted>(@Ted):
Morning Ted! Going to Work Now, Ted! C U L8R

Date: Wed Jun 11 1997 08:27
panda @>(@):
I know how to 'save' gold ( from itself, that is! ) ! Everybody buy the S&P500 until it goes to infinity ( or pretty close to it ) , then gold will be so cheap, everybody will just have to buy it. They'll buy it, if for no other reason, to put in their dessert! :- ) )

I can see it now, I'd like a chocolate ice cream cone with gold jimmies please. Think of the possibilites! And what if we used platinum jimmies instead of gold jimmies!!! Think of it! :- ) ) :- ) ) :- ) )

Date: Wed Jun 11 1997 08:29
TED @chainsawin>(@chainsawin):
Tort: It ain't here yet as Iez in a mad rush fer the woods fer me last day of chainsawin before the blackflies go BESERK...Warm weather finally here ( 67 F and climbing ) and those vicious little bastards are just learnin how ta bite...Panda: HAHAHA....Kill one of those Harvard-yard air-heads fer me....

Date: Wed Jun 11 1997 08:31
TED @bye>(@bye):
Mooney: Get a life...and yer late fer work....again!

Date: Wed Jun 11 1997 08:35
Mike Sheller Meta Musings>(Meta Musings):
RJ: In a more serious vein, there is a phenomenon I would like to call segmentation of time which might prove a fruitful way to view markets and human action. So, for instance, there are indeed some general things one can say about gold, or stocks, or bonds, etc, that apply quite nicely within certain segments of time. From 1972 to 1980, certain old saws concerning gold could have been repeated with little refutation. However, those obsessed with such stereotypes in the early 70's did far better as gold investors than those latecomers who mouthed such platitudes only in 1980. By the same token, since '82 those who believed the stock market could only rise, and that shares returned 10% and more like the rising Sun, did quite nicely. Those who have just now caught on to this old saw might be in for a surprise if and when a new time segment paradigm emerges. The correction in gold since '80 bears out your arguments for this time segment. No question. Even the most diehard gold aficionado must acknowledge there is a time and a price for everything, including gold. I think what we must glean from all this is that perhaps, just perhaps, we are at a juncture where a new time segment and paradigm shift in the investment world may be emerging. I realize that sometimes those who are noty sufficiently detached can argue that NOW is ALWAYS the moment that things will turn. This is human nature. Discounting that, however, it would not be surprising to conclude that the marvelous stockmarket spectacle we have been witnessing has given many gold accolytes support for the thought that a significant asset inversion, or re-evaluation, may be close at hand. One could not blame them, looking at a chart of the Dow. It has been my observation that these things unfold over a number of years, and since we are talking about a theoretical approaching time segment that itself could last a decade or two, we must endure the slow-motion gathering of forces that will exteriorize the as yet internalized future seen by the more prescient among the goldbugs and prophets of doom. I myself, while open to the most outrageous possible scenarios, realize that life usually goes on in spite of our occasional misteps and blunders. I hope only for prosperity, peace, and joy. But I look over my shoulder when I hear ( in ) human cannonballs rolling by.

Date: Wed Jun 11 1997 08:42
EMU Salting Crew North Pole>(North Pole):

Kohl's governing coalition fracturing. May not last
out the year. Watch Germany

Date: Wed Jun 11 1997 08:42
Speed leaving for work>(leaving for work):
Mike Sheller: Well said. I was trying to formulate something along the lines of time segments for both RJ and Fundy, but will now wait for responses to your post.

Date: Wed Jun 11 1997 08:48
Roebear @refugeetales>(@refugeetales):
arden and all: re arden 23:12 post, after the fall of Vietnam I knew certain folks who were present when the Vietnamese refugees were kept at military installations etc. awaiting US sponsors. Some of these folks were carrying so much gold sewn into their clothes/baggage they could barely walk. The US gov't was happy to exchange our dollars for their gold. A bank brought in a mobile branch, armored car etc. The highest amount of gold turned in was $180,000 ( and this was at 1975-76 prices! ) . I do not know if they were allowed to keep any gold or if they did. I do not believe the fact of this refugee gold was ever published but was young at the time and may have missed it. All of the refugees that I ever met were industrious, decent folks who took to US economy like fish to water, many are now prosperous in business. I wonder if any are now goldbugs?

Date: Wed Jun 11 1997 08:54
News @>(@):

True story: Disabled Barbie can't fit into her $100
Doll House! What next? Lawyer Barbie to sue Matel?

Date: Wed Jun 11 1997 09:03
panda @Dollars.Yen.?>(@Dollars.Yen.?):
Cry havoc and loose the dogs of currency war!

Date: Wed Jun 11 1997 09:04
bw us currency:>(us currency:):
This piece of paper is a strange creature. Once a receipt for something of value ( gold and silver ) it now is neither receipt nor debt. A worthless scrap of paper that others will ( for now ) accept and pay value for. The us treasury says there is about 500 billion worth here in the usa and less than one trillion world-wide. This world-wide figure is surely vastly understated. I have seen estimates of up to six and a half trillion. The us dollar is printed here and also at least in iran. Once a stable form we seem to be getting a new dollar every other year. Yet another change is coming as the onshore/offshore dollars. We have a real problem with the offshore printing presses.They may even provide the crisis which requires electronic cash as its solution. With the dollar you can be sure of only one thing. The dollar's value will one day equal that of all ( not a single exception and there have been thousands ) other currencies which have been stripped of their backing. Zero.

Date: Wed Jun 11 1997 09:24
George S. Cole market makers>(market makers):
From the World Gold Council. Comments?

In the London bullion market, Phibro has followed the recent example of
Lehman Brothers by withdrawing from market making, although the
former apparently intends to remain active in bullion. This reduces the
number of market makers in London to twelve. Finally, on June 4, Peter
Fava of Midland Bank was elected chairman of the London Bullion
Market Association, succeeding Alan Baker of Deutsche Morgan

Date: Wed Jun 11 1997 09:24
Roebear @backfromwaterworld>(@backfromwaterworld):
Just catching up on the news Kitco after some boating with family ( Ted and Front inspired me to hit the water again ) . Excellent contributions. Vieserre, Earl, Ted Butler I'm trying to understand leasing/forward sales do any of you have any books, resources you could recommend? Mike Sheller, loved that segmentation of time idea; we must keep exploring, where no Goldbug has gone before!

Date: Wed Jun 11 1997 09:26
Front @upandatum>(@upandatum):


Purchasing power of $327 ( 1977 dollars adjusted at 4% per anum ) : $716. Where did the other $389 go?

Correct me if I'm wrong please, but I believe you're saying that the power of $327 adjusted at 4% inflation from 1977 would now be $716. In other words, the price for an item in 1977 being $327 that same item should now cost $716. I think I've got that right and agree.

If that follows, logic would say that if that item was gold ( oz. ) , then gold did not keep it's value since it should now be at $716 if it kept up with inflation over the years. If gold had moved in a straight line like inflation did, I would have to agree.

Perhaps we might back up just a second. Did not Gold a one point in time go over $800? Perhaps that was all the catch-up in one swoop? Obviously, if we had sold when it was at it's top, your argument would have folded rather quickly as we would have achieved a 10.5% increase in value even over inflated price levels. I agree that that was one day only, however it did happen and cannot be ignored by averaging. So if we missed that cycle, perhaps for the next cycle, we will be better positioned to sell to our advantage and catch-up again, all in one swoop?

Gold has moved in much larger cycle swoops than the dollar over the same time period.

You see my problem? You've taken the average of a very large cyclical moving target and compared it to a very steady definitive inflation movement. If you want your argument to be justified then you , IMHO, must compare apples to apples. If you want your arguments to stand the tests, then take the average of the moving target of inflation on the dollar as well. That would make it $521.50.

Nothing personal, I assure you. You did ask for someone to refute your numbers and I believe that now has been done. I also think you have compared apples and oranges, to your arguments advantage.

Date: Wed Jun 11 1997 09:31
CrystalBall StockMarket_Puts@EatingDust>(StockMarket_Puts@EatingDust):
Tort- This one's for you...
In a long line of people waiting for a bank teller, one guy suddenly started massaging the back of the person in front of him. Surprised, the man in front turned and snarled, Just what the hell you are doing?
Well, said the guy, you see, I'm a chiropractor and I could see that you were tense, so I had to massage your back. Sometimes I just can't help practicing my art!
That's the stupidest thing I've ever heard! the guy replied. Look, I'm a broker. Am I f&$#*ing the guy in front of me?

Date: Wed Jun 11 1997 09:33
Front @upandatum>(@upandatum):


I might as well be the first to post it here....

ONTARIO has had a court ruling that it's legal for women to go topless outdoors anywhere in public. Some women in Toronto and Ottawa have already made the news and it hit CNBC last night. ( boy was Sue embarrased! ) Anyways, it's legal. The only problem I have is that the girl who showed up on TV last night while washing windows topless, had a spiked dog collar around her neck. Geez, I think I'd be looking out more for that than anything else! That could hurt !!!!

Date: Wed Jun 11 1997 09:40
panda @summertime!>(@summertime!):
Front -- I heard that story in the news last night. What do you folks do in the winter time? :- ) )

SA coal/gold mines start wage negotiations on Friday with the unions. The unions are reported to be looking for a twenty percent increase. Inflation running at %9+. More at;

Date: Wed Jun 11 1997 09:49
ted butler lease thoughts>(lease thoughts):

Thank you for your important contribution ( 23:11 ) to the leasing debate. I agree with you that the past and current benefits to the participants ( CB's, dealers, mining cos, users and speculators ) has been great - that's why they have grown to such significance in the market. Where we obviously disagree is in what adverse effect these leases have had/will have on the metal markets. I think the questions of who is being deceived and who is assuming the real risk in these transactions will be answered in time, although I did find it curious that not once in your posting did you mention the central banks, who along with other government lenders, are the prime real lenders of the metal, not the dealers. It would be a pretty boring debate if it were limited to who might be the bagholder ( s ) , and the choice was limited to dealers, CB's and/or mining cos.

I don't think it productive to answer your disagreement point by point ( although if you want I will ) , but allow me to observe my main problems with these metal loans;

1.Every time a loan is originated, physical metal is released. This is no bookeeping entry - actual metal goes to market. This has to influence price and the real supply/demand equation.

2.There has never been a net repayment of metal loans in their 15 year existence. While individual loans may have been paid back from time time ( maybe ) , the total outstanding amount of metal loans has only grown ( along with growing amounts of metal being dumped on the market ) . This means that we have never had to experience what it's like to observe market conditions when metal loans are repaid, and metal is taken from the market. I do think we started to see this in PL/PA when prices exploded and lease rates ( which were 1-2% for years ) jumped as high as 300%. A reasonable person would see or sense a connection. What is more interesting were reports that the the lease market just shut down and cash transactions were automatically extended.

3.The real problem with these loans is that they are the only class of loan, in existence, that are denominated in something other than currency or paper securities. Think about that for a moment. No other type of loan in the world calls for settlement in something which is finite in its existence. All other types of loans call for repayment in some type of paper which in an emergency, or run on the bank, can be created out of thin air. But you can't do that in the metals. In fact, because of the supply demand deficit in each of the precious metals, the supply is not even finite, it is shrinking, by definition. And against this shrinking supply base, we have growing repayment obligations. This is why the lease market in Pa ( and probably Pt ) shut down at the first sign of repayment demands. And why it has to happen in gold and silver. The only question being when. It is impossible for these metal loans to be repaid as called for.

Date: Wed Jun 11 1997 09:52
Lan Man Leveraged to the Max>(Leveraged to the Max):
Steve Puetz: re Real Estate prices - In theory I agree with Davidson/Mogg that R.E. prices will be heading down, although not to the extreme of 10c on the dollar. In talking to my friends and associates, the vast majority are leveraged to the hilt, having paid less than 10% down ( most around 5% ) and are living on their credit cards to meet everyday expenses. Several have told me directly that if things get much worse, they will default on the loans, max out the credit cards and declare the big B.

Being debt free at this time, am waiting patiently for the debt pyramid to topple over where I can then scoop up the bargains of a lifetime. Living in So. Calif. where housing prices are still overpriced by at least 50%, it will probably take some time before housing is again fair valued.

Just yesterday heard on the radio of an outfit offering loans on your property with NO equity needed! They state that they will loan up to 100% of the value of your house. Anybody got a lite? ( match or Bic lighter will do just fine ) .

Pass on my thanks to your wife for responding so quickly to the e-mail regarding the order of your book...

Date: Wed Jun 11 1997 10:00
panda @random.thoughts>(@random.thoughts):
Ted Butler -- As part of the gold confiscation during the thirties, weren't gold loans also made illegal? In other words, loans were to be repaid in cash, not gold coinage. My question is, aren't these metal loans in effect 'gold' loans? If so, aren't they illegal? If they settle in cash, then the loaning of the metal is a fiction, no? If they settle in 'bullion', then they are illegal, per FDRs executive orders. None the less, I agree whole heartedly, that there is one hell of a problem looming! PA/PL are only harbingers of what may be coming in the near future.

Date: Wed Jun 11 1997 10:08
Front @upandatum>(@upandatum):


In the winter time we bring the brass monkey indoors.


Date: Wed Jun 11 1997 10:34
Arctic Spirit>(
Checked out the cap, yet? Funny thing is ... brokers so far,
are probably the biggest customer group for the caps.

And, no, we do not carry coins/salt shakers. Just caps and T-shirts.

Date: Wed Jun 11 1997 10:46
bw @9:04: History is on your side.

Date: Wed Jun 11 1997 10:47
D.A. loan.leverage>(loan.leverage):
Ted Butler:

Your musings about the outstanding metal loans are appreciated. There is no doubt that in the event of a real shortage ( like when the cupboard is bare ) that these shorts would add a great deal of fuel to the fire. While I have seen estimates of the amount of gold out on loan I have never seen anyone take a stab at silver. In your investigations have you ever come across a number?

Date: Wed Jun 11 1997 10:54
Tortfeasor Message for Crystal>(Message for Crystal):
Crystal Ball, your message unfortunately rings true in my case and I was in front of that broker in the line to get on the bus. Looks like silver is showing signs its tired of sleepwalking and wants to get back in bed.

Date: Wed Jun 11 1997 10:58
Ted Butler: I recall some talk of cash settlement in other markets. SP 500 .... Is it possible for metal markets in delivery stress to declare some form of cash settlement? I realize that does not help fabricators out of their physical need but it should be apparent to all that end users are no longer a major source of concern in metal markets. The focus of concern seems to have been captured by speculators who stand to lose bigtime.

Date: Wed Jun 11 1997 11:04
Cherokee: Could you please send me the source of a quote you posted some time ago which ended lemmings all, lemmings all. Thanks

Date: Wed Jun 11 1997 11:18
ted butler again leases>(again leases):

Regarding your question on the size of the silver lease market. Boy, I wish I knew. My sense is that it is huge, based upon the published statistics and ancedotal evidence. As you have pointed out many times in the past, we are running a tremendous deficit in silver to the tune of hundreds of millions of ounces over many years. I look hard but I can't see this coming from voluntary inventory liquidation. The public may not be big buyers of silver or other metals, as metals, but I see zero evidence of net sales. Changes in inventory management can't account for it either. So I ask, where is the supply coming from to satisfy such staggering shortfalls with no change in price. If we are agreed it's happening in gold, it is reasonable to think it is happening in silver. Until two months or so ago I didn't know there even was a lease market in Pt and Pa. The point being these are not transactions done in the sunshine. Admittedly I am forced to infer some of these conclusions as far as size, but at least not to the actual existence of the market. In fact, I thought it quite interesting that the Treasury, in its brush-off response to my letter, acknowledged the existence of silver loans. And Bart lists the rate daily.

Last week I read a report that someone bought 50MM oz of silver from a lease transaction, and this weeks Barron's has a letter to the editor talking about a 50MM oz lease transaction in 1995. I guess if the facts and numbers were beyond question we wouldn't have much to talk about, or analysis or markets in general, I thought the amounts were not significant at first, but I don't think so anymore. And there's no way some CB is ever going to raise their hand and say, Hey, we just got screwed and lost our metal to the city slickers, at least not the guys who actually made the loans.

Date: Wed Jun 11 1997 11:36
REB na>(na):
To Glenn, RJ, other traders: Any thoughts on what is keeping gold in such a narrow range?

Date: Wed Jun 11 1997 11:36
Big Trader is right again. Chaos in London on delivery day!

Date: Wed Jun 11 1997 11:55
D.A. re.defaults>(re.defaults):

In the case of the OTC metals markets there is no regulatory body to impose its will upon those with positions. There are individual contracts drawn up between the clearing houses and the buyers and the sellers. These contracts usually contain some clause with respect to defaulting but I don't know if there is any standard. I don't believe that there will be defaults in the PGM markets. There is after all a lot of metal being produced and there must be a clearing price. If Pa rises above the gold price for example, a great deal of the dental demand will dry up. If Pa were to get very high relative to Pl, I assume we would see some substitution in the auto industry. You may say well, how high would Pl have to go to get substitution? I don't know, but at some price the Japanese jewelry business would shut down. There is always a number at which people will sell. It may be a very big number, but a number none the less.

Date: Wed Jun 11 1997 12:08
REB: ( Trading range of gold ) . I believe we are pretty close to an outbreak. Today situation reminds me to early 1993 just before gold started this 25% bull-run ( hedge funds jumped to the long-side ) . The charts seem very clear: triangle, positive divergences in almost every indicator. It shouldn't take another two weeks. It's possible that the outbreak goes down ( under 339 ) but unlikely, I guess 80:20.

Date: Wed Jun 11 1997 12:14
bw Re: gold leases>(Re: gold leases):
Ted Butler: Thanks for your work exposing this hustle. Having the details of this scam sure makes me feel better. In my opinion the complex gold lease mechanism was put in place not by accident or the market but by the same lovely people who have given us the worthless dollar and a financial system filled with worthless ious. After the run up of gold in the 1970's a plan had to be devised to prevent its reoccurrance. Once more our taxes have provided the resources used by those running the largest con game in the history of the world, to harm us.

Date: Wed Jun 11 1997 12:34
ted butler semantics>(semantics):

You asked the right question re: cash settlements. Default is the most obscene financial word of all. You will never, ever hear it mentioned except as in, there was no default, or there will be no default, or we know of no defaults. What you will hear instead is the delivery period was extended, there are no dealings in the lease market because of those damn Russians, and it has been decided that all contracts will now be settled in cash until the markets stabalize, or contract specifications have been adjusted. Are we all on the same page now?

Date: Wed Jun 11 1997 12:47
Ted Butler:

Another market whose activity is exemplary of one where a large overhang is in the process of being drawn down is Zinc. If you look at a chart of LME stocks with respect to price you can see that the inventory drawdown had to go on for a very long while before the price began to move higher. Since I do not believe there is a large market in zinc loans this would seem to be an example where large drawdowns in inventory can occur without effect price. My guess is supply, demand and prices curves do not exhibit those nice monotonically increasing or decreasing functions as graphed in ones basic econ textbook. My guess is that if existing stockpiles are greater than some basic threshold level with respect to consumption, drawdowns in inventory may be accomplished coincidentally with declining price. This is probably largely a function of emotion in the sense that inventory holders see the value of their inventory declining and take steps to liquidate some of their holdings so as not to incur further losses. This process may feed back positively upon itself causing even greater price declines and more liquidation. Because the activities are taking place in commercial enterprises, the action is very slow, and can be drawn out over many, many moons. An outside observer may see the process taken to what are apparently absurd extremes. It takes someone from outside the commercial realm, the speculator, to transmit the changing fundamentals into price action, by bidding for a material amount of supply. At this point the price may rise very sharply. After the price has gone way up the commercial players then can understand what has happened, so they're habits change. As WW stated the news follows price. Nine months ago you could not find a single story about a potential supply problem in the PGM's. Now Panda pulls a few off the news wire every morning. All this even though there have been no material changes to the amount of new production or the amount of consumption.

As a side note, with the markets being so thin and spreads being so wide there are some amazing trades that are popping up. I'm trying to get some long dated hedges done now and hope to have more to report soon.

Date: Wed Jun 11 1997 13:11
panda @>(@):
Is there a message here?

and what about this?

Date: Wed Jun 11 1997 13:20
bw free trade:>(free trade:):
Good article on the politics of free trade on page a24 of todays wsj. The prices we are paying for goods produced by chineese political prisioners, children and other semi slave labor ( yes this may be but a component of the labor content of the incoming goods ) may seem cheap now but the long term cost may be more than we can afford. Free trade only works for a country if the people who lose their jobs to foreign competition can find other jobs equal to or better than the one lost. Its a sham to throw millions off welfare while at the same time shipping the jobs they could take to mexico and china. No doubt most in this country feel free trade benifits them, I did too at one time. When we enter the next economic down period the true cost of free trade may reveal itself.

Date: Wed Jun 11 1997 13:28
George s. Cole gold stocks>(gold stocks):
Gold stocks up across the board today; not just XAU. Volume decent, but not huge. Encouraging action. If the gold sector begins a big run this month ( fifty-fifty chance now in my opinion ) , look for the overall market to peak in July.

Date: Wed Jun 11 1997 13:35
Ron Weidner>(
Have you all seem this?
Russian banks soon able to buy gold bars - Nemtsov

VLADIVOSTOK, Russia, June 11 ( Reuter ) - The Russian government is working on plans to allow commercial banks with the correct licences to buy gold bars, First Deputy Prime Minister Boris Nemtsov said on Wednesday.
He said the document relating to this issue would be signed in the the next few days. Nemtsov was speaking during a whirlwind trip to Russia's Far East, where a long-running energy crisis continues.

``This measure alone would be enough to help the gold mining industry out of a crisis,'' he said.

Nemtsov said Russia produced 113 tonnes of gold in 1996, and that output this year was expected to fall by several tonnes.

Gold output estimates in Russia vary widely. The head of the central bank's precious metals department, Sergei Kyshtymov, said last week that production in 1997 was likely to be no more than 100 tonnes, down 11 to 12 percent from 1996 levels.

Anatoly Chubais, Russia's other First Deputy Prime Minister, was quoted by Itar-Tass news agency on Tuesday as saying a presidential decree allowing the liberalisation of the gold market would be signed soon.

Plans to liberalise the heavily-centralised gold market were first announced by Chubais in April, and are expected to include a greater role for commercial banks in gold financing, purchasing and even exporting.

Proposals also include allowing individuals to buy gold directly from producers.

Date: Wed Jun 11 1997 13:38
Byron @ Waiting for 106:>(@ Waiting for 106:):
What will it take to get the XAU through the 106+ area? Friday's expirations

Date: Wed Jun 11 1997 13:40
Gery Gerhard.Fuehring@blackbox>(Gerhard.Fuehring@blackbox):
George s. Cole: Gold stocks up. If I remember right gold stocks went up BEFORE the big gold-rally in 1993 started.

Date: Wed Jun 11 1997 13:43
panda @>(@):
Ron Weidner -- see my 13:11.

In the FWIW column, I must climb upon my high horse now. Folks, let us remember that there are copyright laws. URLs are more appropo. No offense Ron, but some folks are posting realllly long articles here. A URL is more than sufficient, IMHO. Personal attacks upon me may now commence! Dismounting my high horse now. :- )

Date: Wed Jun 11 1997 13:44
Fundy Tide>(Tide):
Speed: Mike Sheller has made a valid point but not related to the one that got me into this discussion. Certainly gold functioned very well against a rare event when it was worth $850 for a short time. It has not been a good investment since that time. If there is another similiar event it will be a good investment again. If you only read what is posted here you would think the financial calamity is going to happen this afternoon. The rest of the world are fools, storing paper and investing in mutual funds or buying stocks making 20-30% annually for years now. What morons. Paper is absurd, the world is running out of silver, IT can't last. One day this will all be true for a couple days.

Will you recognize it? Will you be alive when it happens? These IMO are the contrasting questions. Trying to defend why one would park money in a 20-20% paper investment as opposed to waiting for a calamity with money in a wasting investment is absurd. Prior to 1935 it was worth $20.67 for a hundred years. Not too good an investment for a century. That too is a part of history.

Date: Wed Jun 11 1997 13:52
Ron Weidner>(
Panda Sorry, it was in a SI response, and I didn't think most people could access. Also sorry I missed yours. RW

Date: Wed Jun 11 1997 13:59
D.A.: Your zinc market illustration with elaboration was much appreciated. What appears to be a contradiction on the surface, makes more sense when someone explains it.

Date: Wed Jun 11 1997 14:32
panda @>(@):
Ron Weidner -- If my currency were the rubble, er, I mean Ruble, and I were confused with the new $100 bills ( wait till tomorrows introduction of the new Fifty Dollar bills! ) versus the old $100 bills... I think I would want some gold if I could afford it! It seems the mainstay of the 'store of value' in Russia is the U.S. Dollar, specifically the $100 bills. Of course the 'new' bills are counterfeit resistant! :- ) ) It is, none the less, another curious story.... Somehow I don't think the Russian government would be doing this for 'the good of the citizens' though.

Date: Wed Jun 11 1997 14:41
Speed @lunch>(@lunch):
Fundy: 1. Gold has had some good moves since 1981. In 1993 for instance, gold and gold shares staged a nice up move. If you were astute enough to buy in late 1995 and get out in about May of 1996, you made some money. Call it trading vs. investing, but it's still profit.
2. Stocks have been on a tear for 6 years which is an anomaly, historically. There should have been at least one 20% correction somewhere in there and several 10% corrections. They haven't happened. Will this new paradigm continue? I don't think so.
3. Gold at 20.67 for 100 years was a good investment because during most of that time, prices went down ( deflation ) increasing the purchasing power of the gold. The point is moot, because Joe average citizen couldn't invest in stocks for most of that time anyway. He was ducking arrows, investing in 40 acres and a mule, etc.
4. I invest in more than bullion and mining shares. I've made and lost money on semiconductor stocks, energy services, a growing P&C Insurance company to name a few. I'm in gold primarily because I believe the new paradigm is bunch of bologna ( baloney ) .
5. The next 5 years will be very different from the last twenty and I'll bet that gold looks very good, while you take the paper side. Time will tell which of us made the right call.

Date: Wed Jun 11 1997 14:43
REB na>(na):
Re gold leasing: One of the knocks re gold is that it pays no interest. Isn't gold leasing a means of letting it do that? If someone likes gold as a store of value, but also wants to collect interest and not keep it around the house, it could be lent to someone else to be repaid later with interest. Obviously this means credit risk is assumed, but that's a reasonable business decision.

I suppose the difference between gold debt and dollar debt is that the fed can't print gold to fulfill its role of lender of last resort as it can with the dollar.

Date: Wed Jun 11 1997 14:51
panda @reverse.alchemy!>(@reverse.alchemy!):
REB, Speed -- What a concept, turning gold in to paper!!! :- ) )

Date: Wed Jun 11 1997 14:57
Fundy Uping Anchor>(Uping Anchor):
Speed: 1. Trading gold is a full time activity and not an investment except maybe a one day investment. If you can do it do it.
2. The current correctionless stock market is no more an anomoly than the $850 gold and I agree it won''t continue for ever.
3. The average Joe couldn't come up with the $20.67 for a lot of gold either.
4. Don't understand your use of the term new paradign. I have only lost money in bullion and oil. Doing well currently in banks, communications, oil, and pipelines.

5. I'm fully invested since 1991 so I'm up about 350% in non precious metals and still waiting for the calamity to move the bullion and
mining shares. Move them up.

Leaving Fundy with the Tide as it happens. Talk to you latter.

Date: Wed Jun 11 1997 14:58
yellowdog @APH>(@APH):
APH: if you're lurking out there somewhere, please repost the XAU level that would change your mind about it going down to the mid 90's. I was looking at several charts last night, and , I am convinced it wont go down much further from this point, but , then again, it doesn't always behave like I particularly want it to.

Date: Wed Jun 11 1997 15:15
RT @weekly XAU w/lots of goodies>(@weekly XAU w/lots of goodies):
Much to chew on; anyone TA person want to study and post a stab at where we might be going? ( click on icon ) :

Date: Wed Jun 11 1997 15:22
ted butler @ the markets>(@ the markets):

Your zinc post was appreciated, as are all you posts. As you know I feel strongly about the precious metal loans, and I hope you didn't think I was implying that they were the driving factor in all other markets. As far as I know they are peculiar to the PMs. You did raise a point that I've contemplated for years, namely the observation that nowadays a commodity seems to scrape bottom price wise until inventory levels become so critical that the price goes perpendicular. While it very well may be for the reasons you suggest, I'd like you to consider another. That is, that because the price is set in the paper areana, on and off exchange, in the great struggle between the dealers and the large spec funds, the price is no longer discovered in the usual sense, i.e., following developments in the real cash market. What I'm suggesting is that the price is set first, then supply and demand adjust to it. This would explain how inventories of a commodity like zinc could decline over a long period of time with no impact on price, because any individual zinc producer or consumer would have marginal impact on price if a huge paper battle was being waged that resulted in a certain price level.

Let's look at a more personal example, silver. As you indicted about a week ago, along with RJ, bw and others ( me included in spirit, if not word ) a sharp rise could come as the battle was joined between the spec funds and the dealers, and there were all sorts of option expirations and positions taken and key technical trigger points. While it doesn't look like there will be any fireworks before friday ( and it breaks my heart ) , it was clear to all that the outcome was certainly not going to be over any changes in silver fundamentals. Hell, you know they're as bullish as can be. It had to with which warring group was going to get the upper hand. Unfortunately, the group I bet on didn't win. Too bad. But my point is this condition, which you know of in more detail than I do, while short term in this example, is symptomatic of all the markets and can result in long term cash market distortions if the paper battle is long term in nature. In other words, if the dealer community continuously floods a market with paper contracts to thwart the specs and succeeds in driving the price down over a long period of time, as production and consumption adjust, inventories will decline to eventually the critical level, and then we explode in price. You are right that this is not the way we learned economics.

Date: Wed Jun 11 1997 15:39
George s. Cole XAU>(XAU):
GERY: You are correct; gold stocks did lead bullion up in 1993. I suspect the same thing will happen this year. Still yoo early to tell if today's upward thrust will be sustained though.

Just to point out how cheap gold stocks are today versus the overall market. The XAU would have to climb to 140 to establish the same relationship to the Dow Industrials as prevailed at the BEGINNING of the 1993 gold bull. It would have to approach 300 to establish the relationship that prevailed at the END of the 1993 bull ( assuming the Dow remains at 7500 ) .

Date: Wed Jun 11 1997 16:09
TED @capebreton>(@capebreton):
Back from the woods and see I missed alot...Comex Gold+Silver @ UNCH but Platinum+Palladium resumed upward thrust as did the trusty old DOW..up 36.56 ...XAU up 1.23...How many people have missed the entire 13 year Bull market by thinking the sky is goin ta fall?...Some day YOU will be right!

Date: Wed Jun 11 1997 16:09
Blonde @Platinum>(@Platinum):
D.A. Thank you for the caution re Phoenix Gold. Your posts today have been helpful as well. Do you see an imbalance between supply and demand of PGM's in the intermediate term? ( say 1-2 years ) . I'm confused as to why the US mint would choose this time to issue platinum coins if there is an impending supply problem with such an important metal.

Date: Wed Jun 11 1997 16:17
TED @ocean>(@ocean):
Tort: Just read yer e-mail...when do ya want me ta make the hit...and how will I know if it's the right broker?...They all look the same...Will try and get somethin off after diner which I am now makin...On the menu: Greek Cauliflower and Bulghur Pilav...HI FRONT!

Date: Wed Jun 11 1997 16:24
APH '''''''''''''''''''''''''''>('''''''''''''''''''''''''''):
YellowDog - I would like to see the XAU close above 105 with Fidelity Select Gold ( FSAGX ) up at least .30 at the same time. Today for example XAU was up 150+ points while FSAGX was up a couple points and down .02 at 3 pm. This tells me the XAU isn't going to break out now. At best its sideways to down.

Date: Wed Jun 11 1997 16:25
Ted of Scaterie - I'm Back! Yea, I know, tough life Mooney with those long hours, but it's 93 degrees in the shade in T.O., all of a sudden, and that kinda slows down the average person's metabolism to the point that they say, forget it, we'll look at houses another day, it is just too darn hot to think straight!
Ted of Gold Loan fame. - Another excellent thought provoking post at 15:22. Certain grains of truth there.
George ( of 'kingly' fame ) - Considering that we generally do take past occurrences and project that they will repeat themselves, ( with slight variations ) in the future, your theory is sound. However, the unexpected also happens quite frequently and perhaps Mr. Butler's ruminations may prove correct in this case. Time will tell, but certainly, if the Platinum storey repeats in Gold and Silver the physicals will, in this instance, lead the stocks.

Date: Wed Jun 11 1997 16:29
Very few things happen at the right time, and the rest do not happen at all; the conscientious historian will correct these defects. -- Herodotus

Date: Wed Jun 11 1997 16:39
TED @mooney>(@mooney):
Mooney: Good excuse....hahaha's too hot...hahaha..

Date: Wed Jun 11 1997 16:53
Novice: Sent ya an e-mail this mornin but made the mistake of sending it to the office...Does anyone out there work....At least Mooney drove around for a while and faked it...Front: What a beautiful day on the ocean and your river must be great on such a hot day!...but please slow down a bit and smell the roses...

Date: Wed Jun 11 1997 16:57
Mooney @16:29: Loved that quote. A lot. I have committed it to memory and will slip it back in here ( without attribution ) in few a months after everyone else has forgotten. ........ ( :- ) )

Date: Wed Jun 11 1997 16:58
Jack Fundy>(Fundy):

Fundy: Seem's to be the impression that stocks ( of the
non Precious Metal variety ) do nothing but go up. I
believe that with some 30,000+ listed securities
out†there, the ability to pick the right one ( s ) becomes
limited. As for the 4000 Mutual Funds, their
advertisements do not attract; as they have to pick
from the 30,000+ listed securities. This is not to
conclude that it is impossible to find -then buy- a good
stock, it's just difficult. In sum, they go up and down;
just like their gold stock cousins.

Date: Wed Jun 11 1997 17:19
George S. Cole gold rally>(gold rally):
I was premature in my gold stock comments. Most of the stocks I follow went up, but both Fidelity gold funds were down. Today's rally was much narrower than I thought. APH is correct -- XAU, HUI, and FSAGX must move up together if a rally is to have a chance of sustaining itself.

MOONEY: Perhaps it will be different this time with bullion leading the stocks. But my bet still is that the stocks will lead.

Date: Wed Jun 11 1997 17:27
Richard Burke Whereto XAU>(Whereto XAU):
Two necessary conditions for the break-out of the XAU have not occured yet - a major volume day for ABX ( 2,000,000 or more, preferably 3,000,000 or more ) ; and the difference between spot gold and the xau getting up over 250 ( see Kaplan ) . For the latter to happen gold is going to have to lead the xau up, and this is usually not the case, or the xau is going to drop to about 90 first if gold continues its basing at current levels. I know some of you feel that gold will in fact lead the xau this time and that a number of you are reading a basing movement which could result in a break-out. I know that George Cole is not expecting a break-out until later in the summer. Any comments?

Date: Wed Jun 11 1997 17:43
bw us real estate:>(us real estate:):
At least this is a real asset. The problem is it's nominal value has been vastly inflated by our ongoing credit bubble. Should the price of your 200,000 dollar house ( which was worth 25,000 fourty years ago ) fall to say 50,000 you may be little affected. However if you have a 150,000 loan and must sell you will be hurt big time. What might cause such a drop in nominal value? Ten percent or more of the residential housing in this country is unoccupied at any time. Some people own more than one home which they do not rent. When times get hard this will end. Suppose you have a large house, say 3000 sq feet. Your neighbor has the same. You both get layed off for what looks like a very long time. Want to cut your housing expenses by 50%? Just sell one house and you both have 1500 sq feet to live in ( three chinese families could live comfortably here ) and split all the expenses of one house. Hey, it might even be fun depending on your neighbor. Never happen you say. Not today, but times change. In terms of square feet we are the most over housed people in the history of the world. Its my feeling when the crunch comes you will be able to buy your dream house for a few thousand ounces of silver. Yes this does require a indeterminate wait.

Date: Wed Jun 11 1997 18:13
The Sultan of Credit And we sent our best men>(And we sent our best men):

We have successfully kept the lid on precious metal
prices over the past several years. Our hope was, that
by doing such; that eventually a huge gold strike would
occur, and allow us to prosper, with our credit scheme.

We sent our best and brightest to Indonesia, only to find

We are sure that some one is ploting against us.

Please god have mercy on our soul's, so we may spread our
paper promises to all men of good faith and feed our

Date: Wed Jun 11 1997 18:26
squinch al>(al): least Greenspan has some good, iffin' he'd just make that leap away from paper...

Date: Wed Jun 11 1997 19:05
Steve Puetz>(
PANDA: Sounds like you're proposing we use the bigger-fool theory to push up the S&P futures. Leave me out! But do let me know when you all have bought.

Date: Wed Jun 11 1997 19:06
Steve Puetz>(
BW: Well said @ 9:04 a.m.

Date: Wed Jun 11 1997 19:10
Steve Puetz>(
LAN MAN: 40% of the market value of all residential homes are loaned out. That include retired people who have paid off their mortgage. If you onlt include baby-boomers, it's probably more like 85% of the market value that is mortgaged. I got an add in the mail yesterday, a company in California said they would loan me 125% of the market value of my home!!!

Date: Wed Jun 11 1997 19:12
Steve Puetz>(
REB: Gold and silver pay no interest because they are money. Only credit market instruments pay interest -- to compensate the holder for a variety of risks -- including, loss of purchasing power and risk of default. These are not risk associated with owning the precious metals.

Date: Wed Jun 11 1997 19:18
Fundy Leaving>(Leaving):
Jack: It isn't that hard to do. As a Canadian I trade the TSE mostly and the number of good companies is relatively as well as absolutely limited. Anyone with the wherewithall to connect up to Kitco can identify the 50-60 good companies in a day's work. There is a publication that will do it for your called the Investment Reporter I believe.

Date: Wed Jun 11 1997 19:24
junior TA of XAU>(TA of XAU):
Everything says that the XAU bottomed at the end of April. The correction was ~60 % which is a nice correction. Indicators all point to up. On the very short term we may be slightly high. The best part is that if we are going up it will be big . We will have several days of 2 and 3 points. Wave structures are inconclusive right here. More later

Date: Wed Jun 11 1997 19:35
Fundy Correction>(Correction):
Jack: Its call Investors Digest.

Date: Wed Jun 11 1997 19:42
Hey junior- you got my vote for this week!!!

June is June is June, there ain't nothin like June for a dead gold month.

Tally HO

Date: Wed Jun 11 1997 19:42
Front @upandatum>(@upandatum):


Thanks for the concern. I took your advise and tried to take it easier however, I fell asleep while thinking about slowing down. My guess is that helped. My gut spoke to me today ... no logic at all ... just a hunch ... now full into metals.


Was it even too hot for the topless girls? Understand you're having the same problenms as we are with the ladies of the night advertising in a different, forthright, fashion ( or lack thereof! ) .

Toplessness! This is going to be great for the tourism business this summer, isn't it! Sweden of North America !


Date: Wed Jun 11 1997 19:44
To read a sample issue of the Dines Letter, and excellent gold oriented newsletter in the internet, try

Date: Wed Jun 11 1997 19:45
Byron @ Throwing Darts:>(@ Throwing Darts:):
RT: Re: XAU and TA - Please see

Date: Wed Jun 11 1997 19:53
I know it's not right to bragg, and normally I do not, but since I was the only person anywhere calling for the DOW to hit 7500 before the end of June, ( Stated in April, about 100 full S&P points ago, here in Kitco ) allow me one I told you so.

Date: Wed Jun 11 1997 19:56
Speed @home>(@home):
Glenn: Well done! Now then, what's next? Or, at least tell us some more about the trading pits.

Date: Wed Jun 11 1997 20:01
Glenn Au>(Au):
Today was the deadest day I have seen so far in Gold. It was really boring. The trend in Gold is still down and the trend in stocks is still up. The intermediate trend at the very least shall chance, ( With Gold up and stocks down ) in a few more weeks, say at least 2 more but no more than 5 )

Date: Wed Jun 11 1997 20:07
Glenn: I hope this gold trend ends soon. My mining shares are taking a pounding. I feel like Chuck Wepner ( if you know anything about heavyweight boxing ) .

Date: Wed Jun 11 1997 20:09
Glenn: oh well ... I only have a small % of my portfolio in mining stocks ( everything else is up ) . I guess I can't complain. I think I might buy more. The timing may be right to buy when everyone, including myself, is losing hope.

Date: Wed Jun 11 1997 20:09
Byron @ Hmmmmm:>(@ Hmmmmm:):
On the daily Dow Jones Industrial chart, it sure appears that the Dow is now putting in a 9th wave up from the April 14th bottom. : )

Date: Wed Jun 11 1997 20:11
Mooney @Front>(@Front):
I take it Mr. Front that you were not at all affronted by the Front page of today's Toronto Sun newspaper ( ? ) which featured two buxom topless young ladies suntanning down at the Beaches area of Toronto. SAY! Now I know why Selby goes for a walk there everyday he can! Ladies of the night? ( In Muskeg Territory? )

Date: Wed Jun 11 1997 20:14
Mooney @Byron!>(@Byron!):
Sorry Byron! Didn't mean to be talking topless at the same time as you're talking top of the market!

Date: Wed Jun 11 1997 20:15
TED @ewp>(@ewp):
EWP ( 20:07 ) I remember Chuck the human punching bag...but could he take a punch!

Date: Wed Jun 11 1997 20:15
philby Oregon>(Oregon):
Maybe this scenario doesn't make sense, but what if the central banks entered into a formal agreement to revalue all gold holdings to say $400 per ounze, and just admit the fact of long term monetary inflation? Also, since it seems the CB's want to get out of the gold holding business, to agree to a 50 year plan to liquidate holdings, say at 2% max sales per year. Would this help the euro dollar/emu situation to stay on schedule, increase gold sales income to CB's and also create a smooth transition to the gold markets with little damage to mining companies and investors. Periodically the value of gold could be adjusted to the true market value. Does this make sense, and what would happen to the value of gold in the market place if the CB's did this

Date: Wed Jun 11 1997 20:20
M.Graves @ Valley>(@ Valley):
Maybe this is the calm before the storm. This paper bubble can't take much more, or can it?Who's got the needle ?

Date: Wed Jun 11 1997 20:21
TED @thegoodlife>(@thegoodlife):
Mooney: Hasn't it cooled off enough to show houses NOW...Front: We made it past hump day and weekend is in sight...Tort: What's yer take on tonights action in Gold and in the windy city...GO JAZZ!

Date: Wed Jun 11 1997 20:29
EMU @London>(@London):
This may be of interest of those of you who are debating the ECU

New EC Regulations
The European Commission have just announced an agreement whereby
will be the official language of the EU rather than German, which was
other possibility. As part of the negotiations, Her Majesty's
conceded that English spelling had some room for improvement and has
accepted a 5 year phase-in plan that would be known as EuroEnglish:
In the first year, s will replace the soft c.. Sertainly, this will
the sivil sevants jump with joy. The hard c will be dropped in favor
the k. This should klear up konfusion and keyboards kan have 1 less

There will be growing publik enthusiasm in the sekond year, when the
troublesome ph will be replaced with the f. This will make words
fotograf 20% shorter.

In the third year, publik akseptanse of the new spelling kan be
expekted to
reach the stage where more komplikated changes are possible.
will enkorage the removal of double letters, which have always ben a
deterent to akurate speling.

Also, al wil agre that the horible mes of the silent e's in the
is disgraceful, and they should go away.

By the fourth yar, peopl wil be reseptiv to steps such as replasing
with z and w with v. During ze fifz year, ze unesesary o kan be
dropd from vords kontaiining ou and similar changes vud of kors be
to ozer kombinations of leters.

After zis fifz yer, ve vil hav a reli sensibl riten styl. Zer vil be no
trubls or difikultis and evrivun vil find it ezi tu understand ech


Date: Wed Jun 11 1997 20:32
Tortfeasor mhurst@ix.netcom.>(mhurst@ix.netcom.):
Gold and silver have been boring me today. I need excitement in my life. Ted, got your excellent epistle, have responded in kind. Jazz will whip Bulls in SLC tonight then will have to win one of two. I predict Jazz in 7. I further predict another boring day tomorrow in the metals.

Date: Wed Jun 11 1997 20:34
Steve Puetz @ Byron>(@ Byron):
Alan Abelson calls it the centipede bull market -- because it has so many legs.

Date: Wed Jun 11 1997 20:37
Ted: me too! My friends and I laugh when we lose money! What else can you do.

Date: Wed Jun 11 1997 20:40
Byron @ The Public Library>(@ The Public Library):
Mooney: I'll take any signals which come my way.:- )

Date: Wed Jun 11 1997 20:43
Byron @ At The Top (more or less)>(@ At The Top (more or less)):
Mr. Puetz: This centipede only has 9 legs! ( :* ) ) ) ) ) ) ) ) )

Date: Wed Jun 11 1997 20:47
fifz gam @ salt lak sit>(@ salt lak sit):
Jaz vil vin in 6...

Date: Wed Jun 11 1997 20:50
WW New England>(New England):
What does anyone think of the Dec. Silver $6.00 calls which expire in Nov. at $250.00 or less.?

Date: Wed Jun 11 1997 20:51
PB somewhere out there>(somewhere out there):
RJ: I take it you don't believe in the sun ether?

Mike Sheller: I was quoting Gurudas who refers to Alice Bailey. Who is she? It says here that her book is Esoteric Astrology, but I'm sure I'm getting off topic.


P.S.: I love all you guys. I've been lurking for over a year but RJ's comments brought me into the light. Somehow I couldn't resist.

Date: Wed Jun 11 1997 20:53
Richard Burke>(
Jack: Both the Investment Reporter and the Investors Digest have been recommended to you on this site. They are two different publications obtainable from the same source. Both are Canadian. The Reporter has a selection of Key Stocks and recommends several for income purposes and several for growth purposes from the list each month depending on what should be moving. They include about 50 US stocks. They recently won a US award for picking stocks that gave the best return. The Digest is a biweekly ( I think ) compendium of brokerage house analyses and recommendations. I subscribe to both and find them useful. The Reporter recently had an article on gold stocks with a selected list and a discussion on when to buy - later they said. I can't recall the publisher's name right now, but could fax or e-mail it to you if you e-mail me your numbers. It doesn't show on my e-mail address, but there is an underline between richard and burke, i.e. richard_burke.

Date: Wed Jun 11 1997 20:53
Earl Jr. @eldont>(@eldont):
IMHO: Bla bla bla bla bla

Date: Wed Jun 11 1997 20:54
Byron @ The Closing:>(@ The Closing:):
Library is closing. Nite All!

Date: Wed Jun 11 1997 21:01
Richard Burke WOW!>(WOW!):
EMU: the tears are still pouring down my face. I have'nt read anything so funny in a long time. The Saints preserve us from new spelling!

Date: Wed Jun 11 1997 21:05
RJ Keep reading>(Keep reading):
Front - Were did the figure of $512.50 come from? Iíve been doing mathematical contortions all day trying to figure it out. You are correct, I asked for refutation, but the statement that now has been done is but cold satisfaction with no data to back it up. You said something about ignoring over $800 gold and comparing unlike fruits. Keep watch for a soon to follow post, you will find it interesting.

Let me proclaim now from the mountaintop! Hear me in every bazaar! Hush your restless whispers, be still in the pews, and behold: You are all right! Gold is very undervalued now. It is a great buy! It is even better than many of you realize! You will note that my argument to this point has been that gold has proven to be a very poor buy and hold investment. Gold has been a rubber dinghy with a hole in the bottom. The water leaks in faster than you can bail it out. The weight of all this gold can have you chest deep in a folded yellow boat with the water inexorably inching higher. You will drown holding more than what you consider absolutely necessary for times of disaster ( a very different amount for each person ) .

The key is to not buy gold and hold it. The key is to ( and some of you have probably smelled this coming ) buy gold and sell it!!! Buy low, sell high. Then, either sell short, or wait for a dip and buy it again. If you must own gold, use the profits from your trades to buy your gold. Use your gold to acquire gold. Most of all, don't forget the other metals

I have tried to make my points in a linear progression. Some of you have conceded a few of my points, others still doubt. OK. Letís ( lets Waite? Let us? ) all agree on some numbers. Lets all speak from a common point of reference. Let us begin this debate in earnest. Yes I have only started. Look for my next post. By the way, my favorite movie is Twelve Angry Men.

Date: Wed Jun 11 1997 21:11
IMHO, ( for you Jr. ) ...... Back to Philby. The banks can put whatever value on gold that pleases them but as long as there remains an open market, the market will determine the price. Very much like interest rates. The market controls those as well. ...... The only way they can maintain control is if they confiscate the metal and ban individual possesion.

Date: Wed Jun 11 1997 21:13
Mike Sheller - 06:16 - By far the most enjoyable posting I have ever read from these hallow halls. I laughed out loud. Your second posting - 08:35 - was well reasoned and wise. Let me offer my highest form of praise: You are a man who thinks the next thought. I sense a kindred spirit.

Date: Wed Jun 11 1997 21:14
Larry The race has begun>(The race has begun):
I haven't seen too many comments about the most obvious and possible most reliable indicator in the universe. What are the chances of 'Touch of Gold' and 'Silver Charm' coming in 1-2 in the Belmont. This is an obvious sign from whoever is in charge.

While a good analyst can evaluate indicators, a great analyst knows which indicators are real. You have been alerted, so make the most of it.

Date: Wed Jun 11 1997 21:18
RJ I do belive>(I do belive):
PB - I have always believed in the Sun Ether. I just never had a face for my faith. Thank you for enlightening me. I feel sooooo warm...........

Date: Wed Jun 11 1997 21:22
Jr. : Please check out EMU @20:29. Consider it the first step to adult communication. BTW, IMHO, your vocabulary has shrunk. It was much deeper and more colorful the other day.

Date: Wed Jun 11 1997 21:28
RJ OK, Lets have it>(OK, Lets have it):
Have some pity on the new guy. What is IMHO? Iím Mad as Hell Over this? I Must be Holding to much, Overbought? IMagine Hanging Ourselves? The Independent Metals Holistic Organization? Incurably Mentally Handicapped Other-worlders? Are you guys even human? What have I gotten myself into.....

Date: Wed Jun 11 1997 21:32
RJ: LOL. .. Nah! Nothing as clever as that. Merely, shorthand for a popular form of literary affectation; In My Humble Opinion. Often seen with variants. ......... ( :- ) )

Date: Wed Jun 11 1997 21:33
RJ Is it Newspeak?>(Is it Newspeak?):
A hilarious if somewhat Orwellian post!

Date: Wed Jun 11 1997 21:38
RJ Forgot my manners>(Forgot my manners):
Prior to EMU. Hmmm EMU, is that the same as the bird? You know long neck, knobby knees, ostrich like?

Date: Wed Jun 11 1997 21:41
vronsky Twelve Angry Men. >(Twelve Angry Men. ):
RJ: It is also one of my 10 favorites of all time. Was It Fonda? Its been many a year since I last saw it.

Date: Wed Jun 11 1997 21:41
LOL..... Loud, Overbearing, and Lillylivered? Hey, Iím new at this.

Date: Wed Jun 11 1997 21:43
RJ: Who me? Nah! I tend more toward pompous than Orwelian. ..... Lest we become distracted from the evening's ( evenings ) business; I agree with your earlier post. .... A trite expression, Fall in love with your women, not your investments. .... Personal experience has cast a doubt on the advisability of the first statement as well.

Date: Wed Jun 11 1997 21:44
RJ - Of course I was referring to the TWELVE ANGRY MEN.

Date: Wed Jun 11 1997 21:48
Eldorado @the scene>(@the scene):
RJ -- Re: your 21:05. Last three paragraphs: Now your talkin'!

Date: Wed Jun 11 1997 21:48
Speed @home>(@home):
RJ: LOL - lots of luck BTW- By the way Also try the emoticons like ; )

Date: Wed Jun 11 1997 21:49
RJ: Laughing Out Loud. ..... had an addition to your list but it was too salacious for a straight laced group like this. .... Before this becomes too tedious: BTW = By the way. .... and that should complete the most commonly used shorthand.

Date: Wed Jun 11 1997 21:50
RJ Vronsky>(Vronsky):
Vronsky - someone thought you were me. ( 00:36 ) I hope this puts and end to all such rumors. After all you couldnít even remember that it was: Henry Fonda, E.G.Marshall, Jack Klugman, and the Loud Overbearing, Lillyliverd guy.. .. who was he? You know, the last guy to fold. Little help here.

Date: Wed Jun 11 1997 21:51
Speed uh oh>( uh oh):
Earl: We better get together on this or the new guy will think we're pulling his leg. : )

Date: Wed Jun 11 1997 21:51
Front @upandatum>(@upandatum):


Sorry to have been a burden to your calculator.


You get an AVERAGE by adding the numbers and then dividing by the number of items added i.e......

$327 + $716 = $1043 / 2 = $521.50

You quoted the word average. I thought you knew how to achieve it . Obviously I was mistaken. I'm sorry. My mistake.


Date: Wed Jun 11 1997 21:53
EMU: Ref: Date: Wed Jun 11 1997 20:29 -- EMU ( @London ) : Many thank you's for relieving a tediously long and tiresome day. That was brilliant and very funny rhetoric.

Date: Wed Jun 11 1997 21:53
RJ who you winkin' at>(who you winkin' at):
Earl - thanks, I feel up to speed now. Hey a new one! UTSN. is that allowed? can I just make something up like that, or am I crossing over the line here?

Date: Wed Jun 11 1997 21:54
RJ You took the bait>(You took the bait):
Front - stand by.............

Date: Wed Jun 11 1997 21:57
Speed: Wasn't aware LOL had that connotation. .... Geeez, if we can't handle a few contractions, how do you think the europeans will handle EMU's new English?

Date: Wed Jun 11 1997 22:01
APH .............................>(.............................):
S&P Cash - Last night ( 6/10 19:56 ) I posted that Wave III being 2.618 x Wave I on a monthly chart would project a high at 870.70. Today's cash high was 870.66. Close enough. We should go down into the 39 week cycle low due end of June early July.

Date: Wed Jun 11 1997 22:01
RJ: You would do me a disfeavor by mistaking politeness for memory lapse. But apart from that, perhaps, you are referring to Lee J. Cobb ( his Hollywood name ) - which was a drastic contraction of his real ethnic name.

Date: Wed Jun 11 1997 22:05
RJ: No, not really. And yes, you would be crossing over the line. It should become a part of the idiom ( gonna regret that word ) by common assent. .... But what the hell; you've ( you have ) already broken all rigidly held standards of decorum here anyway so ..... by all means, continue. .......

Date: Wed Jun 11 1997 22:05
Speed this is fun>(this is fun):
Earl: Ve vill haf order und discipline here!
Remember Hogan's Heros? Those terrible German accents. I read EWP's post in that tone and laughed out loud.

Date: Wed Jun 11 1997 22:11
APH: Are you saying that the time has arrived to consider some bearish derivative instruments? Like puts 'n things? If you are prone to such; what strike and time?

Date: Wed Jun 11 1997 22:14
Speed ooops>(ooops):
I meant EMU not EWP, sorry.

Date: Wed Jun 11 1997 22:18
Speed: Und zen ve vill haf ze bratwurst und bier. Ya. Mucho cervesa, muy bien.

Date: Wed Jun 11 1997 22:18
panda @>(@):
Steve Puetz -- You've seen what I've done to the gold sector by buying in to it, wait till I get to the S&P! :- ) )

Front -- I'm on my way to see the public display in your area!

RJ -- ROTFL........ Rolling On The Floor Laughing :- ) )

Date: Wed Jun 11 1997 22:19
Front @upandatum>(@upandatum):


To quote:

The key is to not buy gold and hold it. The key is to ( and some of you have probably smelled this coming ) buy gold and sell it!!! Buy low, sell high. Then, either sell short, or wait for a dip and buy it again. If you must own gold, use the profits from your trades to buy your gold. Use your gold to acquire gold. Most of all, don't forget the other metals

Sit down for's BIG.... That's exactly the point I was expressing in my post this morning. If we had sold when Gold was at $800 we would have had a profit.

Does this mean we agree? Oh GOD! What have I wrought !

TTFN ( :- )

Date: Wed Jun 11 1997 22:22
Eldorado @the scene>(@the scene):
Panda -- What? You never thought you could make a price drop just by buying it? Shame on you for your short-sightedness! ( All in jest! )

Date: Wed Jun 11 1997 22:24
Front @upandatum>(@upandatum):

Mooney: Sorry but I missed it in the paper. Save it for me? Or have you already dribbled over it too much? The up here I was referring to was Ottawa. Personally, I knew this would happen as soon as they wanted to burn their bras. Shouldn't have given them the vote either! Must be Liberals !

TED: Sorry to leave you out of the view of the lovely ladies in Ontario, but according to you, those socialists are not much to look at eh! Well, if it catchs on in Cape Breton, maybe they will .......

Date: Wed Jun 11 1997 22:34
Nothing interesting going on in the gold and silver market! Oh well ... a couple of interesting annual meetings on June 20th ( I think ) .

Date: Wed Jun 11 1997 22:35
Vieserre home>(home):
EMU: vel Done : ) ) ) ) )

Date: Wed Jun 11 1997 22:35
panda @>(@):
Just a silly thought here, but at what point does the credit system implode or explode? If a currency is continually debased over time due to 'inflation', where and when does it stop? Is it asymptotically, as we approach one over zero ( 1/0 ) ? When a car costs $500,000 and gold is still at $340, or will gold go to $50/oz? At some point the credit system must 'fail'. One only has to look at the rising bankruptcy rate in a 'good' economy, and question some fundamental tenants presented by the gold bears.

One could write a lot of 'paper', and drive down the 'price' of gold to whatever, but in the end, isn't it about storing ones labor for future use? How does the credit system protect this when it is trying to constantly 'discover' the 'correct' interest rate ( lagging ) to preserve your purchasing power? BTW, it seems to do this poorly, or is that because of taxes?

Date: Wed Jun 11 1997 22:36
RJ I was being generous>(I was being generous):
OKÖ Following are US Government CPI statistics. I think we can all agree that, if anything, the government understates these statistics. Also included are high and low gold prices for each of the last 20 years - provided by the Future Source, you read their FWN reports on the Kitco link. Note these numbers include $825 gold as well as $127 gold, hardly cherry picking my numbers.
I have added up the lows and highs and divided by 20. Who thinks this is a more accurate way to arrive at an average? Front, if you want to get snippy, Iíll let you be wrong at the top of your voice. My post to your carried none of the hostility contained in yours. But I guess this one does. I have also taken the low and high for the year and used the somewhat simplistic frontage method and then averaged those.

As all can see, I was being extremely generous assuming a 4% per year for the last 20 years. The actual average for the last 46 years is 4.1%! As can be seen, the last twenty years have averaged no less than 5.2%. I had no figures for 1995 and 1996 so followed the 2.7% trend of the two prior years, I expect no objections to that.

OK, lets move on, one 1950 dollar is today worth 15 cents, or, conversely one 1950 dollar had the same purchasing power that $6.62 does today. What was gold in 1950? According to the Kitco history of London fixes, $34.72. OK letís call it $35, Iím not picky. What is 35 x 6.62? Lets call it $232. Gold is now $344 or thereabouts. 232 / 344 = 67.4 % return on a FORTY SIX YEAR INVESTMENT! Remember, 7% compounded doubles in 10 years.

One 1977 dollar is now worth 37 cents. One 1977 dollar buys $2.72 today. Using the low of 1977, and again, I am trying to be kind, higher numbers only make it worse, $127 / .37 = $343.24. Isnít that just slightly lower than todayís close? Break even in 20 years? When those dollars have depreciated by almost two thirds? I leave the numbers with you. Should anyone like the Excel spreadsheet, e-mail me at and I will send it to you. Feel free to delve into the formulas to see what mathematical trickery I use. This is the common reference point I mentioned in an earlier post. I have quoted the source of these numbers, if anyone offers different, please do the same. Maybe someone can teach me how to post a file or image?

1950 5.8% $1.06
1951 5.9% $1.12
1952 0.9% $1.13
1953 0.6% $1.14
1954 -0.5% $1.13
1955 0.4% $1.14
1956 2.9% $1.17
1957 3.0% $1.20
1958 1.8% $1.23
1959 1.5% $1.24
1960 1.5% $1.26
1961 0.7% $1.27
1962 1.2% $1.29
1963 1.6% $1.31
1964 1.2% $1.32
1965 1.9% $1.35
1966 3.2% $1.39
1967 3.0% $1.43
1968 4.7% $1.50
1969 6.1% $1.59
1970 5.5% $1.68
1971 3.3% $1.74
1972 3.4% $1.79
1973 8.8% $1.95
1974 12.2% $2.19
1975 7.0% $2.34
1976 4.0% $2.44
1977 6.8% $2.60 6.8% $1.07 127 168 148
1978 9.0% $2.84 9.0% $1.16 167 245 206
1979 13.1% $3.21 13.1% $1.32 218 518 368
1980 12.6% $3.61 12.6% $1.48 463 825 644
1981 8.9% $3.93 8.9% $1.61 389 597 493
1982 3.9% $4.09 3.9% $1.68 298 486 392
1983 3.8% $4.24 3.8% $1.74 373 510 442
1984 4.0% $4.41 4.0% $1.81 307 405 356
1985 3.8% $4.58 3.8% $1.88 282 349 316
1986 1.1% $4.63 1.1% $1.90 327 443 385
1987 4.4% $4.84 4.4% $1.98 389 502 446
1988 4.4% $5.05 4.4% $2.07 392 487 440
1989 4.7% $5.29 4.7% $2.17 356 419 388
1990 6.1% $5.61 6.1% $2.30 346 425 386
1991 3.1% $5.78 3.1% $2.37 341 403 372
1992 2.9% $5.95 2.9% $2.44 328 362 345
1993 2.7% $6.11 2.7% $2.51 325 414 370
1994 2.7% $6.27 2.7% $2.57 372 401 387
1995 2.7% $6.44 2.7% $2.64 371 398 385
1996 2.7% $6.62 2.7% $2.72 368 417 393
AVERAGE 4.1% $0.15 5.2% $0.37 327 439 383

Date: Wed Jun 11 1997 22:38
Vieserre I Am Getting Leased Out>(I Am Getting Leased Out):
EARL, TED BUTLER: We may see the same thing but the manner in which I have described it may create the illusion of difference.

My prior comments were directed specificially to leases. But, even considering these and other such transactions of which I am aware in a generic sense, I do not dispute that such carry trade, hedging practices, and other shorting type derrivatives or activities can create a powerful latent technical force of cover in the underlying market that if played out over a short time period will unleash a rash of technical buying that should have the probable effect of causing a spike in price of the underlying stuff. And this is one reason why I maintain LT positions in gold equities and am bullish on the market.

What I have tried to suggest that in a perfect academic world these transactions have a double entry bookkeeping quality to them and have have not in any way affected the net supply of the stuff after they have been unwound. Accordingly, after each such transaction is unwound, the net affect on the price over time should be the same as if it had not executed. And any current effect on price will be whether these outstanding transactions are increasing or decreasing in number, and the time frame. Not unlike the effect of future players selling future contracts without the stuff they are selling and then reacquiring it by buying an offsetting contract.

And in many respects it is not much different in concept than a bank loaning out more money than it has in reserves with the adverse consequences engendered by a run on the bank. But as Ted adroitly points out, there are also differences, which I will address in specfic comments to him.

I will refer more directly to each of your comments in subsequent personal posts.

Date: Wed Jun 11 1997 22:40
Vieserre More to Come>(More to Come):

TED BUTLER: I appreciate your thoughtful response, and there is certainly no need for a point by point rebuttal as you rightfully surmised. Moreover, my comments were not intended for argument but for self-enlightenment.

We still have points in contention. I cannot disagree that when metal is released to the market, price is influenced as more metal is being supplied to the marketplace. But I continue to contend that it does not change the supply/demand equation. There is indeed a double
book-keeping entry effect along each step of the lease transaction. And when the metal is sold there is a liability of repurchase created. It cannot be otherwise. To argue otherwise would defeat your position that the reason for the sharp increase in price is due to the
necessity of cover arising from the liability created under the lease transactions.

I accept as fact, arguendo, your contention that there has not been a net repayment of metal loans in their 15 year existence. And I also do not dispute, as mentioned in my earlier post, that if their was a run for cover there should be a sharp escalation in price.

But I am constrained to disagree with your loan classification theory. Loans are made of cars, wheat, houses, and any and all sorts of property. And like, metals, if they cannot be returned because of being loss, destroyed, abandoned, or stolen, the lessor may recover damages for his loss. Accordingly, I see no difference with the metals. If the metals cannot be returned, the obligor has liability for damages for cost of cover. As to why the lease market shut down, I do not know all of the ramifications for this, and I would appreciate your comments on this. But I would assume, as you suggest, there is a limited supply, demand is high, and the lessor does not wish to lose the opportunity of selling a commodity rapidly rising in price by leasing it out for an extended period at a lease rate which cannot be reasonably calculated due to extreme volatility.

In summary, we are in complete agreement with regard to possible price consequences caused by outstanding leases should there be a cover run on the metal, even though we may disagree as to how and why we get there.

Date: Wed Jun 11 1997 22:41
Eldorado @the scene>(@the scene):
RJ -- Re: your 21:05 once more; Hope there is still some physical metal out there to be had once a run-up has occurred. One ( of many ) of the possible reasons for the run-up will be because there isn't! That will be a big reason to already have it on hand, and perhaps to keep it there. Just for a very possible 'bad paper day' type of scenario. IMHO.

Date: Wed Jun 11 1997 22:41
Vieserre The End of The Lease Triology>(The End of The Lease Triology):

EARL: Maestro, my obvious lack of communication skills continues to reveal itself for what I had thought I had expressed is exemplified by exactly what you contend. : )

Date: Wed Jun 11 1997 22:41
I guess a spreadsheet doesn't paste so well. E-mail me for a copy.

Date: Wed Jun 11 1997 22:44
panda @ :-)>(@ :-)):
Eldorado -- I've been working this from the wrong angle. I should be buying SPX calls and shorting the metals. This would cause the market collapse that some are looking for ( not me, oh no! ) and the metals to soar! You see I've got BT beat! I control the paper gold markets, yup. All I have to do is sell my HUI calls and gold will skyrocket! :- ) )

BTW, I guess no one is interested in the spoos tonight.

Date: Wed Jun 11 1997 22:50
Hey Front: C'mon. That bra burning business wasn't without it's compensation. You may have been less than thrilled with the political statement but it did much to change the summertime scenery. .... You know summer? The two weeks when the brass monkey is prominently displayed on the veranda. ...... As well, if you had known ahead of time you would have been prepared to gallantly offer matches and accelerant. ...... ( :- ) )

Date: Wed Jun 11 1997 22:57
Vieserre: No, my son. You have elegantly displayed your bonfides. Feel free to enter the circle of those who know and practice all forms of egregious pomposity. ...... Listening Jr.?

Date: Wed Jun 11 1997 23:00
panda @>(@):
New fifty Dollar bills tomorrow! Courtesy of;

Date: Wed Jun 11 1997 23:02
Eldorado @the scene>(@the scene):
Panda -- When does a credit system implode/explode? For one thing, you have to remember that it is first based upon a debt currency. Makes a BIG difference! Most inflation is thereby based on the prevailing interest rates for 'money', with a bit of time differential. Given that a certain amount of currency has to circulate to have a viable economy, and given that ALL this currency/credit etc. is loaned into existence with the the prevailing interest attached. All of this expanded debt/credit based on promise to pay. This can go on for quite some time until the 'credit-worthiness' of the borrowers falls to such a dismal level that re-payment cannot be had. In our case, exporting decent paying jobs can't help the situation either. An ever expanding mass of bancruptcies ensues as a beginning of the end. How long beyond that for the end? Perhaps the purchasers of all that ill-fated paper find that they don't want to be caught holding the proverbial bag. It just becomes a matter of time. In fact, all debt based money systems begin with the end already written! Lovely, ain't it?

Date: Wed Jun 11 1997 23:03
RJ Personal Affront>(Personal Affront):
Front - I guess I got a little carried away, I apologize.

Date: Wed Jun 11 1997 23:05
panda @>(@):
Well, the precious yellow is being yellow again this evening. Time to say good night.

Date: Wed Jun 11 1997 23:08
RJ: Foul deed most fouly presented! Cannon to left of them, cannon to the right of them; volleyed and thundered ... Having just exhausted my Tennison; .... was it fair to include in your analysis the years 1950 to the mid 1970s when gold was actually released from indentured servitude? Since there would only be a net loss for that period.

Date: Wed Jun 11 1997 23:11
Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )

Date: Wed Jun 11 1997 23:22
RJ: BTW. USTN? Useless Sorts of Typographical Nonesense? Unreleased Sexual Tension, No Uncle Sugar's Tin Nutcan. Right?

Date: Wed Jun 11 1997 23:32
Front @upandatum>(@upandatum):

In my responce to your request for the verification of the figures, I wrote to you in a forthright and honest manner. I saw an error and attempted to say as much. I took the time out of my life to respond to you and yet what did I receive in your responce?

You said something about ignoring over $800 gold and comparing unlike fruits

I'm sorry, but that is being too flippant. Are you absolutely sure I was not expressing a genuine sorry for having taken for granted that you didn't know where the $521.50 came from? I know absolutely nothing about you except that you're called RJ. You could be 13 years old and really interest in stocks. You could be 113 and too old to remember stocks. Who knows. So what should I do? You said you didn't know where I got the number. I explained and apologised for taking you for granted. If you perceive an insult, it is in your mind, not mine. Insulting you would gain nothing since I'm sure you realize that whenever an argument seems lost, name calling becomes the sword. You Sir were mistaken and swung the sword incorrectly in my direction.

You can spout all the numbers from here to eternity. You can post till the keys fail on your keyboard. You can do anything you wish except get into my mind and yet you have assured yourself that that was exactly what I meant and then proceeded to heap name calling on me.
Sorry RJ .... this time YOU blew it .....
If you expect respect, give it.

Date: Wed Jun 11 1997 23:33
RJ Maybe that's it>(Maybe that's it):
Earl - Maybe I do have some USTN. Gott'a do something about it.

Date: Wed Jun 11 1997 23:34
Front @upandatum>(@upandatum):


I was typing my lastest when you were posting.

If I had seen your apology I would not have written.

I to apologise.


Date: Wed Jun 11 1997 23:40
RJ: Yeah. I know what you mean. Like Magic Johnson's AIDs, it's easily
attained. And on a site like this, there's no tellin' what a guy'll pick up if'n he ain't careful. Like that USTN. Hear it's pretty much endemic.

Date: Wed Jun 11 1997 23:42
RJ Peace>(Peace):
Front - In case you did not notice, I apologized B4 your most recent. But you have a right to your response. I may be wrong sometimes, but I seldom stay wrong for long. You know nothing of me, nor I of you. I would hope that the sum of my arguments paints a picture of knowledge. In the passion of the moment, I sometimes forget that a sharp tongue cuts both ways, and a civil word begets civility

Date: Wed Jun 11 1997 23:43
Front @upandatum>(@upandatum):


I was referring to the young lady on local TV last night. She and a friend were washing store windows, exposing themselves, apparently to see some reaction from passerbys. When they interviewed her, she said she was hot and so disrobed. I can accept that and as you say might have helped some of them if only I had known. The problem was that this young lady had on a collar. Not just any collar mind you but it looked like a collar a dog called SPIKE might use. It had domination written all over it believe me. My immediate thought was why she would wear it and then it hit me that she was protecting herself from those who disapproved. Tough life when you must wear a dog collar in order to expose your breasts even when legal!

Panda: Com'on up....bring your wallet .... we need the money ever since the damn socialists put us soooo much in the hole. We're going to start charging by the ounce !


Date: Wed Jun 11 1997 23:47
Front: What's next. Chains required, whips optional? ..... but oh my goodness, you do get me excited when you talk like that. Do go on. .... ( :- ) )

Date: Wed Jun 11 1997 23:49
Front @upandatum>(@upandatum):


Can't...must change hands ....


Date: Wed Jun 11 1997 23:51
Front: ROTL!! ... What are the present limits of propriety and are we approaching them?

Date: Wed Jun 11 1997 23:53
Front @upandatum>(@upandatum):


Passed 'em 8 minutes ago....
Off to bed ....
Pleasant dreams....


Date: Wed Jun 11 1997 23:53
Eldorado @the scene>(@the scene):
Front -- Re: the topless 'women'; Next, the government will make a law imprisoning or fining anybody who looks. Can't have 'sexism' now, can we!

Date: Wed Jun 11 1997 23:54
Front: Under present circumstances, I hesitate to mention it ... but that last post should have begun as ROT'F'L. ..... well enough, shall be left alone.

Date: Wed Jun 11 1997 23:55
RJ >():
Tried to download WS FTP for Win95, wouldn't let me on. Is it personal? How else might I post a file or graphic?

Date: Wed Jun 11 1997 23:58
cherokee @another-SOLar system>(@another-SOLar system):
wow---take a 2 week hiatus from the pewter and what
do you get pew-titus! it is terrible and causes
foaming at the finger-tips. pewter keys got so
lathered-up, that steam, from the stream of key-strokes,
began to cause secondary burns on the cats' peripherial
vision centers.

what a marvelous medium, this inter-net, cyber-wet, world-wide
knowledge machine!! the pros and cons of everything from topless
women ( easy earl ) , to some alter-ego with a desire to be a big
trader ( probably wishes for OTHER BIG bodily appendages tam-bien ) .
from carlos castenada, to mike sheller and hale-bopp. IT is all
HERE, and more.

taking a respite from the daily platitudes this forum offers,
gives one time ( upon returning ) to reflect on the great diversity
this world, and this platform offers.

where else

no-where else, but kitco.

the written word is a thing of beauty, for all to see. speak it,
and it disappears into the void of the sleepwalkers. write it, and
the world becomes your critic, for better or worse, in good times and
bad, etc... ( earl knows those lines by heart )

the written language---one of the greatest inventions of ALL TIME!
the word---bearer of all that is, and harbinger of all that will be!

if i have seen farther than others, it is because i have stood on
the shoulders of giants. isaac newton

kitco is full of giants. it is good to see the SAME flame, burning
in the breast of so many, from so many, diverse walks of life.

to the contributors, i salute you with 21 arrows aimed at the moon.
to the detractors, i part your scalp with big traders scapula.

le bon temps roulet, mes amies!!

cherokee!; ) driver of the smoke-signal-mobile for all time!!!

Date: Wed Jun 11 1997 23:58
Eldo: Some laws are just naturally meant to be broken. ..... IMVHO. Listening Jr.?

Date: Thu Jun 12 1997 00:00
TED @capebreton>(@capebreton):
Front ( 22:24 ) I wouldn't want to see the Cape Breton Women bra-less!..haha
They've been eatin too many gov. hand-outs er somethin...EBN Gold down 1.30 and the Mailman CHOKED...big time!...Bra-less in Cape Breton=Nightmare...

Date: Thu Jun 12 1997 00:04
Eldorado @the scene>(@the scene):
Earl -- You certainly have that right! Besides, breaking 'laws' is just emulating what the government does so well.

Date: Thu Jun 12 1997 00:04
TED @ted>(@ted):
Ted ( 00:00 ) Meant to say topless...was so rattled couldn't get out the right word...Whew...Hi Cherokee!

Date: Thu Jun 12 1997 00:08
Cherokee: Good to see ya back. .... It wasn't the fancy wimmin that created the excitement; it was the prospect of studded collars 'n whips 'n chains. ....... but realistically, who needs 'em when we have the gold market to stir the endorphins.

How do you feel about new crop grains. Is it too early yet? As you stand on those oft mentioned shoulders, do you see any signs of wickedly riotous reagents in the rearing belt?

Date: Thu Jun 12 1997 00:09
Bart Kitner (Kitco)>(
FOR FASTER EASIER UPLOADING... try this. Go to by entering that in the same place on your browser where you would put a http:// address. Once there select File/Upload File.. from your broswser menu and you're done!

BRE-X DEPT: It looks like the real plan behind the Bre-X scam was to make the serious bucks by licensing the caps, T-shirts, and saltshakers!

Date: Thu Jun 12 1997 00:09
George S. Cole projections>(projections):
GLENN: Congratulations on your Dow 7500 forecast! Agree with you 100% that stocks will be headed up and gold sown for the next few weeks before both markets reverse in a substantial way. Say to Dow 8000 and gold $335.

BTW, gold quite weak tonight; off 90 cents a few minutes ago. As lomg as bullion cannot respond to good news, the path of least resistance will be DOWN.

Date: Thu Jun 12 1997 00:12
APH [[[[[[[[[[[[[[[[[[[[[>([[[[[[[[[[[[[[[[[[[[[):
Earl - I wouldn't get to aggressive here....if you want to play I like July in the money puts on the SPX or puts on select stocks which couldn't rally to new highs during this recent Dow rally. Once the market drops I'd be more aggressive buying puts on the retracement.

Date: Thu Jun 12 1997 00:16
Eldo: If that law comes to pass, it will be called the Omnibus No Peek Eldo Bill of 1997. Authored, no doubt, by that paragon of respect for feminine virtue; Theodore Kennedy. Also known as Chappaquidick Ted. ....

Date: Thu Jun 12 1997 00:19
Eldorado @the peek!>(@the peek!):
Earl -- HAR! But, don't include me in that title. I'll be among the first to break it!

Date: Thu Jun 12 1997 00:21
Earl Jr. @earl>(@earl):
Earl: I listen to your every word that you can count on. haha. Hi Eldo!
Now be nice to your son who hangs on pa's every utterance.

Date: Thu Jun 12 1997 00:26
Eldorado @the scene>(@the scene):
Earl -- Is this so-called Earl Jr. one of your cousins or something? He seems to like us a lot! Or do you suppose he is 'one of THOSE' kind?

Date: Thu Jun 12 1997 00:28
George Cole:

As mentioned a few days ago, the momentum indicators are still diverging, on the Dow and SP500. I realize you are looking at the Russell 2000 primarily. I wish I had been capturing data for that index. Also, because a friend reentered a position in INTC on that last dip, I look at the chart several times a day, merely out of curiosity .... ( and because I told him not to do it ) ....... INTC as well as the SOX index both look grim. ASND, one of the stellar performers over the past 2 years is off about 20 in the last few sessions. Cold comfort. Why dint it do that a long time ago when I was short? ....... Overall; are we approaching 'tumble time'? BTW. Are you of the 'slow grind' or of the 'sharp drop' school of thought?

Date: Thu Jun 12 1997 00:31
Earl Jr. @eldo>(@eldo):
Hi Uncle Eldo!

Date: Thu Jun 12 1997 00:31
Jr.: Now concentrate on punctuation and your listlessness will become less apparent.

Date: Thu Jun 12 1997 00:36
APH: How do you view funds as a vehicle to do the bear thing? I cannot say that my use of options has been a thing of beauty and a joy to behold. And for tax deferred accounts, direct purchase of options is not an option.

Date: Thu Jun 12 1997 00:40
Earl Jr. @dad>(@dad):
Earl: What is punctuation PA? You should have done a better job teaching me how to read and write and be cool like you and Uncle Eldo.

Date: Thu Jun 12 1997 00:47
George S. Cole stock market and gold market>(stock market and gold market):

Agree that we are approaching trouble time for the overall market, but probably are not quite there yet. Still too many strong stocks and group. Also remember my argument that each phase of this bull market runs about half as long as the previous leg. This latest phase has lasted just 2 months; the previous leg lasted 9 months. Suggests we still have another month or two to go.

I plan to get out of all non-gold holdings by mid-July; don't like to play too close to the timeline.

But trouble time for gold stocks is now. August gold off $1.30 on modest dollar rally. Note that gold goes down sharply when the dollar rallies, but moves up little if at all when the greenback declines. That is what I call very bearish technical action. Looks like we are headed for a final washout in the the gold complex before the turn.

Date: Thu Jun 12 1997 00:47
Bart Kitner: The BRE-X salt shaker was my idea but I'm willing to transfer rights to the Kitco Company Store at such time as it becomes a reality. .... For free, .... mostly. ..... ( :- ) )

Date: Thu Jun 12 1997 00:59
George S. Cole August gold>(August gold):
August gold now down $1.60. The Fidelity gold funds have declined for 3 consecutive days. Another case of the stocks leading bullion lower. Would not be surprised if August gold drops $3 by tomorrow's close.

Date: Thu Jun 12 1997 02:17
Jack Fundy & Richard Burke>(Fundy & Richard Burke):

Fundy ( 19:18 ) ( 19:35 ) Richard Burke ( 20:53 ) Thank you
both very much, that's what this group is about.
Not being a wise guy, when I say that Investor's Digest
of Canada's Key Ratio for 1000 Canadian Stocks is a
favorite. A very balanced publication, all industries
They have helped find Gulfstream Resources of Canada who
has a good interest ( 27.5% ) in the Qatar Consortium ( a
group of majors ) .
More important, are the untouched natural gas interests,
which are reputed to be extremely large.
Now all that is required, is quiet in the Persian Gulf,
plus an LNG Terminal and maybe a petrochemical complex by
a group of majors.
A tall order, see, I don't just dream about the gold

Date: Thu Jun 12 1997 02:29
RJ: Your example looks fine when you use US$ - but today's world is
filled with many options to store my wealth. Does your example look as
good when you use Yen, Marks, or the swiss Franc? These all compete
with gold as a store of wealth. Just wondering.

Date: Thu Jun 12 1997 02:49
Bernie Raid on Fort Knox?>(Raid on Fort Knox?):
ted butler... re yours of 09.49....You stated that gold has physically been transferred onto the markets via lease agreements. Do you contend that gold has moved from Fort Knox or other US central bank depositories onto the market? If so, how much or what percentage of the central banks total gold supply is now in promises to return agreements?

Date: Thu Jun 12 1997 03:12
RJ Gol for the rest of 1997>(Gol for the rest of 1997):
Auric - ( 01:30 ) - Ah... But you have called my bluff. No way would I take that wager, charity notwithstanding. How about my goal of $335 half a dozen times before $400 onceí? I do believe all the metals are due for a substantial move in the next two years. Gold may go for the ride, but silver and the PGMs will lead the way. I am basically bearish on gold in the next few months, to the tune of 1.8 million short @ $348 & 350. I Did 5000 oz from $348 to $338.5 a couple months ago. Wished I had taken $339.5 last week, but my mind was on the PGMs and it happened so quick. There hasnít been enough of a rally to re-short, so I guess Iím happy I stayed in. I think it was Eldorado who thought I might be trying to convince members of the group to short. I am making no trade recommendations. I am only describing my views. Besides, if we all ganged up, sold the houses and the kids, and put every penny we had into short gold, we wouldnít make a ripple in the market. Thatís why the PGMs are so fun, the market is thin enough to move. Even silver can be bounced around for a few tens of millions, Not gold, the market is too massive. Only the CBs have the power to move the market significantly. Correction, 40 or 50 million American citizens with a like amount of Asian and European nationals could push gold through the roof.

It is precisely these great unwashed masses that are missing from this market. The equities have stolen their hearts and the romance has a ways to go yet. I, with the rest, called for a true correction in the equities when the Dow was 5000, and then 6000. A 10% drop from 7000 and strong recovery has made me a believer. Please donít take that statement to mean that I will buy into it. These lofty heights make my nose bleed. Hell, I felt more comfortable buying palladium at $204 than I would buying the Dow, NASDAQ, or S & P, at these levels. But, although self contradictory, I too believe the Dow will go to 8K, perhaps even 10K in the next 18 months. We are in the era of irrational exuberance and the sodomites will not come up for air.

The mutual fund market is more than 3 trillion strong, 2 of which came into the market since 1990. How many funds are there now? 7000, 8000? Iíve given up trying to keep track. The funds managers are so flush with cash, and more in pouring in every month. I viewed the 4 - 5 billion per week rise in money markets a year or so ago as a sign that people were getting nervous, converting to cash. Dividend ratios had dipped below 3%, normally a strong signal of a turnaround. What happened next? The Dow broke through 6K. Was that only last October? Itís seems an eternity.

I now wonder if there is a great sell off, where will the cash go? Historically some has always gone to the metals and particularly gold, but gold has lost its allure for the 90s American investor. These people fancy themselves savvy investors for making 30% last year. Believe me, I take calls from these people. They are congratulating themselves on the astute analysis when a blind lemur with dirt on his nose could have pointed out 30% on any financial page. Just invest in the smudges. The refrain of Iím in it for the long term, if it drops Iíll just buy more, can be heard in a great chorus across this land. Will it continue? I think so. Now, we are seeing increased interest in US equities, primarily from Europe, and Hong Kong. The reasons for this have already been addressed by others here, so I will defer.

The Question begs to be asked Where will this money go? Where can it go? There is simply to much $ and not enough investment vehicles. I never thought I would write anything like this. Were I to read these words 5 years ago I would have given a derisive snort and sent the writer away to wipe the hope off those rose colored glasses. Have we reached the day when 70 to 80 times prices to earning is considered normal, healthy? Is this irrational exuberance, or have we moved to a new era? I simply donít know, we are in uncharted seas. All this weighs heavily on gold, and saps its funding. The longer this exuberance lasts, the more distant the primal tug of gold on the spirits of those that touted its virtues only a decade ago

. We now must speak of the psychology of gold. What is the feeling? Outside of this particular peer group, I mean. I receive calls every day from people who want to buy gold. The first question I ask is always, why? This is not meant to be a challenge, I truly want to know the belief system that compels their call. Apart from the occasional NRA, Republic of Texas ( yes I have sold to even them ) , apocalyptic doomsayers, I hear almost no clear cut or deeply held belief in gold. Oh, Iíve always wanted some, and I thought I might find out about it. Or, well, my dad always believed in gold, and I have some extra cash, so I thought I would buy some. Or, I thought Iíd get some gold in case the stock market drops. Are you worried about a drop, I ask. no, but it canít hurt to have some. I will sell gold for delivery to these and others.

Often I run into investers who wants to make profits in gold. I usually try to point them towards silver or platinum for profits as they almost invariably out perform gold in a rising market. The potential from profits is greater. As I have stated earlier, unless I am selling for delivery - which, if a person owns no gold, I always encourage - I use gold primarily as a short vehicle. In a falling market itís protection is great, and in a rising market, the gold short looses less than the others gain. Gold is my platinum and silver condom. It protects me, It cradles me, it sings in my ear, and strokes my hair. Gold will hear my deepest thoughts and never, ever hold it against me when I sell it short. The way things have been going lately, its nice to get out sometimes.

Make no mistake I will leverage gold long, but only in a moving market. Why wait in gold when there is movement in silver? Besides a dark and ugly cloud seems to be over gold, and until that lifts, I will not fight it, I will use it.

Last year Central Banks sold more than 1700 metric tons of gold. Some was bank to bank but most was on the open market. Expectations of at least 1000 MTs in 1997 are very real. The longer these sales are held off, the more the market dreads the day they are sure will come. Now we are hearing rumblings about revaluation of gold stores coming from the Germans and Swiss. If the big four in Europe - Germany - France - Switzerland - Great Britain - sell any gold at all, we will see $320 - $325, possibly $300. The Russians are no longer a threat. I believe their gold is gone long ago to raise hard cash. An interesting aside, received on the COMEX last year; platinum with pictures of the Czar on the bars. 80 - 90 year old platinum. Is this the bottom of the barrel, or simply pillaged platinum from ex party members who have set up their various fiefdoms?

What about Bre-X? A very real expectation of 71 million ounces of gold was just taken off the market! Where is the reaction? That should have been good for $20, short term at least

What about the phenomenal rise of palladium, usually the forecaster of things to come. Look for platinum to follow in 4 - 6 weeks, with gold and silver hot on its heels a month or so later. We have seen many runs begin this way. I thought we were onto one in February but it was very anemic and failed completely. The PGMs in the last eight weeks should have roped gold and, willing or not, dragged it to $375 - $380. What did we get? A great short opportunity at $350. Gold is in a coma.

What about the recent drop in the dollar? Metals are dollar dominated what has happened to all that extra buying power? Where is it. Gold is a redheaded stepchild now and will remain so for the next few months.

I expect gold will test recent lows $336 - $338 in the next 3 - 4 weeks. If a small rally comes and fails again at $350, we will see $325. Thatís my take on it. perhaps the only bullish factor, other than big equities correction, or further substantial drop in the dollar, is what I believe to be the start of a really sweet run in platinum. I Called for over $500 platinum within the month at$402. We hit $506 in London, but I didnít get any part of that. Best I did was sell some in the 70s and buy some more in the 50s and 40s. Iím out of palladium for good. Let it go to $300 - it has a very good shot at it - it will go without men. My holdings are down to 500 oz and those will be gone at the next $225.

Gold may catch a ride, but in a market like this, Iíll take the leaders, silver and platinum. The profits are in these and they donít bite too hard.

I hope this answered some questions for Eldorado. Next: why the western world wonít collapse. Maybe next week sometime.

June 1997

Date: Thu Jun 12 1997 03:35
RJ Other curencies>(Other curencies):
I have done no hstorical studies on forien curency affect on gold. OI have, however, A yen / platinum chart that is almost earie. As goes the Yen, so goes platinum. Will someone explain how I might post these charts

Date: Thu Jun 12 1997 04:22
Strad Master>(
RJ: About this time of night the site is pretty much left to us late-night West-coasters. With the markets opening at 5:30 AM our time, when do you ever sleep? Anyway, I for one, have geatly enjoyed and benefitted from your postings and am delighted that you're such an active part of the site. ( Glad you resolved the tiff with Front. I e-mail him frequently and he's one of the nicest guys you could ever hope to meet! ) My question to you is this: What specific signs would you look for to confirm a gold price breakdown where a person in my position might unhedge a bit to the short side? I actually have had genarally better success with shorting but as my equity has gotten somewhat stretched tight ( relieved a bit now by PA and PL ) , unhedging the gold becomes a tricky call. I personally have no particular attachment to gold, except for the little bit I keep in the safe, and so would far sooner make a profit on the larger amount I have in storage and then turn that over into silver. I really appreciate any advice you might have.

Date: Thu Jun 12 1997 04:35
RJ Us Government CPI for the last 20 years. Complete with Gold Statistics>(Us Government CPI for the last 20 years. Complete with Gold Statistics):


1995 .......2.7%.....$2.64............371....398.....385


...........................................GOLD AVERAGES

Date: Thu Jun 12 1997 04:49
RJ Have yoy read my 03:02?>(Have yoy read my 03:02?):
STRAD - I can make no recommendations for you. As you already know, there is a conflict of interest between us. Your broker is a colleague of mine. Ethics forbid. My postings should describe my opinion. I'm sorry, buy we had this communication B4. General philosophy maybe. No Strategy. You sound like a gentleman, good luck.

Date: Thu Jun 12 1997 04:57
Maybe $340 by friday. I'm still looking for $336 - $338

Date: Thu Jun 12 1997 06:35
Goldbug23 @Ingotwetrust>(@Ingotwetrust):
RJ: With EBN showing gold off 2.10 are you about to take some profits? Enjoyed your June 12 03:12 post. Appreciate your thinking, even tho I do not always agree.

Date: Thu Jun 12 1997 06:39
TED @capebreton>(@capebreton):
EBN Gold down 2.10 and Silver down 3 cents....but it is a beautiful sunny day on the ocean....Front: Tomorrow is TGIF.....Mooney: Get to work! Hi Tort...and Panda!

Date: Thu Jun 12 1997 06:47
TED @capebreton>(@capebreton):
How many have missed the entire bull-market in non PM stocks by thinkin doom+gloom...Last night the Hang Seng was down 497 ( 3.45% ) and it looks like the bubble is bursting in that IMPORTANT market...Mornin MGraves!

Date: Thu Jun 12 1997 06:49
panda @heatwave>(@heatwave):
Hi TED -- A most interesting board at the EBN site. Every commodity is up EXCEPT gold and silver! What's wrong with this picture? BTW, why doesn't anyone want to play on the Globex today/last night?

Date: Thu Jun 12 1997 06:58
Eldorado @the scene>(@the scene):
RJ -- Perhaps we'll see that 338 number Friday. Regarding that very long posting, I'd simply like to say that when a gold trader basically asks what good is gold, it kind of makes me wonder about the traders' veracity should 'things' in paper of various kinds get 'interesting'. I would really hate to see someone be on the wrong side of 'that' trade! As a percentage move, silver will certainly out-perform anything gold can do! That was a great posting! Thanks!

Date: Thu Jun 12 1997 07:07
M.Graves @ Valley>(@ Valley):
Mornin Ted : The seagull dropped a tomato on ya!!! Too nice a day for this old puter , see ya later !!!

Date: Thu Jun 12 1997 07:13
Mike Sheller catchup ketchup>(catchup ketchup):
RJ: A move to 335 ( or thereabouts ) in gold would put the price on the support line one could draw connecting the '85 and '93 bottoms. A case could be made that we have already done that at 340 ish, and that time/space aberration on the long-term chart has compensated. In any event, I do agree that equities have stolen the hearts of the masses. My credo at this juncture is I'm in it for the long term - if it drops I'll buy some more. Physical gold that is. I do think this is probably the contrarian year. Glad you enjoyed the laffs.

Date: Thu Jun 12 1997 07:16
Mike Sheller catchup ketchup>(catchup ketchup):
CHEROKEE: Your 23:58 should be the frontispiece for The collected Works of Kitco. Happy stalking, warrior.

Date: Thu Jun 12 1997 07:24
George S. Cole gold outlook>(gold outlook):
RJ: Agree with you that gold's technical action is terrible and that new lows are likely very soon. But I still believe this is the final washout in a brutal bear market that will reverse in a major way when stocks top out for good and fears about the health of the financial system escalate.

If the stock market drops a few thousand points and gold still cannot mount a powerful and sustained rally, then I for one will concede that perhaps the yellow stuff is dead for the foreseeable future. I would place the odds of such a scenario at about one in ten.

Date: Thu Jun 12 1997 07:28
Mike Sheller more catsup>(more catsup):
RT: Re XAU chart - optimistically, next major resistance on upside is 130-135 within 1 1/2 - 2 months. Beyond that, we've got something going. If it turns down from there, we get new lows into the winter for the final bottom. FUNDY: Wed:13:44 Awaiting the Event. This IS the event. You said prior to 1935 gold was worth 20.67 for 100 years. THAT is the point. Since '35 every nation on earth has been off specie convertible currency. This is the first Kondratieff Wave in history where no national treasury or currency has any tie to gold. Inflation is endemic and chronic. It can only be so when there is no way to check unrestrained currency and credit creation.That is why I say that in 1934 gold began a 150 year bull market that will not crest until the entire monetary structure of the past century is washed away and replaced. The first of 5 waves was from '34 to '80. The wave 2 correction has been unfolding since then. Wave 3 will begin in '98. But this is a long, drawn-out affair, so you can continue to make plans for the weekend. The ups & downs will be fun though.

Date: Thu Jun 12 1997 07:33
Speed @yawn>(@yawn):
It will be interesting to note whether the Chinese step in below 340 again, assuming we drop below 340.

Date: Thu Jun 12 1997 07:37
Roebear @Hershey>(@Hershey):
RJ Many thanks for your well reasoned post of 03:12 and your CPI 04:35. You are what I felt we were missing, a good view from another perspective. I agree that it is the missing masses that have sapped the strength of the gold market by their absence along with CB sales. Until gold regains some of its charm with the common investor it will languish. Of course this can all change very quickly with a crisis of any substance. In any case, I find your unbiased market sense refreshing, even sobering, and hope you will be a long time poster here at kitco. I also think you are real smart since I moved most of my PM stocks into silver yesterday ( !: ) )

Date: Thu Jun 12 1997 07:39
George s. Cole Financial Crisis?>(Financial Crisis?):
I received the following E-mail today from Larry Parks

The BIS is worried about system risk too
Thu, 12 Jun 1997 01:38:40 -0400

Bank of International Settlements: Liberalised markets 'threaten
stability of payment systems'

By Wolfgang MŁnchau in Basle

The trend for liberalised financial markets is becoming a serious threat
to the stability of global payment systems, the Bank for International
Settlements warned yesterday.

The BIS, the umbrella organisation of the world's central banks, said in
its 1996 annual report, published yesterday, that familiar shortcomings
observed in liberalised banking markets caused greater concern than the
spread of derivative instruments.

While we have not yet experienced the economic losses that might be
associated with a major failure in payment systems, which now routinely
process several trillion dollars' worth of payments a day, a few close
calls in recent decades were wake-up calls as well, it said. Violent
asset price swings, generated by excessive credit expansion, often, but
not always, accompanied by generalised inflationary pressures and
capital inflows, have been a major source of recent turbulence.

Weak governance of financial institutions, both internal and external,
has also been a common problem.

The BIS was particularly concerned about the ability of the financial
sector to respond to a possible downturn in asset prices.

The Japanese Big Bang in 1996, the erosion of US restrictions separating
commercial and investment banking and preparations by European
financial institutions for European monetary union all imply that
competitive pressures will intensify further and that financial
restructuring is far from over.

The bank suggested that even a small tightening of US monetary policy
could have a severe effect on financial markets.

It said the greatest risks to the world economy were related to
irrational exuberance in financial markets, structural reform in
European labour markets and possible market turbulence before economic
and monetary union.

The cautious tone was reflected in the annual meeting yesterday,
by about 100 central bank governors.

The BIS acknowledged that the prospect for medium-term economic growth
in the world economy remained favourable, an assessment that is also
shared by other international institutions, notably the International
Monetary Fund.

But the BIS's overall outlook is markedly more cautious: Just as it
would be premature to declare inflation dead, it would also be unwise to
assume that sound fundamentals guarantee good performance in the near

Perhaps the most pressing concern is that inflationary pressure in the
may soon prove more difficult to tame than expected and the expansion
may end abruptly.

Even a soft landing which demanded a series of tightening measures
might have significant implications for equity prices and other more
risky investments, the BIS said in its report.

Mr Andrew Crockett, general manager of the BIS, said: The fact that
asset prices are on the increase, when inflation is low, is something to
reflect on.

Bank for International Settlements

Date: Thu Jun 12 1997 07:47
TED @mainlander>(@mainlander):
MGraves: Haven't looked at the garden yet to see if frost struck...Kill dem cut worms!...Panda: Sunny and 70 degrees ( F ) is today's forcast and throw in a gentle sea breeze and ya got nirvana...Gotta go to the big city and deposit some dividend checks and you can't beat the U.S/Canadian exchange rate...The Canadian Dollar vis-a vis the U.S.Buck is a BUY!

Date: Thu Jun 12 1997 07:56
TED @irrationalexuberance>(@irrationalexuberance):
George S. Cole: People have been talking and talking about irrational exuberance in the financial markets for years and years...Is my large stake in XON at risk? Are they goin to go under...Better hurry up and cash that dividend check!

Date: Thu Jun 12 1997 08:04
panda @>(@):
TED -- Fair warning! I'm going to buy some of dem stox, ya know, dem go-go kind. Dat'll fix da markets! Look what I done ta gold! ;- ) )

Date: Thu Jun 12 1997 08:06
Mike Sheller Anecdotal dotings>(Anecdotal dotings):
RJ, ALL: I know I had fun with the concept of anecdotal platitudes about gold the other day, but I have a deep reverence for anecdotal evidence in the markets. Let me tell a true story. In mid '89 I got bullish on gold and silver, and built a leveraged bullion position for myself that started to go sour as the metals turned down. I won't go into the details of my folly, but suffice it to say that by '91,'92 I was getting my you-know-what kicked. I finally had to cry uncle and sell out. It was the worst shellacking I had ever taken in the markets. I had been right in the mid '70's when I loaded up for a long-term play on silver bullion, but now I was in the pits. I was walking out of my office building on Third Avenue in Manhattan one winter afternoon after my crushing defeat, and the lobby was bustling with construction scaffolds and workers. They had installed a new magnificent marble floor and a triple-domed ceiling. A glint of something somehow familiar caught my eye as it floated through the echoing space. Then another. Somehow, without even having to think, I knew it was gold. I looked up. They were gold-leafing the ENTIRE ceiling! I stood there, transfixed, as people rushed by me in and out. It was snowing gold flakes indoors, and as the building doors opened and closed the flakes were blowing out into the street. Slushy boots were grinding those noble flakes into the grimy wet New York City streets. Nobody but me seemed to know or care. I thought My God, they are painting the ceiling with it! No greater sacrilege could I imagine. And then it hit me! This was the bottom of the gold market! It was time to plan a comeback campaign. I worked myself slowly into position for the '93 rally, and thanks to a fortuitous interpretation of Sunshine Mining's horoscope, I recaptured some of my lost confidence and funds in that advance. Sometimes the good clues are not in the statistics, and spreadsheets, and price charts. Or even the horoscopes. Sometimes it's a no-brainer like folks painting the damn ceiling with gold that wakes you up. Watch the balcony at the NYSE! Carefully. When the bough breaks, the cradle will fall, and down will come market, cradle and all.

Date: Thu Jun 12 1997 08:19
Roebear @Hershey>(@Hershey):
Mike Sheller That was a great anecdote! Sometimes the best answers are not in the charts, stars, etc but right in front of our noses! If your head had been down in total despair you might have missed those floatingindicators! Your posts are an inspiration, keep looking up!

Date: Thu Jun 12 1997 08:43
panda @>(@):
With more data like this, we will hit 6.6% on the long bond. Besides, the 'new' currency is stox, not cash or gold..... :- ) )

08:32 MAY RETAIL SALES -0.1%; EX-AUTOS -0.1%.

Date: Thu Jun 12 1997 09:50
Tortfeasor Joke of the morn>(Joke of the morn):
Morning Ted, fellow suffers all. I enjoyed Mike Sheller's parable this morning and I certainly can relate. Given my recent experiences in the market I post the following:

Two commodity brokers were driving down a country road at high speed and passed a pickup truck with an old couple inside. Look at those fools, pa! Must be a couple of commodity brokers and they will surely meet their maker soon, I tell you.

Well, sure enough, a little while later the couple comes across a bad accident involving the two happless brokers.

Well maw, we got to do what any good folk would do and give em a decent burial. So the couple dug a hole and buried the brokers. Just as they were putting their tools away, a cop drives up.

You folks see this accident?

No sir, but we knew them dang fools were going to have it when they passed us doing a hunert miles an hour. Well, we finally come across the accident and gave them commodity brokers a decent burial

Are you were sure that they were dead

Well, they said they weren't, but you know how those commodity brokers exaggerate and lie!

Date: Thu Jun 12 1997 10:23
AAA ##>(##):
I have read some of your thoughts ( and activities ) in the metals
markets. Very clear and well thought out writing. Anyone that has used your approach to viewing and investing in this area has been right for some number of years! But do the buyers of gold use this approach?
I have to also look at this story from a different slant.
Every last ounce of gold that was ever mined was purchased,
either as jewelry or some form of bullion.
It seems that the CBs picked up most of what they have prior to 1970.
Even back then that amounted to only about 1/3 of all gold. Individuals
worldwide, owned in one form or another all of the rest. It also seems
that, net/net the CBs have stayed a little less than even over the last 26 years. So, did not individuals buy all of the gold mined over this period?
Yes they did pay many different prices for it but, they bought it all! And they still have it! Granted it does move from one hand to another as
the price changes but nowhere can I find that they changed the stuff back
to ore and sold it to the good earth Also, and for reasons Iím not sure of, they are still buying all that can be produced and then some! Think about it, the dam stuff pays no interest, has been the worst investment you can think of, has no future as money in this society and they still canít get enough
We all think of $300.00 an oz. as something special but when it crossed
$200.00 the last time, everyone knew it would be back to $100 very soon!
Yet over the next 17+/- years the world purchased every ounce at $100 +
higher? Seems whenever someone wants to sell the real thing because
itís going to $200 there is always a ready buyer. Could it be that the small gold buyers and holders of the world ( unlike us investors ) donít look at it as an investment? Doesnít the last 26 years of gold buying history make this more like ďthe truthĒ? When you think about it most small traders sell the futures ( paper ) and still keep a few ounces in the vault while the big boys move nothing but paper gold ( all kinds, you name it they sell it ) and never hold metal.
As a person walks thru his house does he not look at all of his possessions as wealth? The TV, pictures, carpet, car, etc. are not looked at as an investment but what you own. Perhaps the last few decades have shown that the worldwide perception of gold has changed. It is now more viewed as ďpart of something you ownĒ , as in ďwealthĒ and not ďmoneyĒ.
Could it be that today investors are trying to ďmake something out of gold that it is notĒ and ďgold buyers are making something out of it that it isĒ!!
Could it also be that the buyers, out of no intention of there own, may break the big gold traders? I guess time will soon tell as it always does.


Date: Thu Jun 12 1997 10:38
student still learning>(still learning):
Can someone enlighten me? What is the HUI index? What does it measure?
Where is it traded?

Date: Thu Jun 12 1997 10:50
panda @>(@):
student -- The HUI index is an instrument for the inducement of great amounts of pain in ones self. Particularly with regards to ones personal finances. That being said, the HUI is the Amex Gold bugs index. It is comprised of unhedged gold producers. Read more about it at But don't say I didn't warn you! :- ) )

Date: Thu Jun 12 1997 10:51
Eldorado @the scene>(@the scene):
AAA -- There is a lot in what you say. Even though the price of gold has dropped, there has been no decrease in demand. In fact, given numbers posted by various organizations, just the opposite! Just given the greater demand than new supplies being mined eventually puts it into crucial shortages. That, in and of itself, is just a matter of time. Who knows at this time how much the CBs have already loaned out? Maybe they are at or close to the point where no more is available. Are the governments actually going to continue selling gold? Maybe and maybe not. There does seem to be a few questions with fewer ready answers. Also, there are many other possible scenarios that can cause it to skyrocket. Don't need all that paper coming home to roost for that to happen.

Date: Thu Jun 12 1997 10:51
There has been a lot of good food for thought on here the last few days. Just because I haven't been posting doesn't mean I haven't been watching. MIKE SHELLER...Good story. Have you ever been to Atlanta The entire exterior of the dome of the capital building is covered with leaf gold. Is it ever bright in the sunshine. RJ.... I have printed several of your posts over the past couple of days to really study at a later time. Some of your rationale is very clearly evidenced in the news every day. I appreciate your posts and will respond to parts of them some day. TED....I still hear the call from Scaterie and Oak.....

Date: Thu Jun 12 1997 10:55
Mike Sheller: the cradle will fall, and down will come market, cradle and all. Sheer poetry. That was a magnificent piece.

Date: Thu Jun 12 1997 10:57
panda @follow.up>(@follow.up):
student -- You may need this to see the option blurb...

Download a free copy of Adobe Acrobat....

Date: Thu Jun 12 1997 11:01
All: For those with an interest in options. The Dec 98 400 calls continue to be a bargain for those who wish to pursue them. I put in a bid at $370 earlier this week and was filled this morning. With gold continuing to look soft, a bid of $300 would look like a good possibility.

Date: Thu Jun 12 1997 11:01
nailz LMAO at PANDA>(LMAO at PANDA):
PANDA.....I needed the chuckle I got from your description of the HUI...That part could, however also describe several contracts and indicies....

Date: Thu Jun 12 1997 11:02
panda @mountain.view>(@mountain.view):
For days like these, I offer this live view from the summit of Mt. Washington, N.H. Try it!

Date: Thu Jun 12 1997 11:04
TED @nailz>(@nailz):
Nailz: Do you live in Atlanta?...I used to live on Buford Hwy. in N.E. Atlanta....Scaterie looks beautiful today...

Date: Thu Jun 12 1997 11:12

Nick and Yvon

Thanks for answering my call. I truly thought that I was talking and nobody could hear. The information is exactly what I needed and the web site is now a favourite to be fully explored Thanks again.

Date: Thu Jun 12 1997 11:12
Eldorado @the market>(@the market):
Another possible scenario for gold: Movement recently in the August is from 341.60 to 347.60 for a six dollar move. 66% retracement, as Dr Doom has pointed out is golds typical retracement, is equal to 4 dollars for a low of 343.60. Todays low ( at least so far ) .

Date: Thu Jun 12 1997 11:16
TED @panda>(@panda):
Hi Panda!...Ain't Mt.Washington pretty!..Re- ( 8:43 ) It's nice to see someone following the news and not just wishful thinkin...DOW up 67...Long Bond up 30 ticks with yield @ 6.76%...Comex Gold down 1.20, Platinum down 9.80, and Palladium down 8.50...XAU down 1.03....Dow now up 73....

Date: Thu Jun 12 1997 11:23
TED @front>(@front):
Front: I had a brutal day driving to the bank and back...must have seen at least ten other cars on the drive and my nerves are shot!...Keep tellin meself...slow down...slow down...and smell the roses...Time for a little ocean kayaking and loon watchin...Hope yer day has been a little less HECTIC...on the river...

Date: Thu Jun 12 1997 11:23
DocDuke Albuquirky>(Albuquirky):
Bart: I tried your ftp URL. With Netscape 3.0, here is what I got:
Current directory is /pub/discussion
Up to higher level directory

There was no file to be found for uploading.
You may need to set the file permissions for world read access.

Date: Thu Jun 12 1997 11:36
Novice: Got your missile...thanks!...Will be back in yer face after the ocean adventure...No blackflies out there....Howdy Tort: Did I get the right broker...Irrational exuberance LIVES....

Date: Thu Jun 12 1997 11:37
ark saltedcore>(saltedcore):
Anyone: I'm looking for a goldbug vaccine. The bug casued
me to sell G @ 44 two years ago. Also, I sold CLX @ 67.
I also fell under the spell of Alan Abelson. Now I'm loaded
up to the gills in gold mutual funds and stocks. Only a
severe case of goose bumps prevented me from jumping on
Bre-X at around 200.

I wanted to buy the blue chips last month but I couldn't rid
myself of the bug. It is worse than a tick. Chiggers I don't
mind. I lost thousands on HM alone but still I buy. I
have my last will and testament instructions not to sell my
gold stocks untill spot gold hits 500 as I may not live
long enough to see it.

Faith, the evidence of things not seen...

Date: Thu Jun 12 1997 11:46
Strad Master>(
RJ: I assumed by posting on a public forum where we are both anonymous and ALL could benefit from your answer, any conflict of interest problems would be mitigated. Had I not e-mailed you and had you not figured out that you work at my brokerage, no such problem would exist. Whatever you write is still your ( experienced ) opinion and so subject to my own flawed scrutiny. Nevertheless, I understand and will desist from any further questions and will try to glean what I can from your postings.

Date: Thu Jun 12 1997 12:09
panda @>(@):
DocDuke -- Once you are in the directory, click on File ( your browser ) , then click on Upload file. A directory box will appear. Then select the file that you wish to upload. Click on Open, or double click on the file, and it's on its merry way.

Date: Thu Jun 12 1997 12:16
Vieserre home>(home):
EARL: That option can be had for under $300

Date: Thu Jun 12 1997 12:45
nailz HEY TED !!!!>(HEY TED !!!!):
TED.... Atlanta is about 4 hours away from me.....Interesting you lived out on the Buford Highway. I used to live out there, too. My father worked on the dam at Buford and we lived in a little community called Sugar Hill...That was about 1955....I have friends and business occasionally in Atlanta so I go there several times a year. Next week in fact....

Date: Thu Jun 12 1997 12:49
Strad Master A question>(A question):
RJ: One further point. ( Please believe me when I say I'm not arguing with you on this I just am throwing this out as a question of interest that has occureed to me as result of our recent dialogue. ) My wife is a doctor. It is common if not expected that when a diagnosis is made that the patient gets a second opinion - if not a third and fourth. In fact, my wife insists upon it. In this case, where thousands if not hundreds of thousands of dollars are involved, why is it that if I, the client ( patient ) seek a second opinion it is considered a breech of ethics? Why doesn't our brokerage make that sort of thing available to it's clients? After all, isn't it the goal of the company to make as much money for it's clients as possible and thereby facilitate long-term relationships? Perhaps others might care to respond, too?

Date: Thu Jun 12 1997 12:53
ALL....Anybody else looking to short the XAU here

Date: Thu Jun 12 1997 13:17
George S. Cole Projections>(Projections):
NAILZ: I will not be shorting the XAU here, although it probably will go lower. Risk/reward ratio VERY unattractive unless you believe bullion is headed for another steep plunge. Better shorting opportunities elsewhere.

With the Dow Industrials continuing to advance relentlessly with hardly a respite and the smaller stocks stalling out, the market looks like it will peak earlier than my original late summer target date. The first half of July seems the best bet at this time. Gold should start doing much better about then. The current washout still has further to go though. Look for a downside breakout below $340 that may carry as low as $335, and then a big reversal up.

Date: Thu Jun 12 1997 13:18
Fundy Investor's Digest>(Investor's Digest):
Jack: Investor's Digest tipped me off to the probable rise in Canadian banks in the 1990-91 period ( did not think to memorize the specific issue ) . All of the major banks have done very well with some in the teens at that time now hitting their head on $60.

Date: Thu Jun 12 1997 13:54
Bob A to Strand Master>(to Strand Master):
Let the buyer beware. You pays your money you takes your chances.

Date: Thu Jun 12 1997 13:56
General to ARK>(to ARK):
I heard that, Brah! I got the bug too; caught it in 1980 and
haven't shaken it since. I lost a wife ( at least partly because of )
and much money due to my obsession with the yellow and white stuffs.
I don't know if I can take it much longer. My philosophy now, which
I admit will be hard to stick to, is to accumulate cash positions
and just let my current metals/stock holdings ride for the long haul.
Just wait, I'll get a metals newsletter tonight touting the next
real Bre-X. What's a fool to do?

Date: Thu Jun 12 1997 14:16
Front @upandatum>(@upandatum):


The upload file is available in NETSCAPE only.... What do the unwashed with MS EXPLORER do?


Date: Thu Jun 12 1997 14:17
Front @upandatum>(@upandatum):


The upload file is available in NETSCAPE only.... What do the unwashed with MS EXPLORER do?


Date: Thu Jun 12 1997 14:19
panda @? >(@? ):
I'll find out later tonight... I have both, explorer came with NT 4.0, but I don't use it.

Date: Thu Jun 12 1997 14:20
panda @>(@):
Whhhooppps! That last one was for Front.

Date: Thu Jun 12 1997 14:23
Strad Master Huh?>(Huh?):
BOB A: Thanks for the comment. Please forgive me though, but I don't see how it relates to the question.

Date: Thu Jun 12 1997 14:24
Crystal BAll Upward Implosion@Wall&Broad>(Upward Implosion@Wall&Broad):
e: Stock Market- To the moon, Alice !!!

Date: Thu Jun 12 1997 14:32
Onlooker @fire...>(@fire...):
StradMaster ... If I couldn't be sure that my broker was working for me ( and by broker I mean everyone in the office ) I'd fire the SOB. What, now if there's breaking news, you shouldn't hear because there may be a conflict of interest? Conflict to money in the bank they mean...Your Money, Their Bank !!! Get rid of the bums if they won't help!

Date: Thu Jun 12 1997 14:36
TED @backfromocean>(@backfromocean):
Nailz: Small lived there 1968-1969....DOW only up 115! What gives....XAU down .77 ...what gives...

Date: Thu Jun 12 1997 14:38

RJ, All

I'm interested in obtaining metal. What, in YOUR PROFESSIONAL opinion, is the path of least resistance and/or preferred method. All options & opinions welcome from other sources as well. Please respond to the e-mail address posted here, if possible....

Date: Thu Jun 12 1997 14:40
Chicken Little @wallstreet>(@wallstreet):
The sky is falling The sky is falling!

Date: Thu Jun 12 1997 14:41
GFD Amazed>(Amazed):
The posts on this site over the last two weeks have been excellent. This place can be amazing.

George S. Cole: I dunno about the Dow fizzling anytime soon. The 5 minute chart of this steamroller does not look like it's going to stop any time soon. It could hit 8200 by July but I suspect we may see 10,000 by Sept unless this chart starts getting sicker soon.$INDU&time_period=5-minute%20Bars&bars=420&newstype=480%20x%20360%20GIF&chart_type=Close%20Only&colors=Black%25%252C%20Green%20on%20Transparent&vol=Volume&study=Exponential%20moving%20average&ma_period=50&key=

Date: Thu Jun 12 1997 14:42
Vieserre: Dec 98 400 calls under $300 ...Aaaargh. In this climate, the bids *cannot* be too ridiculous. Take your first thought and reduce it by at least 50 bucks. ..... But imagine, someone is willing to allow you to watch the price of gold for a period of almost 18 months for less than $3.00 an oz. ...... They are convinced that they will never have to perform. Either by normal market action or default.

Date: Thu Jun 12 1997 14:44
Chicken Little @gunrunner>(@gunrunner):
GUNRUNNER: Buy Inco! Stock symbol=N

Date: Thu Jun 12 1997 14:44
GEORGE.....We are basically singing off the same page of music. I am expecting a drop in gold a little lower than you are...That drop carring the XAU down to the mid or low 90s.....APH... you there....What do you think

Date: Thu Jun 12 1997 14:46
student still learning>(still learning):
Panda: Thanks for the info. I appreciate the warning and especially the humor. I feel no further need for self-induced pain. With what the stock market and the gold market are doing to me, I need no further self-induced pain- at least for a little while, anyway.

Date: Thu Jun 12 1997 14:52
Chicken Little @reality>(@reality):
Recent quote from Sir.John Templeton I have never been smart enough to predict the future course of markets!

Date: Thu Jun 12 1997 14:54
Nailz: I vote with you on the XAU. Looking at it seriously, a few minutes ago, it certainly looks like it is setting up to retest the low 90s again. ........ Aaaah, if this were easy, little girls would be doing it.... who knows they may be doing now and much better. ... ( :- ) )

Date: Thu Jun 12 1997 14:59
Chicken Little @comex>(@comex):
Comex gold down 2.20;silver down 3.5 cents;platinum down 9.80; and palladium down 1.50 DOW up 119!

Date: Thu Jun 12 1997 15:03
Watching the gold market today makes me want to break out in nursery verse reciting Jack and Jill. The trouble is that neither gold ( Jack ) nor silver ( Jill ) wants to go up the hill but they seem to have both fallen down and broken their crowns without the necessity. Now then, how about Humpty Dumpty--he too had a great fall. Where are those king's horses and men that we need to put this market together again. All I can say is bah bah yellow sheep.

Date: Thu Jun 12 1997 15:10
Guzman have a nice trip, see you next fall>(have a nice trip, see you next fall):

Tort: Ixnay on the allfay word. : )

Date: Thu Jun 12 1997 15:25
Bob A to Strand Master>(to Strand Master):
My overall opinion of brokers of any kind is that they are salesman first , therefore I say let the buyer beware.

Date: Thu Jun 12 1997 15:27
Este on gold leaf>(on gold leaf):
Sorry to disappoint you guys but the gold leaf that you see in many buildings is not gold at all but anodized aluminum leaf. Most of this material comes from Europe, is quite inexpensive and looks like gold. Nobody could afford the real stuff for this particular use.
In spite of this detail, Mike Sheller's story was beautifully written and I also enjoyed reading it.

Date: Thu Jun 12 1997 15:38
Richard Burke xau-iffy>(xau-iffy):
Nailz: Further to my post last night, with abx showing no volume, gcq7 back under 245.50, Kaplan gold/xau differential stilll under 250, Deaner's warning for today happening, I also feel XAU will be down into the low 90s again. I have been in four gold stocks which have good leverage against the xau for the past month and came out this afternoon at close to breakeven including commissions. I'l try again later.

Date: Thu Jun 12 1997 15:46
Richard Burke Ag Stocks>(Ag Stocks):
Anyone: I am familiar with Silver Standard Resources as a silver stock play. What others are worth looking at? Also platinum stocks?

Date: Thu Jun 12 1997 15:46
Bart Kitner (Kitco)>(
DOCDUKE: The File/Upload File... is from your Netscape menu. YOU choose the file on your computer to upload TO Kitco. It's fun and easy.

Date: Thu Jun 12 1997 15:46
Nailz - Still looking for the XAU to go under 97, but it maybe a slow drift down. No punch in Fsagx again, i suspect the strong Dow is keeping the Xau up today. Stopped out of my S&P puts, reversed and bought the calls, using a trailing stop. This Dow is like trading soybeans in a weather market.

Date: Thu Jun 12 1997 16:07
panda @ $.$.$>(@ $.$.$):
Let's see, if there are 250 trading days in the year and we assume a 1.5% increase in the Dow each day ( completely reasonable! ) . For every dollar you put in, you would get back $41.35 at the end of the year. I can hear you nay sayers now. Forget about the expansion of the money supply! Nobody is ever gonna sell! We'll all be rich! :- ) ) :- ) ) :- ) )

Date: Thu Jun 12 1997 16:12
Question @>(@):

Speaking of money supply. How has it been doing

Date: Thu Jun 12 1997 16:20
George S. Cole blowoff>(blowoff):
Bullion down $2.40 today but XAU and HUI up slightly. We shall see who leads who.

Still see this market as in the final blowoff stage. Great for those who get out in time, but very painful for anybody caught without a chair when the music stops. Widespread expectations of Dow 10,000 not likely to be realized. When the market peaked at 2700 back in 1987 two months before the crash everybody thought the Dow would hit 3000 before trouble developed.

Date: Thu Jun 12 1997 16:53
Novice @WOW/dow>(@WOW/dow):
An anecdote: had lunch with a German-Canadian friend today, just back from Deutschland and a meeting of the family business there. North America looks quite good investment-wise to certain Europeans, at least. Helmut Kohl and his ideas of European Monetary Union are not at all popular with her contacts. After handing East Germany a very generous 1 DM for each 2 ( practically worthless ) East German marks a few years back, they are not at all thrilled about the prospect of joining several European financial basket-cases in a watery EMU. Thus, a substantial part of her DMs have been used to buy US$$ and US investments. And, There was no mention of gold....

Date: Thu Jun 12 1997 16:55
Mee toooo! Are there any good silver stocks worth looking at Gold seems to be in a strong state of MANIPULATION ...does silver look any better


Date: Thu Jun 12 1997 16:57
TED @capebreton>(@capebreton):
Panda ( 16:07 ) Now yer talkin....George S. Cole: I didn't sell a share in 1987 either...and here I am...right on the ocean!...With most of portfolio in D.R.I.P. just ended up with more shares when the crash happened...Is the world goin to come to and end...this time

Date: Thu Jun 12 1997 17:01
TED @novice>(@novice):
Novice: Let's not be rational...

Date: Thu Jun 12 1997 17:16
Strad Master Clarification>(Clarification):
ONLOOKER and BOB A: I don't want us to all get bent out of shape here. My question to RJ is very specific and has to do with the philosophy and morality of trading the markets. I also posed it to him withour any rancor so, since it's my question, please permit me to keep this discussion as respectful as possible.

Let me provide a bit of background. It turns out that RJ works as a broker at the same brokerage that I maintain my bullion account. Not being in any way aware of this, I e-mailed him a question concerning bullion purchases since he evidences experience and knowlege in the field. He recognized my real name and in kindly writing back informed me that since he works as a broker at my brokerage, professional ethics forbade him to give me any advice. I understand and respect that. What stimulated all this is my posing what I thought to be a more generic question on the site, the answer to which might have been of use to many at this site. RJ's response brought to mind the question of why there is there no provision at my brokerage ( or any brokerage ) for obtaining a second opinion since his trading style is somewhat different from that of my broker. It seems to me that by combining talents and approaches, perhaps a more succesful overall approach to trading might be achieved. Now, there may be circumstances that mitigate against that. If so, I'm curious as to what they may be. I think a lot of my broker as a person and as a professional, but as I am primarily interested in the well-being of myself and my family I would like to have access to the best and most effective trading methodology possible. When cold-calling into a brokerage ( as I did initially ) one just gets whatever broker is next due to get a client. If there's no definite overall approach, and all the brokers are just in cutthroat competition with one another, then those who are lucky to reach a talented broker will do well while others who are not as lucky will get wiped out. It seems contrary to good economic sense for a large firm not to make every effort to maximize the success of EVERY client. From your comments it seems that there is an us against them mentality at work here and I'm not sure it should be like that. Anyway, I await RJ's response and hope this clears up any misintrepretation of my question. ( BTW Bob A: my handle is STRAD Master - as in Stradivarius violins. Thanks! )

Date: Thu Jun 12 1997 17:25
June 20th: Bema annual meeting. They may, at that time, release independent scoping studies on Cerro Casale ( Chile ) property ( which they partner with Arizona Star ( AZS on Vancouver ) . Will it show the mother load or mother dud?

Earlier estimates have this property at:

The estimate of contained gold and copper in the Cerro
Casale deposit to 27.4 million ounces of gold and 7.6 billion pounds of copper.

This scoping study may confirm these numbers ( or update ) .

Supposedly PDG may be interested in Bema and/or Arizona Star if the numbers jive.

Date: Thu Jun 12 1997 17:31
FYI: For those interested in how much forward selling. I just received information on Campbell Resources ( CCH ) . It estimates their 1997 forward selling at 25% of production. I use to own CCH ( that is why I received latest report ) . Seems like a reputable company ( for the mining industry ) . Limited downside versus other juniors, IMHO ... I may buy back later.

Date: Thu Jun 12 1997 17:43
Jack Nothing Real Good>(Nothing Real Good):

Richard Burke: All that I heard about the pure silver
stocks, is the talk about huge reserves which'll cost a
pretty penny to put in production.
Even Hecla ( now both PM's ) never lived up to its promise.

The only one that seems OK is Prime Resources
( gold/silver ), Homestake has a
50%+ interest. It pays a dividend and a while back, a
report in Investor's Digest hinted that Homestake might
transfer its Canadian assets to Prime. It makes some
sense ( but that's no recommendation ) . Prime can pay back
with gold from Eskay, Snip, then Hemlo. if such were to
take place, Homestake would still have 50%+ stake and
still be the operation's manager.

There are other -no baloney- former silver producer's,
but the key word is former.
I think that this situation may bode well for the metal.
Question of secondary silver still lurks. Ain't no

Date: Thu Jun 12 1997 17:47
Markus Chinese Connections>(Chinese Connections):
Did anyone hear the astounding CNN news this morning about Indonesian Mr. Chan who is reported to have been providing the Democratic party with reelection funds from Indonesia..apparently he was spying for the Chinese passing U.S. trade and commerce secrets to Chinese. The Indonesian company Mr. Chan represent were under Chinese ownership. Consider this possibility: Chinese orchestrated the Bre-X fiasco to secure them one of the richest gold reserves in the world, they pay off Freeport McMoran and others to remain silent, they own 95% of Indonesian commerce, they secure themselves a huge gold supply which the U.S. has been trying to prevent them from buying in the normal market ( Greenspan's trip to China to pursuade Chinese to buy U.S. bonds, not gold ) . A deliberate move to secure the Chinese position so as to discredit the U.S. economy, secure in their gold supply, ready to deepsix the U.S. economy by simply defaulting on their U.S. debt holdings. Ties in nicely with Asian Business News about why China orders its banks to cease putting cash into their stock market...such a move in any other market would have seen a major correction. Apparently, not a whimper in Chinese markets..why? What are the Chinese up to? The PLOT THICKENS...indeed! Keep your eye on the ball!

Date: Thu Jun 12 1997 17:50
Losers R Us @PMmarket>(@PMmarket):

Date: Thu Jun 12 1997 17:52
LoserRUS: What is your major maladjustment?

Date: Thu Jun 12 1997 18:09
Strad Master: I don't know alot about how brokers work or run their
business. I try not to use them. Matter of fact - I don't use them.

But, I know this:
I have a close friend who is a broker for ML - she has the corner office
on the top floor of the ( big 5 city ) branch. In other words - she's important
in the ( big 5 city ) market and you have to be referred just to talk to her. She
has shown me internal memos and reports that the brokers never see or
hear about. Not all brokers or clients are equal or are treated equally.
Client books are closely guarded by each broker.

Personnally, if I had a 7 digit account I would have a professional like
D.A. manage 90% of it, and personnaly play with the rest. Their is nothing
like being in NY and being connected. IMHO

Date: Thu Jun 12 1997 18:23
Kuston: yep ... most brokers are just pumping product ( sales = $$$ ) . Most do very little research of what they're peddling ... just passing something on that one of the bigwigs has passed on to them ... when it is okay to pass it to the general public. IMHO ... you are better off doing your own guesswork and due dili. ( or throwing darts ) than using a broker ( unless you're connected ) . Remember Dan D. on CNBC ... you were hearing it from him because somebody wanted you to hear those recommendations. You could lose a lot of money doing that. For example, I remember Citibank and Chemical slightly around 10 or so and Dan D. having people predicting they would go to about 2/share ( recommending short ) . Recommending shorting many bank stocks, etc. Anybody who went on that info. lost, not only, their shirt ...
but also a few arms and legs. : )

Date: Thu Jun 12 1997 18:24
Anyone notice BMG Battle Mountain Gold. Moving up on good volume in spite of terrible gold performance. Stk. up a qtr on 632 k. Co. has lots of cash and recd an upgrade to positive from S&P on Hemlo merger.
Could BMG be in play/all that cash/S&P upgrade/Peculiarly bullish stk action given the current gold market. Something is happening here. This is a Houston, Texas based company.

Date: Thu Jun 12 1997 18:44
Tortfeasor Bonus Joke>(Bonus Joke):
My feeling is that the XAU going up today proves that in a tornado even an ostrich will fly. I think if the DOW goes down XAU will go down too. Its weak positive showing does not appear to me to be particularly bullish today given the rise in the DOW. Now in an effort to make the wound licking more palatable the following.

A guy gets on an airplane and sits next to a very attractive young lady with NAN emblazoned on the front of her t-shirt.

The guy, with intent to become closer friends with the beauty, says, So Nan, how do you like flying?

The lady replies, My name isn't Nan, NAN stands for the National
Association of Nymphos.

The guy says, What does the NAN do?

She says, We have meetings to discuss the best lovers.

He asks her who the best lovers are and she replies, The best lovers are
Jews and Native-Americans.

He says, Let me introduce myself, I'm Tonto Goldstien.

Date: Thu Jun 12 1997 18:45
Paul hrhpmd@aol>(hrhpmd@aol):
Earl ( Duke of.. ) ....Thanks for info on Dec 98 400's. I am going to take some of those
puppies soon to hedge some property I am selling in late 98.

Date: Thu Jun 12 1997 18:47
Paul Smith>(

Al, when you e-mailed me a couple of weeks ago that the S & P would hit 880 I have to admit I didn't believe it. You called it right ! Too bad I had puts instead of calls.

Tell, me... when can we expect the Dow to crash ?


Date: Thu Jun 12 1997 18:52
Byron @ Hear Ye, Hear Ye:>(@ Hear Ye, Hear Ye:):
Announcement: For a Limited Time Only!!

The DBC site will now allow you to put in technical indicators for your chart. They have a selection of various indicators to choose from. I.E.- stochastics, MACD, Bollinger Bands, etc.

You need to get to the Enhanced Charting Page and look for technical indicators The URL is

Date: Thu Jun 12 1997 19:04
Byron @ Update:>(@ Update:):
Re: last post. Just realized that the Technical Charting page can be accessed directly from the DBC Home Page.

Date: Thu Jun 12 1997 19:20
TED @tort>(@tort):
Tort ( bonus joke ) HAHAHA...but who's lickin wounds? Dow up...ABX up.....
beautiful sunny day on the ocean....who can ask fer more...Tort:the Mailman was pathetic in the clutch last night and I am very disturbed by his performance in the biggest game of his life....fer shame Mailman..fer shame...

Date: Thu Jun 12 1997 19:21
Jack Battle Mountain>(Battle Mountain):

Tw: ( 18:34 ) What I'm thinking is pure speculation, but
when Battle Mountain aquired Hemlo Gold, they also
re-aquired their conservative image and probable support
from Noranda.
Down here the greenies have thrown; and are attempting to
throw more monkey wrenches in their plans.
My quess -and its only that- is that they will seek to
increase their interest in Lihir Gold, the biggest newby
on the block.

Date: Thu Jun 12 1997 19:24
Crystal Ball Nuggets@Wisdom>(Nuggets@Wisdom):
If Dolly Parton had married and divorced Tommy Smothers, then went even further back in show business and married and divorced Mr. Lucky, then married and divorced Martin Short, then married football kicker Ray Guy, we could all nod understandingly when we heard, Dolly Parton Smothers Lucky Short Guy.

Date: Thu Jun 12 1997 19:25
Chicken Little @goldbugs>(@goldbugs):
Tomorrow will be our day! The big rally is right around the corner! My charts show gold will turn around at 11:54 Friday morning! The Dow will be at 1,000 in 37 days!

Date: Thu Jun 12 1997 19:26
Steve Puetz>(
RJ: I disagree with your 6-11-97 note @ 21:05. You said, the trick is to buy gold and sell it after a move up. This time around, buy and hold will work better. Our financial system is collapsing. Selling gold any time before the collapse becomes a total wash-out will mean a complete loss of your capital -- no matter how much you made on the way up.

Date: Thu Jun 12 1997 19:29
Steve Puetz>(
RJ: You need to read Eldorado's piece on 6-11-97 @ 23:02. Eldorado: You understand our monetary system and financial condition perfectly. You need to post more notes on these pages!!

Date: Thu Jun 12 1997 19:31
Crystal Ball Free TA @ IQC>(Free TA @ IQC):
For technical analysis ( JAVA *and* non-JAVA ) on stocks, try Membership is free, and as far as I know, this is not for a limited time either.

Date: Thu Jun 12 1997 19:32
Steve Puetz>(
George Cole: You are right. Stocks hold the key to the revival of gold and silver. With everyone rushing into blue-chips, nothing left for gold. It looks like the DJIA is in a blow-off. The big question is when will it terminate?

Date: Thu Jun 12 1997 19:35
Pepino di Cortino Dolly>(Dolly):

Crystal Ball: Owe Nice.

Date: Thu Jun 12 1997 19:35
Steve Puetz>(
I haven't seen much discussion about the decline in retail sales. Retail sales have dropped for 3 months in a row. In the old days, that used to be a sign that the economy has slipped into recession. It looks like a replay of 1929, the economy peaks-out ahead of the stock market. If so, the coming stock market crash isn't too far away.

Date: Thu Jun 12 1997 19:40
Steve Puetz>(
General & Student: A big portion of the mania is social pressure. With so many people making money in stocks and losing in precious metals, those who like gold and avoid stocks are scorned. I must admit, my wife isn't too fond of my investment strategy either. Nonetheless, we must rely on logic, not emotion. We must buy value, and avoid over-value. Logic dictates that gold be purchased, and stocks and bonds be avoided.

Date: Thu Jun 12 1997 19:41
Steve Puetz>(
GUN-RUNNER: Buy gold and silver coins.

Date: Thu Jun 12 1997 19:44
Steve Puetz>(
TED: Refering to the 1987 crash, and the expectation of another crash, you asked: Is the world coming to an end this time?
In a word -- YES. That is, the financial world as we know it. Read Eldorado's work. Credit-based money is history -- probably for centuries to come.

Date: Thu Jun 12 1997 19:52
Byron @ The Public Library>(@ The Public Library):
Crystal Ball:

Thanks! Now I am charted up. : )

Date: Thu Jun 12 1997 19:54
WDL @ a little more levity>(@ a little more levity):
When will this lunacy end?..I thought the final figures I heard were from Hong Kong or Tokyo. Tomorrow, they'll probably announce that there were ten less bankruptcies and the market will go up another 100 points. To add a little further levity ( I enjoyed tortfeasor's humor ) , I'll add my own story:

Many of us remember back in July, 1969 when Neil Armstrong landed on the moon....those memorable words: That's one small step for man and... well you know the rest. What you don't know is that many of us misheard those history-making remarks Armstrong uttered as he descended from the lunar module onto the moon's surface. It seems that
Armstrong, as a young boy, lived in an apartment complex in Ohio. Practically every night as he was getting ready to go to bed he could hear in the next apartment his neighbor, Emanuel Kind pleading with his wife for sex. Manny's wife's constant refrain was:
Manny, when somebody lands on the moon....that when we'll have sex!
Well, as Armstrong prepared for his historic making descent onto the
moon's surface, he kept thinking of his old neighbor, Emanuel Kind...
so when he set foot on the moon, he said: That one small step for man...
one giant leap for Manny Kind.

Date: Thu Jun 12 1997 19:54
U.S. House of Cards: 5+ trillion debt; 17+ trillion unfunded liabilities;
new accouting gimmicks to hide the true size of the federal deficit ( last year deficit was about 250 billion not 107 billion ) . High levels of corporate and personal debt. Medicare Trust fund on life support ( and eventually Uncle Sam will raise taxes ) . Soc. Sec ... and so on and so on.

Date: Thu Jun 12 1997 19:55
TED @stevepuetz>(@stevepuetz):
Steve Puetz: Read who's work?...Think I'll stick with Warren Buffett...
snicker...snicker....Where the hell did you come from...I've been fully invested for the ENTIRE BULL-MARKET and have also made a few bucks on Platinum and gold shares...on the side...Sometimes the bias of this site is actually humorous!

Date: Thu Jun 12 1997 19:57
Chicken Little @reality>(@reality):

Date: Thu Jun 12 1997 19:59
Dashing & Flamboyant CNBC Financial Celebrity shares an encyclopedia of market insights on stocks, oil and T-bonds in Inger Letter Forecast - Click RELOAD at Gold Digest:

Date: Thu Jun 12 1997 20:02
If anyone is now joining the sucker rally ( IMHO ) to go over 8000, I hope you know when to exit.

Date: Thu Jun 12 1997 20:05
WW @New England>(@New England):
Mr. Peutz's observations are correct/the threat is depression. In McAlvaney's Letter ( which all should read lest they be uninformed ) the author unmasks the fraudulent presentation of Econ strength by or leaders ( Political/Media and Wall St ) . Credit card debt went fron 20 billion in 1990 to 400 billion in 1995 its probably near 500 billion area now. Bankruptcies, with which I am well acquainted in my profession, are going through the roof and unfortunately I can report that MY business is really booming/unlike retail sales.I can tell you from experience that the debt game played by the banks is really hurting families. As Mcalvaney aptly points out Depressions are always caused by excessive credit expansion as in the 20s. The difference this time is that we have very smart people ie mkt saavy, like Rubin who see this coming and have been hired by the politicians to try and head it off.

COORDINATION: US releases weak econ numbers today. Now if you were one of the guys hired to maintain stability what message would you want from the weakness. Ans: Strong dollar ( Japanese miraculously buy dollars just before this announcement ) strong stks ( basically a life of its own ) weak gold ( no panic over weakness ) . The nightmare scenario is weakening US economy therefore bigger deficits and higher rates and crashing stks thus when weak numbers are released you must have a strong dollar. The nightmare scenario is what they are trying to delay and thus will be aggressive in countering the development of any adverse market psychology when the numbers present a risk ( ie weak ) of their development. They are well awarse that the credit based expansion requires intense mgmt since it is based on the need for continual borrowing for earnings growth and therefore even US tax revenues. When the borrowing crashes so will earnings begin to erode.

EVIDENCE: I have noticed many companies attempting to get business by discounting the cost of services deeply. However, the catch is that you pay money upfront. Given, the prevalence of pressure for short term earnings performance ( stk option oriented managers ) one would get the impression that they will do anything to get that earnings bounce at the expenses of future performance. This policy may indicate that things are getting tight and they have basically played out the downsize card.

Re: Stockbrokers: I have a full service broker who has assisted me with financial plans and who is honest but has had some bad years as well as good. In the bad years I always insist that he does not reduce the commission because I know it is then that he really needs the money. When he is riding high and making me money I demand a 25% discount.

Date: Thu Jun 12 1997 20:09
Jack Who Pays For It?>(Who Pays For It?):

EWP ( 19:54 ) Right on; and practically every government
has large debt. It's supposed to be payed; so we are
Who pays? The taxpayer pays.
Who do the governments pay? The Credit Czars.
Who controls the governments?

Date: Thu Jun 12 1997 20:15
Jack: and the U.S. has the addl. problem of depending on countries like Japan and China to buy its debt. Japan is a problem now because of the stability of their economy and banking system ... and China and the MNF thing is about getting China to buy our paper ... and China may be more of a long term problem that Uncle Sam's appetite for debt will just have to deal with ( unfortunately ) .

Date: Thu Jun 12 1997 20:16
TED @ewp>(@ewp):
EWP: Re-suckers rally and Dow 8,000....With all due respect, what is going to happen at the end of the suckers rally...another repeat of 1987?...Didn't sell a share then and am now in early retirement...Most of my portfolio is in D.R.I.P. and I only ended up buying more shares when the market plunged...Shares in the BASICS of life such as international oil ( XON ) electric+ gas utilities ( WEC,SIG,BGC,PNY, ECT ) and telephone companies ( SBC,FRO ) ...are they all goin out of business? Don't hold yer breath!...I got plenty of ABX TOO so I ain't no anti-goldbug...and plenty of tangible real that goin to vaporize too...I am also very SELF-SUFFICENT ( probably unlike most on this site ) so bring it on! I'm READY!

Date: Thu Jun 12 1997 20:20
Ted: Cash will be king. Buying opportunities. Energy related sector may be of good value. I own PNY also and some others through DRIP and Direct Purchase plans! Only 5-7% in mining shares. Shifting to money market and conservative funds for buying opportunities.

Date: Thu Jun 12 1997 20:21
TED @capebreton>(@capebreton):
EBN Gold down .40....and Tiger Woods is NINE strokes behind the leader...

Date: Thu Jun 12 1997 20:26
EWP: I'm in SHOCK!...someone here owns a non-gold stock...Ain't PNY a great little company and I love those yearly dividend raises...TRP is another good one fer dividend increases...Vis-a-vis U.S.Dollar ..the Canadian Dollar is a screamin buy!

Date: Thu Jun 12 1997 20:27
panda @explorer?>(@explorer?):
Front -- I tried, but had no success! Now I know why I use Netscape instead of Explorer! I even checked out MSFTs website to no avail!

Date: Thu Jun 12 1997 20:28
Big Bird Little Chicken eh.>(Little Chicken eh.):

Chicken Little: Have no fear, we have the best and the
brightest to keep the sky from falling.

Date: Thu Jun 12 1997 20:30
WW @New england>(@New england):
TED: I hope you earned every penny of your inheritance/just kidding since I dont know I cant say. However, you are to be commended on your stick tooitiveness with stks, this sounds like you are not an emotional investor which I think is key and which I can point to in my investment miscues.

My Ques. is why is a smart guy like you living in freezing NE Canada where from your posts you have disdain and even repugnance for your more progressive bretheren in the area. Ever heard of Antigua/Anguilla/Barbados or Trinidad. What a waste of early retirement, but I guess to each his own.

Date: Thu Jun 12 1997 20:41
Crystal Ball StockMarket Bear@Poorhouse>(StockMarket Bear@Poorhouse):
Gaze upon this monthly Dow chart in awe. Makes palladium and coffee look like pikers. Meanwhile, gold sits like a lump of lead.

Date: Thu Jun 12 1997 20:41
Crystal Ball StockMarket Bear@Poorhouse>(StockMarket Bear@Poorhouse):
Gaze upon this monthly Dow chart in awe. Makes palladium and coffee look like pikers. Meanwhile, gold sits like a lump of lead.

Date: Thu Jun 12 1997 20:42
MoreGold @Important warning to NETSCAPE users>(@Important warning to NETSCAPE users):
Netscape bug uncovered

Danish software firm finds flaw that
could let sites see data stored on PCs

From Correspondent Steve Young
June 12, 1997: 6:58 p.m. ET

NEW YORK ( CNNfn ) - A serious new flaw that affects all versions of Netscape Communications Corp.'s popular Navigator Internet browser software -- including the final test version of its Communicator Suite released Wednesday -- has been uncovered by a Danish software firm, CNNfn has learned.

The bug was reported by Cabocomm, a software company located about 100 miles west of Copenhagen, Denmark. The bug makes it possible for Web-site operators to read anything stored on the hard drive of a PC logged on to the Web site.

After the firm reported the bug to CNN Financial News, CNNfn and PC Magazine tested the bug by creating and storing a document on a PC's hard drive in New York. Seconds later, the Danish company read it.

As further proof, CNNfn and PC Magazine created another document which the Danish company was also able to read.

Larry Seltzer, technical director of PC Labs, was among those who helped verify the bug report. He said it would take a somewhat savvy computer user to exploit the bug.

They have to be seeking information from your system and they also have to know the file name. It's not that hard for somebody who's looking to make trouble, but they do have to be looking for it, Seltzer said.

It's serious in that it's in the [actual] browser ...whereas previous bugs generally required the user to have downloaded an additional product, Jim Wise, UNIX administrator for CNNfn, said.

CNNfn's test showed that Internet security firewalls offer no protection from the bug.

Mike Homer, vice president of marketing for Netscape, said the company takes this and all bug reports seriously. ( 83K WAV ) or ( 83K AIFF )

The Danish company says the reward of $1,000 and a T-shirt is insultingly low considering the extent to which the bug report is likely to worry Netscape users.

Cabocomm said it would accept reasonable compensation for the technical information -- or they can send a Netscape representative to Cabocomm and get it for free.

CNNfn, PC Magazine and the Danish company will not release technical details on the bug until Netscape has prepared a bug fix.

The reason CNNfn is not reporting the specifics of the bug is to avoid anyone exploiting it.

Until the bug is fixed, confidential letters, business spreadsheets -- everything on your PC -- can potentially be pilfered.

The Danish company says it won't exploit the bug, but has no idea if someone else has found the same bug and is compromising a system's integrity.

Date: Thu Jun 12 1997 20:43
Here is a chart of the XAU with patented lines and such. Not very exciting. It is reaaly a first attempt at getting charts out of some outdated DOS based real time software. I want to see how it turns out before doing some overlays and other things.

Date: Thu Jun 12 1997 20:46
Ted: yep .. I'm only about a 5-7% goldie. I have the DP and DRIPs for a couple of energy and utility companies ( coal and hydro sources ) for my spouse and children. Basically, the companies that I feel are good 15 year investments. My mining plays are have fun with the house money. My plays are high risk ( half in Bema and half in another company ) . I like a few others but I'm disciplined on the percentage that I will invest in this sector. Heh ... it's fun and risky.

Date: Thu Jun 12 1997 20:46
I guess that was less than a resounding success. I had to convert the file from *.PCX to *.GIF. Something was lost in translation. Evidently.

Date: Thu Jun 12 1997 20:47
TED @WW>(@WW):
WW: Well..well..well! So you decided to deal with a DIME of inheritance...buddy....Why am I wasting away in Canada? I'm now wasting my retirement in Cape Breton...That's your judgement! Not mine....I love nature-oceans-seakayaking and you can't find a better place to do that than her in good old Cape Breton!...I like COLD weather or I would be in a southern clime....Re-the people here....yes, most of them are pathetic but no worse than what I experienced in Putney Vermont after all the flatlanders moved in...and finally I much prefer living in CANADA where the leader is NOT a slime-ball...Again, it's YOUR judgement I'm wasting my retirement as I LIVE life to the max!...and I ain't no LEEMING!

Date: Thu Jun 12 1997 20:48
Ted: and I'm not as cranky as some of the goldbugs because I've actually made money in mining shares this year. Made some small gains in CCH. I don't own now ... but may again. Quality company, IMHO. They are interested in doing acquisitions. I want to wait until after they pull the trigger before I'd would consider them again.

Date: Thu Jun 12 1997 20:52
WW: Where will you be retiring? FL. Let me know so I can move down there ... and hassle you to get out and get a job ... and quit expecting some younger kids to subsidized your golf, shuffleboard, and bochy ball habits.

Date: Thu Jun 12 1997 20:56
EWP: Sounds like we have similar investment styles...I'm approx.10% of stock portfolio in ABX...I've studied UTES fer years and like their correlation to interest rates and thus to GOLD!...AM also in long Bond @ 9.05% ( bought about five years ago ) ...No state taxes on that baby...but next time it hits 6% I'm gettin out...10+ years ago day-traded gold shares and have also used UTES as a trading vehicle...But only trade with that I can afford to lose!

Date: Thu Jun 12 1997 20:57
WW @New england>(@New england):
TED: I said to each his own. What I would like to know as an American Conservative living in Canada are you partaking of their National Health Service, which all conservative Canadians I speak with seem to prefer or have you stuck with the US Private Insurance program.
I know nothing of Chretian but I assume he is good and even as a left wing Liberal I do not like Clinton so you will insight no argument there.
BC is the ultimate in political expediency. If the stk mkt ever goes down significantly his troubles will multiply.

Date: Thu Jun 12 1997 21:01
EWP: yeah, some out there are gettin a little CRANKY...ain't they!..I bought CDE last September and held for a few months and made a few bucks.
Bought HM at X-mas time and held that for about a month or so and made a few bucks there too...Bought ABX several months ago @ 25.5 and ain't sellin until it's at least over 30....and maybe not even then!

Date: Thu Jun 12 1997 21:03
Ted: 9.05% ... can't beat that. Gold is a good contrarian play now ( or so say a lot of experts ) . Longer term ... energy ( oil and natural gas exploration, etc. ) is wiser ( if you looking 15-20 years ) ... and the DP and DRIPs are a great way to dollar cost average a bunch of companies.

Date: Thu Jun 12 1997 21:03
Arms Dealer Now/now>(Now/now):

Ted and WW: Now, now, lets be level headed.
Gun-Runner: Have I got a deal for you!!!

Date: Thu Jun 12 1997 21:08
TED @WW>(@WW):
WW: My are back fer more!...No,I don't partake of the Canadian health care system and am at the mercy of the private U.S. system...I can't believe we have somethin in common....even YOU do not like Billy-Bob....Bravo!...BC is Tony Blair's idol...what does that say about GB?...Now I will ask YOU AGAIN WW....Where do you live in New England

Date: Thu Jun 12 1997 21:09
Steve Puetz>(
WDL: Great story!! Neil Armstrong is a graduate of my alma mater --

Date: Thu Jun 12 1997 21:10
Steve Puetz>(
WW: Good comments. The problem now is: Lend to whom?
Solvent creditors are hard to find these days.

Date: Thu Jun 12 1997 21:13
Steve Puetz>(
Ted: The coming problem for utility-type companies in an economic depression is that they must collect bills from customers who are broke. What seem like solid and sound companies now, won't look the same in an economic depression.

Date: Thu Jun 12 1997 21:15
EWP: Yeah, 9.05% ain't bad fer these days...What I like about D.R.I.P.'S is that they are the ultimate timming device....cheaper they are the more ya buy..ect. ect...takes the emotions out of play!...XON does something lile 75-80% of their business out of country so it's a foreign play to a degree...Have always wanted to own RD and will if the market crashes...great company!...

Date: Thu Jun 12 1997 21:18
Bob Knight Bloomington>(Bloomington):

Steve Puetz: A Boilermaker, eh? Heh heh.

Date: Thu Jun 12 1997 21:19
WW @New England>(@New England):
EWP: I have expressed in previous posts ad nauseam the error in your perception. I just want people to get what they have/are paying for. They should stop borrowing from trust funds now and sock the money away. The 30 year olds are paying in big tine and should expect their money back at least. You and Ted have apparently benefited tremendously from the bull market in stocks which was and is assisted by raiding the SS and Medi Trust Funds thus keeping interest rates artificially low thereby contributing to the increase of your wealth through Govt Largesse at the expense of the SS and Medi paying young people of today. A broad based tax is the least you can do to give back some of the benefit you have derived by the Govt robbing money from todays young. Get off your love of govt benefits and for once take personal responsibility. The hypocrisy is as obvious as it is sickening. This is why the right wing is always doomed to ultimate failure.

I dont think tomorrow's youth should pay I think the beneficiaries of the robbery should pay and the robbery should stop now. A broad based tax is the ans. but really we should have a more direct tax on those who benefit from the theft like the securities industry and their fat cat clients.

I am 30 years from retirement to the Carribbean. Further, I might never retire as seeing financial institutions eat bad loans and use of the Fair Credit Act to sue them when they try to collect is just too much fun. I love counter suing the SOBs when they make even one error with one of my debtor clients. Because of this leverage, I am proud to say some of my clients have staved off Bankruptcy and actually ended up collecting from the creditors. The system works!!!

Date: Thu Jun 12 1997 21:20
Ted: ABX is probably, IMHO, one of the better seniors. HM and PDG are probably looking for acquisitions ( along with some others like CCH, etc. ) . Who? Good question.

Date: Thu Jun 12 1997 21:21
TED @Stevepuetz>(@Stevepuetz):
Steve Puetz: I don't think a full-blown depression is in the cards..I've heard that rap for the past 13 years while the market has gone up...and up...Like I said I practice a life-style of SELF-SUFFICENTCY and I'm ready .......

Date: Thu Jun 12 1997 21:24
TED @WW>(@WW):
WW: My brother is also a lawyer...he is currently in hiding in Bangkok Thailand...

Date: Thu Jun 12 1997 21:26
WW: Has the current retiree collected more than they contribute for programs like Medi and SS?

Do you want somebody in their 20s or younger to pay for our entitlements?

That is what the 17 trillion in unfunded liabilities are all about.

Date: Thu Jun 12 1997 21:27
EWP: KRY....Bema...

Date: Thu Jun 12 1997 21:28
WW: Where is the money you and I paid in FICA? I'll answer that. Govt. IOUs. Who will pay for that. You and I ... and especially those much younger. The financial structure is a ponzi scheme. Don't you agree?

Date: Thu Jun 12 1997 21:33
EWP: Enjoyed talkin to ya and if ya feel like it e-mail me some time..I just noticed this gets a little ADDICTIVE and I gotta get off for a while and go down and listen to the ocean or somethin....WW: YOU still didn't tell me where you it that bad?...another evasive lawyer!

Date: Thu Jun 12 1997 21:34

Let me get this straight. Some guy borrows a bunch of money, finds out that he can't pay it back, and you blame this on the people who lent him the money. Sue their butts off huh? On the other hand, if the financial institution did not lend them the money, why then they would probably be guilty of discrimination. Sue 'em all big and small. Ever wonder why lawyers have a bad rep?

Date: Thu Jun 12 1997 21:34
Ted: KRY is one Peter Grandich is betting his lungs on ( I get mailings from him ) . I guess we'll see. My homerun hitter is Bema ( I hope ) . They are supposed to release updates to their Cerro Casale deposit soon ( 27+ million oz. in gold and a bunch of copper ) that they partner with Arizona Star ( which Bema owns a percentage of ) . IMHO, anyone would have to be nuts to short BGO or AZS.

Date: Thu Jun 12 1997 21:37
Steve Puetz @ Bob Knight>(@ Bob Knight):
Hey, Bob!! What's the story about you walking down the middle of the highway, in the rain, at mid-night, in the shady part of town, after your NCAA loss

Date: Thu Jun 12 1997 21:38
NOVICE and Liz: If you think I am ignoring are wrong as she is out for the evening with friends.....and look at me blaberin away!

Date: Thu Jun 12 1997 21:42
TED @DA>(@DA):
D.A ( 21:34 ) Pathetic....ain't it!...I'm outta here....for a while! BYE..
So you left NYC

Date: Thu Jun 12 1997 21:42
Zeeb Ackron>(Ackron):
Whats wrong with the under '20s paying for our entitlements? We have paid for everything they have worn, eaten, driven, lived in or worked in or been educated in or with.

Date: Thu Jun 12 1997 21:43
Steve Puetz @ WW>(@ WW):
WW: I agree with most of what you say, except: Why have any tax at all?
Whoever renders a service from any person or organization should be the person to pay. Get rid of government, except for defense. Pay for defense with either voluntary service or taxes for those who don't serve.

Date: Thu Jun 12 1997 21:46
Bob Knight Bloomington>(Bloomington):

Steve Puetz: Had to. Woulda broken a chair over
some reporter's head otherwise. I've gotta be
careful. I'm already wanted in Puerto Rico!

Date: Thu Jun 12 1997 21:46
Steve Puetz @ TED>(@ TED):
TED: You do have a good sense of humor!! You need to take the prospect of a depression more severe than the 1930 seriously, though.
Maybe you're too laid-back.

Date: Thu Jun 12 1997 21:47
WW @New England>(@New England):
EWP: 1 ) Stop the borrowing now and use the next 13 years of surpluses to invest in real investments or privatize the system and let the individuals choose where to put the money/In sum, end the IOU scam. The govt, of course, would have to borrow more in the mkt or raise taxes to cover the increased deficit of not raiding the Trust fund. I dont think those Free Mkt Capitalists on Wall St. would like such a policy. EWP Ques. are you for continuing to raid the trust fund and rob current workers of benefits they are paying for/
OR should we stop the raids and be honest and make up the difference by increased borrowing or taxes today and allow the NEXT 13 YEARS of surpluses to accumulate for those who made payment so the system will reliquify and not burden our grand children.

I think a broad based tax which is economically broad enough to not effect final demand will be necessary if they do not stop the fake IOU game. The crisis is really that the GOVT DOES NOT WANT TO PAY THE IOUs. Stop now or a broad based tax later is the only fair solution. Given the Demographics tomorrows politicians will have to figure out a way to pay the workers back for what they have paid in. I would really like to see an end to the IOUs and the Govt go out in the mkts and borrow the extra 200-300 million on 1998/99 and forward it would need without the use of the IOUs. WOULD YOU AGREE TO THIS AND CALL YOUR CONGRESSMAN DEMANDING SUCH ACTION. Do you think Wall St would like this or do you think they would want to continue the IOU scheme and fatten their bottom lines at the expense of the taxpayers.

Date: Thu Jun 12 1997 21:47
WW: I sympathize with your idea that a broad based tax should be implemented to pay for Soc. Sec.

In my view, Soc. Sec. IS a broad based tax. The idea that there is a trust fund is a joke. The system is a means of inter-generational transfer payments and I doubt it will ever be anything else. To fix it would require some one to come up with the 17 trillion and I doubt that is going to happen. When the baby boom bubble starts to become eligible for benefits, I look for a muddle through solution that will be a combination of means based benefits ( which has already occured through the tax code ) , older retirement age, higher current taxes, less favorable benefit adustments for inflation, etc.

Date: Thu Jun 12 1997 21:48
QT @>(@):
Steve P. ,,,
Great idea, just let the poor fight your wars for you. After they've trimmed the hedge and hauled the trash, of course.

Date: Thu Jun 12 1997 21:48
Zeeb: I guess nothing if you feel it is okay to pass on a declining standard of living. I personally feel that society should try to pass on an equal or better life for their children. That won't be happening with the current trend of the old third rail. These programs were designed when people weren't supposed to live much past 65.

Date: Thu Jun 12 1997 21:51
Steve Puetz @ EWP>(@ EWP):
EWP: Ponzi must be smiling now. He probably never imagined what it was that he started. The gov't outlaws Ponzi Schemes, the Gov't creates the grandest Ponzi Scheme ever imagined. More of the gov't attitude of Do as I say, not as I do.

Date: Thu Jun 12 1997 21:52
WW: If you raise taxes or create new revenue grabs, you just are continuing the ponzi scheme. SS is not a pension. It is old age insurance. Medicare is subsidized health care with people living much longer than when the system was implemented. In the 30s - SS will never cost that much, In the 60s - Medicare will never cost that much. SS and Medi are 1 and 3 in govt. spending. Medi will pass defense spending soon.

Date: Thu Jun 12 1997 21:53
vronsky EWP & TED>(EWP & TED):
CRYSTALLEX INTERNATIONAL - Many have been watching the stellar price rise in KRY. Hereís WHY:

Date: Thu Jun 12 1997 21:55
Zweeb Ackron>(Ackron):
My standard of living is infinity better today than it was when I was an under 20. I'm living better than the last King of England. So is every one who is connected to this site. The gloom and doom and ain't it awful and the world as we know it is going to get worse is really a rite of passage here. Until it gets worse things have never been better.

Date: Thu Jun 12 1997 21:55
MoreGold @Steve Puetz>(@Steve Puetz):
Steve, im with you on the outlook for Gold. This is one hell of a tough time to be a Goldbug, but I am convinced, like you, that it will pay off.
The only question to be answered is when.
Meanwhile the masses continue to pump their savings into overpriced equities, and the deception goes on. Maybee 7900 Dow tomorrow,
8500 next week. At these levels the risk reward ratio has to be deadlier than a minefield. Irrational exuberence, naw that went out at the 5500 level ( What happened to Greenspan and his warnings anyway? ) .
Steve, keep on informing those very few who still listen.........

Date: Thu Jun 12 1997 21:58
Steve P.: yep.

Reb: Age needs to be raised aggressively and serious CPI adjustment. Will it happen. Doubt it. Republicans have some plan to raise it to 67 by 2028 or something. That is a joke. Democrats probably have no plan because it flys against their campaign rhetoric.

Date: Thu Jun 12 1997 21:58
panda @>(@):
For the brave only! This graphic is rated 'H' for hazardous to your finances. :- ) ) Now that we have a well defined triangle, which is supposed to break lower... Anyone have comments? Is gold forecasting a 'problem'? Could this be leading to the break out ( up ) ? Technically, we should break lower, but gold seems to be finding good support at $340. What to do, oh what to do?

Date: Thu Jun 12 1997 21:58
Steve Puetz>(
WW: It's too late to save our financial system. Any attempt, now, to pay off government debt would be deflationary -- and start a depression. On the other hand, any further increase in debts will bankrupt the country beyond repair. It's a catch-22. The system is doomed no matter which direction we go. Escape the system, and get into gold and silver coins.

Date: Thu Jun 12 1997 21:59
QT @>(@):
society should try... what is this thinking?
Puetz,,, Government's sole purpose is to protect the strong from the weak. Without it the bent twig of humanity always turns to tear those foundations of burdensome tyrany into the mulch of a new order. The United States is an example of this, is it not?

Date: Thu Jun 12 1997 21:59
D.A. gold.anyone?>(gold.anyone?):

Now that I have learned why gold is such a lousy investment, I think I'm going to buy some. Maybe even a lot. It used to be that at Kitco when an anti-goldbug showed up he got squashed. Now they are revered for their balanced opinions. It used to be at Kitco that when the XAU outperformed gold that this was predictive of a rise in gold. Now its because the stock market it going up and this is just another shorting opportunity, because the volume is weak and some gold fund has not performed up to par. I won't go out on that limb that says gold is going up from here, but I'll wager its not going down. If the boys and girls at Kitco can no longer hoist the flag, there can't be much risk anymore.

P.S. We bought a load of May 625 calls in Silver. Hope they work as well as Palladium.

Date: Thu Jun 12 1997 22:01
Dennis Salt lake>(Salt lake):
Steve: Say something we haven't already heard. Like support for your for your $20,0000 gold prediction--your Hallmark prediction.

Date: Thu Jun 12 1997 22:02
Steve Puetz @ More Gold>(@ More Gold):
More Gold: Thanks.

Date: Thu Jun 12 1997 22:03
Zeeb: I would suggest reading some Richard Lamm, Pete Peterson, Warren Rudman, CATO Institute, etc. if you think things will be so economically sound for the younger generations ( and provide as much opportunity that you and I have probably enjoyed ) .

Date: Thu Jun 12 1997 22:05
WW @New England>(@New England):
EWP: the longevity argument does not hold water as that is why they increased the tax many times over the years in recognition of this obvious fact. SS has to be paid and instead of the IOUss why not mandate that the money not being replaced by IOUs in the new system go into buying marketable Treasury's so there would not be a sudden increase in borrowing. Of course each participant would have the power to sell the Treasury into the mkt upon retirement and collect the proceeds. Or EWP are you for the Federal Govt controlling everyone's property when it helps you.

SS and Medi are Property and that is why they are called Entitlements anyone who meets the criteria can sue in Federal ct for benefits. Just as you could sue the govt if they took your house. Thank God for the judiciary.

Date: Thu Jun 12 1997 22:07
Steve Puetz @ Panda>(@ Panda):
Panda: I'm with you. Gold has had good support in the $335-340 area. The positive sign is than gold hasn't broken below this support -- even though the DJIA keeps soaring. Once the DJIA starts its crash, $340 should be a good springboard for gold to launch it's next buul move.

Date: Thu Jun 12 1997 22:07
Zeeb Ackron>(Ackron):
EWP: I have no need to read any marginal publications. We are riding the crest of the post WW2 prosperity and leaving the under 20s with some debt. What is wrong with that?

Date: Thu Jun 12 1997 22:11
I apologize if people don't think the entitlement quagmire is not important to this discussion group. I think it is very relevant. Govt. will either choose a delationary or inflationary tactic to deal with it, IMHO rather than dealing with serious CPI adjustments and age requirements ( which would probably be somewhat deflationary itself ) . The deflationary approach to promote slow growth to keep interest rates and inflation down won't grow the economy and revenues fast enough to keep up with the spending train. The inflationary approach would pretty much level the middle class and poor.

Date: Thu Jun 12 1997 22:12
Steve Puetz @ QTb>(@ QTb):
QT: The function of government is to protect individual liberties. It has been proven time-and-again, that the more individual freedom people have in a nation, the more prosperous a nation becomes. Not only do the strong and intelligent, benefit -- but so do less talented people.

Date: Thu Jun 12 1997 22:13
Zeeb: come on ... it is a lot more than a little debt. I guess you feel it can just be inflated away?

Date: Thu Jun 12 1997 22:13
Eldorado @the scene>(@the scene):
Steve Puetz -- I thankyou for the fine regard you give to my understanding of of this dismal debt based, slaveryment, monetary system we currently live under. I too admire your postings! To a great degree! I would most certainly enjoy believing that 'there is no problem', as I'm sure most goldbugs would. I would also, and most certainly, enjoy a good discussion from one of those mentalities as to why there is no problem! If that person were REEEEEEALLLLLL good at the explanation, I might even be tempted to fall for it, except for the knowledge that ALL debt based systems already have their end written with their beginning! No ifs, ands or buts about it! So, maybe, one smart individual out there can set me straight, including my previous sentence. I would most assuredly welcome it! As always, lurkin' and ready! Steve, as why I do not post more, perhaps when Bart gets his 'search' up and going, you'll go back and peruse. I've got 'a few' back there! But, at times, one gets tired of so much duplication, as I said to Earl a few nights ago. Perhaps I'll again 'get with it'. Again, thanks!

Date: Thu Jun 12 1997 22:15
Novice @Port Credit>(@Port Credit):
Ted: Kristine's out tonight, eh? Thought you were unusually active on this site tonite! Hope she's not bein indoctrinated by Breton pinkos... BTW, a positive writeup on yer ABX in latest Incvestors Digest ( 6 June issue ) . Says Barrick cheaper than its peers, and performance should improve during second half of this year.

Overheard you and EWP discussing Bema and Arizona Star a bit here this evening, and who may be in line to acquire Star and the Cerro Casale property. Holding both BGO and AZS, I follow the SI Bema thread pretty carefully. While the betting there seems to be on PDG, a few have noted that Bema's Clive Johnson is in Europe right now at the same time Homestake's Jack Thompson is there too. The latter saying he's looking at acquisitions ( as well as further exploration and improved performance at existing operations ) . Will know sooner or later the outcome...and it better be sooner the way Star is sagging right now.

Oh, one final thing...we're of to the Bruce Peninsula tomorrow a.m. for weekend of shoppin'. I can hear the criticisms of me work ethic now...:- ) )

Date: Thu Jun 12 1997 22:18
WW: When does your raise tax rates theory approach a person paying most of their wages to support the govt? Is that good for economic growth and competitiveness in a global economy? Do you advocate cutting spending to make up for the use of surplus trust funds? About 143 billion in different trust funds were used last year mask the deficit size. Where would that be made up? Would you just have it as deficit spending?

Date: Thu Jun 12 1997 22:19
Steve Puetz @ Dennis>(@ Dennis):
Dennis: That fact that gold may rise to $20,000 may be somewhat misleading. It's not so much that gold will rise, but that the value of financial assets will collapse. Fear of default on credit-market instruments wiil be intense. Stock market losses will be unbelievable for most. The scramble to get into gold will be extreme. But with physical supplies so limited, gold will skyrocket. It will be a lot like the platinum squeeze of the past weeks -- only the squeeze will last for over a year.

Date: Thu Jun 12 1997 22:20
panda @>(@):
Steve Puetz -- I keep on wondering how much longer can this credit bubble be pumped up? The Dow, S&P500 and 100, continue to rise. The Amex oil index continues to rise even with crude falling. If you bought one XOI contract yesterday, ten minutes before the close ( June 420 Call ) and sold it today ten minutes before the close, you would have made $575 less commisions. Why work? Where did the 'value' come from? What's wrong with this picture? I know of one person who has about a thirty percent return so far, in an S&P 500 index fund, held less than a year. This is considered a 'good' return. Not, 'abnormal' return, just good. Interesting times are coming... Then again, maybe their already here.

Date: Thu Jun 12 1997 22:22
Simple Simon Social Security>(Social Security):

Why doesn't the government buy half of the US gold
production with incoming Social Security Funds, that is;
before they give the rest away? It will help the real
value of the US gold stash rise and solve a part of the
Now rather than give the rest of those funds away, let
the indivigual invest the rest in Swiss Annuities, the
PM's, but under the same restrictions as IRA's and
401-K's. Swiss insurance companies are wise, our
government can demand, that they do not invest where it
will hurt.
Next, limit fractional reserve banking and pay off the US
Treasuries ( in increments ) with government issued money.
Then slowly return to a gold backed currency, or real
Can't see $20,000 gold, because who would be able to buy
it, or we may be buying groceries using trucks formerly
used to haul ore from open pit mines.

Date: Thu Jun 12 1997 22:23
JohnC Brisbane>(Brisbane):
Thanks for your reply yesterday on Forward buybacks.
I echo your comments that it does seem to be getting more bearish around here ( amazing at Kitco ) .
Also your SI Calls would have a nice low delta ready to go to work for you on any rally, good luck with the position.
Happy Trading All

Date: Thu Jun 12 1997 22:26
Steve Puetz @ Eldorado>(@ Eldorado):
Eldorado: In my community, my ideas are scorned and laughed at. Sometimes I feel the same way on this Web-site. But, it's nice to know that there are a few people out there that do think the same way I do. By your comments, I assume that you believe, as I do, that we are headed for an extreme deflation -- more severe than the 1930s.

Date: Thu Jun 12 1997 22:28
panda @zzzzzzzzzzzzzzzzzzz>(@zzzzzzzzzzzzzzzzzzz):
Steve Puetz -- It seems I can't even spell correctly now! their = they're. With that said, and rhetoric flying, it's time to give the eyes some rest. Good night all and remember, Dow 4,893,485,645,436,345 is only a few days away! Buy now! Tomorrow is FRIDAY the 13th. :- ) ) :- ) ) :- ) )

Date: Thu Jun 12 1997 22:31
Eldorado @the scene>(@the scene):
Crystal Ball -- Gold may look like lead at this point, but like a Gooney Bird, it will eventually get its ass off the ground! and he'll be heading straight up to blue skys! Count on it. Just don't ask me how long of a run-way it'll need!

Date: Thu Jun 12 1997 22:33
Steve Puetz @ Panda>(@ Panda):
Panda: The fact that retail sales have declined for 3 months in a row indicates that recession may have already started. Hence, the coming stock market crash is probably close-at-hand. The major part of all-but-one stock bears has been contained in the July-October period. A lot of people are looking for an October crash. However, July is just as likely.

Date: Thu Jun 12 1997 22:36
Steve Puetz @ Simple Simon>(@ Simple Simon):
Your idea is too simple and down-to-earth for the government to consider it.

Date: Thu Jun 12 1997 22:39
Steve Puetz @ Eldorado>(@ Eldorado):
Yeah, but that gold-jet is getting closer to the take-off point every day.

Date: Thu Jun 12 1997 22:39
Dennis 50Klight>(50Klight):
Steve; You said it: $20,000 gold. Squeeze you bet it is. Get off the bike what you say here goes into the archieves.

Date: Thu Jun 12 1997 22:40
Eldorado @the scene>(@the scene):
Steve Puetz -- Re: your 22:26; Yes I do, at some point in time. Probably 'more' sooner than later. I would really like to know how it can be any other way! Anybody?

Date: Thu Jun 12 1997 22:41
QT @>(@):
Puetz,,, I am sorry. I must admit I was a bit harsh there. I mean we all know that strength, financial or otherwise, naturally implies a native intelligenge the lessor born simply must feel thankfull to be near. I suppose they feel safer, more secure. It harkens them back to some genetic memory of the tribe near the fire in the cave. They watched the alpha-male drag the apendage of some corpse in to warm it by the flame. Watched and waited until his/her time to have at it. And all the time they waited they probably thought about how much they were going to benefit by being a member of this tribe with the great hunter.
I have posed this in such a way that those Ayn Rand fans out there can run one way with it, the way of all great Leviathan's, and I have used the phrase tribe so the Marxian socialists, or the democratic federaliists, can see it as a parallel to the fiscal dilemas which haunt us to this day.

In all good fun, of course. However I digress. ( Isn't it really scarey sometimes when you notice how of the character of a site's dialogue can be defined by the degree of intellectual narcissism the inmates of the site allow? ) What I was really going to say was congrad's my boy. I read a great review of your TC in the Soldier of Fortune zine. The editor, has some Prussian sounding name as I recall, likened you to the Tom Paine of the mercenary cum militia back to the cavers set. Bit of an acolade that. I do think he went a bit overboard though. I mean your page position, opposite the cover story essay about the Waco/ McVeigh connections, was a bit declasse' if I may say so myself. But who cares really, at least the people who will survive the great collapse will have somethig to barter with over the corpse of this civilization you are so willing to toss aside out of hand.
This really has nothing whatsoever to do with the metals which drew me here, but then on every picnic a little honey must be spread. Cheers.

Date: Thu Jun 12 1997 22:42
Steve Puetz @>(@):
Good night all!! It's been fun, and interesting.

Date: Thu Jun 12 1997 22:45
WW @New England>(@New England):
EWP: I AM AGAINST EVER!! RAISING TAX RATES ON ANYONE TO MAKE UP THE SS AND MEDI DEFICITS!!!! I am for stopping the raids and privatizing the system so people control their own money/ Granted this could cause some short term financing problems for the Feds. Absent that I propose a broad based tax which will be so small in effect on the ITEMS taxed that it will have almost no econmomic effect on demand for the items taxed. Not supplying SS and Medi will cause an Econ depression from its effect on reducing final demand. Further SS and Medi fraud should be punished by mandatory jail sentences. The price insensitivity caused by these govt programs is what is making Health care unaffordable. Addressing this issue should be NUMERO UNO!
I am for a small tax on things to fund the program and not a rate increase. This will only be necessary if the kitty continues under IOU attack.
Why use IOUs why not just mandate the buying of marketable Treasuries and let the retirees proportionately cash them in when they reach retirement? Hmmm...

Date: Thu Jun 12 1997 22:48
Eldorado @the scene>(@the scene):
Steve Puetz -- I'll be reading RJs rational next week for his reasons why the western financial system ( If I read that correctly ) will not collapse, with a very keen eye! I know of a lot of reasons why THEY don't want it to collapse, as well as any sane person wouldn't want it to. I'm really curious as to how they might, even remotely, pull it off! Comment ( s ) ?

Date: Thu Jun 12 1997 22:49
Bernie The 1%>(The 1%):
Whenever I hear on this discussion group how sorry we are for those
young people who must pay for current retirees who have not contributed
enough to pay for their entitlements..... it makes me SICK. WW has it
right! Where has the money gone? It has gone to the elite 1% of our
population the super rich. I doubt very seriously whether anyone on Kitco
has ever met one of the super rich, yet many on this site defend them,
why? This one percent holds 90% of the wealth. Please let me repeat
that, one percent owns 90% of the wealth. And if you believe they got
their money by just hard work, or by way of the fair capitalistic
system, I have a bridge to sell you. Ninety percent of this one percent
inherited money and cheated to create and increase their holdings. As far as I am concerned if you want to find money for future entitlements, tax this one percent until they are part of the next nine percent. What does one man do with more than 1 billion dollars anyway? After the first
billion it is all about power and ego.

Date: Thu Jun 12 1997 22:54
What about the fundamental actuarial problems of the system? You never answer those questions ( i.e. Does a current recipient get more than they put in, etc. ) .

A small tax that noone will feel? What small tax can come up with the money needed for the unfunded liabilities and the use of surplus funds?

Date: Thu Jun 12 1997 22:55
WW @New England>(@New England):
GO Bernie!!!

Date: Thu Jun 12 1997 22:57
to Bernie .. Sanders or Ward?

A man with a billion dollars creates jobs or spends it in the private sector of the economy. A govt. with a billion dollars creates future obligation for the taxpayers.

Date: Thu Jun 12 1997 22:59
WW @New england>(@New england):
A 5-10cent VAT on everything would do alot more than the trick. Go figure the numbers based on the economy. Th problem is easily solved with the appropriate political will.

Date: Thu Jun 12 1997 23:00
Nighty night all ... don't let the goldbugs bite.

Date: Thu Jun 12 1997 23:01
WW: and in 5 years that VAT becomes 0.25 and so on and so on ( and outpacing inflation ) .

Date: Thu Jun 12 1997 23:07
Couldn't believe XAU was running up on the end and just had to take a stab on the short side....With tomorrow being settlement on the options, figured the big boys had some options they needed to zero out at 105... Oh well guess tomorrow will tell....

Date: Thu Jun 12 1997 23:12
Bernie Tax the 1%>(Tax the 1%):
EWP....A million people with 1million ( 1 billion ) also creates jobs and spends it in the private sector, probably much more efficiently and FAIRLY than the billionaire. I do not believe taxing the 1% super rich will create future obligations for the bottom 99%.

Date: Thu Jun 12 1997 23:15
QT @>(@):
EWP,,, I suppose it's too late to point out to you that it is only under the gracious beneficent protection , nuturing ethics of liberty and freedom which the Government provides your billionaire that he has his ability to exist. The Government allows him to exist. The Government can, and they are fickle creatures, these, choose otherwise.
All this take it-for-granted, feel-good pop culture shooting the mouth from the hip jingoism is too much to bear at times. It is dull and lacks vigor. I wish you'd stop it. It's beneath you. Think things through and then post something a bit more cogent, will you?

Date: Thu Jun 12 1997 23:26
Vieserre home>(home):
EARL ET AL: I try not to post on the technical side of the market, preferring to leave that to those more skilled. But I would like to pass these comments on for your consideration.

Dow and S&P are making new highs in a parabolic sweep that have reached vertical lift while the Utilities have yet to come close to matching their 93 highs and the technology leaders which represent the major growth in the GDP are being distributed, displaying a pattern and cause for at least a sharp correction in the Dow.

News on what the FED will be doing in early July will begin to emerge in the Media. Although all present price reports makes for a rosy looking economy, the FED must consider the effect of emerging signs of impending inflation rising from an over-heated labor market, GDP output gap and wealth brought about by a sharply rising stock market which normally takes 12 months or more before being reflected in the PPI an CPI. What is FED to do? If it does nothing, these inflation forces will have more time to grow and the FED incurs the risk of being behind in the yield curve. In addition, the market will likely continue its irrational exuberance, if I may use this now trite phrase, making it more difficult to control any correction and the FED itself will increasing look like it has relaxed its guard against inflation and pandering to the political wing. If the FED surprises the market and elects to raise rates, how will this affect the afterburners of the Dow skyrocket and cannot the FED be concerned about being blamed for any blowout.

The XAU has been generally in a horizontal trading pattern since early may while bullion has been downtrending and the stock market rising. While bullion and silver settled near intermediate trend lows today, the XAU diverged higher and closed near its daily high and significantly higher from its recent low of 90+ and is approaching upper resistance of 106 with gold off over $2.00.

To me, these are all bullish possiblities for the metal. I take the approach that equities demonstrate a view of the longer term horizon while bullion the near term horizon. And IMO the recent relative peformance of the XAU should not be overlooked as it may be evidencing that investors with a longer term view are beginning to accumulate notwithstanding falling bullion, falling silver, an exuberant rising market, falling oil, rising bonds, declining CRB, and a parade of modest to low numbers on present inflation.

Date: Thu Jun 12 1997 23:27
The only 2 XAU stocks doing well today on the close were BMG and NEM...XAU up almost.70 with gold down $2++....That added to option expiration day tomorrow made it smell fishy to me....

Date: Thu Jun 12 1997 23:28
D.A.: I harbor mixed emotions over your earlier comments regarding the recent level of goldbug solidarity. I am posting this in response to your comments but it really is an impersonal statement of opinion to all hands. A goldbug manifesto more than anything else.

The passions seem to me to running at familiar levels. The thread has been genuinely positive for the past week or so with a great deal of new opinion to pass through the filters. Judged various reactions, some was readily digested and some others were akin to pulling an elephant through a knothole. As it should be.

New thoughts regarding the near term state of gold seem to be accepted in a neutral sense. At the same time its a good thing for closely held opinions to given a good shake now and then. Mencken once said that a friend is Someone who shares the same superstitions. There is a real danger to becoming friendly if it means that we are unable to accept new superstitions. .... Rancor is obviously not the converse.

I have been a goldbug for far longer than it should be healthy to be one. I made a chamber pot full of money on gold stocks in 1993 and rode them right over the top and down again. Why? Because I'm ( was ) a died in the wool goldbug. Now, I'm a goldbug ( PMbug ) ONLY because it is be the place to be for some time to come. But I no longer clasp it to my bosom. It's all trade bait. To be bought and sold as circumstances dictate.

If we are truly headed for economic upheaval, then it would be prudent to consider PMs a long term hold. Maybe. If not then it becomes merely another trading vehicle. The only thing that should be bought and held, without regard to the future, is a cemetary plot. IMO.

My opinions have changed and will continue to change, in large part because of the great minds and opinions expressed in this forum and your's are among the best. If we have a lick of good sense, we will learn, more than we deserve, from those who violate our sense of comfort and order. Occasionally, we are also served well by those with whom we disagree. It would bother me a great deal to know that someone else would make the same mistakes, boneheaded mistakes, that I have made in the past because he did not have access to the best that others have to offer.

For the world of precious metals and a whole lot more, there is nothing in the known universe that compares with this forum. If it doesn't appear here, it will likely not appear anywhere else. I only wish it had been available in 92 and 93. If it had been, I would be able to present with a larger case of arrogance than is presently possible.

In the end, an honest difference of opinion regarding PMs; is far, far better than a continuous thread conducted by loose cannons posturing as champions of the downtrodden and/or the guarantors of our liberties,.... sans pro bono. Of course.

Date: Thu Jun 12 1997 23:29
Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )

Looks like a local double bottom. Possible BUY point!

Date: Thu Jun 12 1997 23:37
Bernie: Sorry chap - I'd surprise you. I had lunch with a
guy from Austrialia a few years ago. Texas BBQ from the Exxon gas
station in Junction Texas. He was picking my brain about a new recycling
technology we were developing. I wish I could remember his name - he was
chairman of the board of one of the largest companies in Austrialia.
He got his start in the cattle business - I remember something about the
ranch being the largest single cattle ranch in the world! When you're in
Texas - that's saying something. Maybe someone from downunder can help
me out. He would be close to 85-90 today. What are the 5 largest
publicly traded companies in Austrialia? His net worth was above 3 billion I was told.

Oh yea, he was searching the world looking for recycling technologies
to bring back to Austrialia. He said waste/garabage is a huge problem
there. I don't think he was there looking to make a buck - he was trying
to help. No one goes to Junction to make a buck. He was really
nice. If I wasn't told who he was or see the limo he drove up in I would
of taken him for a local. He did talk funny though.

Date: Thu Jun 12 1997 23:39
TED @Capebreton>(@Capebreton):
EBN Gold @ UNCH and Silver down a cent....Front: I get unknown extension on file when I click on yer thingy....Steve Puetz ( 21:46 ) maybe I'm too laid back...hahahahaha!

Date: Thu Jun 12 1997 23:40
EARL.....AMEN !!!!! To capitalize to the maximum, we must be traders. There is money to be made in the markets at all times. Up and down. Grains and metals. Stocks and bonds. Meats and woods. There is a time and place for all commodities to shine and the same for all to be tarnished. The greatest mistake in my trading career is to become focused on one commmodity to the point of excluding the rest. We must continually have an eye toward those shining, but also to be considering our next play. That is a lesson learned from many years, some as a trader of the markets and some as a narrow minded person focusing on one area and waiting for its return to the limelight.

Date: Thu Jun 12 1997 23:44
Eldorado @the question>(@the question):
Panda -- Re: your chart of 21:58; FWIW, There's a lot of ways to draw a line. You are right in that there is good support at that level. Doesn't particularly mean that it won't be busted in a fairly quick spike, or something more severe. It should be a good place to buy though. Any failure should be quickly, and maybe fairly inexpensively, be rectified IMHO. Some of us though are expecting some lower numbers. Perhaps, or not, they'll show up. But, presumably, your chart line wouldn't be off by far I think. But, I still like a spike, wherever it might go! Good Trading!

Date: Thu Jun 12 1997 23:50
TED @capebreton>(@capebreton):
Nailz ( 23:40 ) Good post...I've made the same mistake in the past by focusing on something in particular and waiting...and waiting...but the time just wasn't right for that trade or investment...

Date: Thu Jun 12 1997 23:55
TED @tort>(@tort):
Tort: Got yer missive and I ain't no heavyweight either...Great description of last nights game!...were my thoughts....exactly!...Good luck with the broker...REB: Hats off to MJ!

Date: Thu Jun 12 1997 23:59
TED @bedtimeforbonzo>(@bedtimeforbonzo):
EBN Gold has been gaining strength tonight and has now turned the corner into positive territory...up .20!...Goodnight too Tarnished!

Date: Fri Jun 13 1997 00:04
WW @New England>(@New England):
Double Dittos to QT and Bernie for their latest cogent and, for the conservatives ( unfortunately for them ) , undeniably accurate points. The truth will win keep the faith! Nite All!

Date: Fri Jun 13 1997 00:04

As you are aware, physical systems become increasingly unstable as the slope of activity approaches infinity. The present DOW is a fair real world, approximation. It's bubble time and there is not a thing to be done to change it. ....

As a consequence, and with a certain amount of shame, I confess that I pay almost zero attention to the comings and goings of movers and shakers and the possible consequences of their actions. I think that we are in a very special time in economic history and there is nothing to be done to change it. Monetary authorities are literally caught between a stoop and a squat.

It is as if a locomotive is set in motion and nothing is to be done until it runs out of steam or track. All we can do is stand on the side and make bets as to the outcome and when. It's now gonna run its course. For good or ill. Please understand, I mean to he a fatalist here. Not a smartass.

I would be more comfortable with your XAU position if the volume of activity were higher. I don't think the major players even traded over their normal complement of 1 million shares today. It's entirely possible, as others have said, that the DOW is taking pressure off the gold stocks and the XAU will likely begin to reflect the gold action when the DOW slacks off a bit.

Earlier today I agreed with Nailz that it looked like the XAU was about to return for a retest of the low 90s. I no sooner said it than the damn thing broke above the short term downtrend line and remained above it at the close. I tried to post the chart but now discover I need some conversion software. .......... The format you have is not the one you need. The format you need is not the one that should be used. The format that should be used is not available at any price. ..... ( :- ) ) ( With attribution, via paraphrase , to Alice on Avid )

Date: Fri Jun 13 1997 00:06
ark saltedcore>(saltedcore):
STEVE PUETZ: Thanks for the ointment, re my noonish post.
I feel better now. TO ANYONE: Looks like the Dow is puffing up like
the Neki. Will a tiny pin let the air out? As I recall
the Black Monday in '87 phone lines were jammed, those
needing to replenish their margin accounts could not, some
blew their brains out. This time, internet trading systems
will will be all crammed or slowed to the point of madness.
If one has a decent profit, take it now and avoid the blood

Buy gold at these low prices. How long of a base line
do you need?

Date: Fri Jun 13 1997 00:10
RJ (?):
O for a Muse of fire, that would ascend
The brightest heaven of invention:
A kingdom for a stage, and princes to act
And monarchs to behold the swelling sceneÖ
Leashed in like hounds, should Famine, Sword, and Fire
Crouch for employment. But pardon, Gentles all.

I have come to share. I would ask anyone to find an effort to sell in any of my postings. Iíve have not even tried to sell my opinions, just state them unequivocally. I have read these pages for more than a year before ever announcing my presence. There were times, when what I read here, would cure any insomniac. But I kept reading, for the pearls of wisdom hiding amongst the flotsam. I stuck my fingers down a lot oysters throats to find these pearls though. ( never mind me, Iím feeling particularly hostile towards metaphors this eve ) . So I came to shake your tree. A few of you, napping in your branches, looked down to see what appeared to be a bear snarling at your trunk. What you may have missed, from your lofty vantage point, is the bull, with horns buried to the forehead, up that poor bears ass. Maybe thatís why the bear was making all this ruckus to start with.

I have asked for no reward, more rightly, I have asked for contention, for it is there we may all glimpse a common truth. And who questions my motives? Forgive me for trying to build a foundation on facts, and not fears, supposition, or half truths. Those areas to nebulous to be declared correct or no, I just told you what I felt. Some have said this was a breath of fresh air. IMHO, ( IíM Hardly Obsequious ) I think so too.

Date: Fri Jun 13 1997 00:17
Earl - You have a poets heart, and the keen eye of a sculptor.

Date: Fri Jun 13 1997 00:19
Big Big Trader>(
Many of the June XAU Call writers are going to get
blown out next week. This will start with a big
gap up in the XAU tomorrow. Gold stocks wont be
cheap much longer.

Date: Fri Jun 13 1997 00:23
Eldorado @the scene>(@the scene):
RJ -- And I gave you some contention. Rightly or wrongly. A part/or all of which I would like to get resolved one way or another. But, part of that may come in your next weeks 'posting'. But, in the nearer term, namely tonight, what do you have in mind for the 'common truth'? P.S., Your prose almost equals Earls' eloquence. I take my cyberhat off to you!

Date: Fri Jun 13 1997 00:31
John Disney>(
For Steve Puetz
YES - Cancel all taxes. Privatize the army and the
police. Eliminate the political class who are the real
problem NOT the rich 1 per cent that Born Again Leninist
BS Bernie hates so much. After that, I suggest grant
independence to Vermont.
The above represents long term objectives. Short
term, I respectfully suggest we ignore all the silly
crapola that comes in from Bernie and Wacker. I really
don't care what they think and neither does the 1 per
cent. Why anyone is polite to these guys is beyond me.
Wacker is obsessed with Social Security - thats not
very pertinent to precious metals - or am I missing
something? Bernie's idea of confiscating wealth has
already been tried in many places Cambodia, N Korea,
Russia, China. It didnt work very well. Back in your
holes guys. This stuff is irrelevent, other than to
reveal the convoluted workings of the liberal mind -
i.e. to be envious, to repress individual freedom
wherever possible, and to impose their bent views on
others because they are morally correct since greater
than 50 per cent of the population has been driven by
similar self interested views to vote the same as they did.
They represent the true new Fascism. Dont let them feed
on your intellects. Ignore them and let them waste their
energy writing to a blind audience. Save your ammo, you
may need it for something more serious than Mister Wacker.

Date: Fri Jun 13 1997 00:43
Auric Audience>(Audience):

Earl, Vieserre, RJ, Eldorado etc.: Thanks for a
stimulating dialogue tonight. Truly informative!
Even poetic at times.

Date: Fri Jun 13 1997 00:47
FIBO @anyone who is still awake.>(@anyone who is still awake.):
With all due respect to our resident guru, APH, the XAU will see 120 before any visit ( if ever again ) back to the mid 90's.

BTW, When was the last time the gov't issued a new 50 dollar bill?
Answer: 1929!!! Coincidence? I THINK NOT!

Date: Fri Jun 13 1997 00:48
RJ: A compliment most graciously accepted. ...... Though, if the 'E' stood for 'Ebenezer', my purse would be better served.

Date: Fri Jun 13 1997 00:49
RJ Did I say next week>(Did I say next week):
Eldorado - If you were referring to the first part of my 00:10, hat's off to the Bard. The rest was mine. Thanks.

Date: Fri Jun 13 1997 00:56
Eldorado @the scene>(@the scene):
RJ -- Actually, I was referring to all of it! Very nice!

Date: Fri Jun 13 1997 01:00
Eldo @00:23: It's interesting that you should bring up writing style. Only moments ago, I emailed a friend on that very subject. The point of which was, that it is easy to take a penny's worth of substance and pump it up to a ten dollar bill. To which I plead guilty. In the end, it only serves to diminish Bart's bandwidth ratio. ..... Style should differentiated from substance. As messenger from message.

Date: Fri Jun 13 1997 01:04
ACW ominousreport>(ominousreport):
This ominous report appeared on Yahoo Gold.

Thursday June 12 7:55 PM EDT

Fed-issued paper advocates government gold sales

WASHINGTON, June 12 ( Reuter ) - A new Federal Reserve study argues that the United States
and other governments should sell off their gold reserves to reap huge benefits for their economies.

``Government ownership of gold does not contribute directly to the ( general ) welfare,'' the
discussion paper, authored by a Fed economist and three other analysts, says.

The paper was issued by the central bank here but is the sole responsibility of the authors and
should not be seen as reflecting the views of the Fed's board.

Fed Chairman Alan Greenspan is a long-time proponent of a return to the gold standard, although
his views are not widely shared at the central bank or generally among economists.

Governments hold some 1.11 billion ounces of gold. U.S. holdings alone amount to 262 million

The Fed study comes as a number of governments are exploring ways to make better use of the
millions of ounces of gold they hold in reserves.

As part of its effort to participate in European monetary union, Germany is revaluing its gold
reserves. The International Monetary Fund may sell off some of its gold holdings to help finance a
lending program for poor nations.

According to the study, if governments sold their gold immediately, rather then holding it, the
economic gain could come close to $370 billion.

Much of the benefit would accrue to the governments themselves in the form of additional revenue.
Gold consumers would also benefit but mining companies would lose out.

The study calculates that an immediate sale of all government gold stocks would push the gold price
down to $309 per ounce from an assumed $350. The gold price closed in London on Thursday at
about $342.50.

The paper acknowledges that there may be some advantages to governments holding gold, but it
argues that those advantages are eroding.

``The importance of gold as a possible future reserve asset, as part of a war chest ( in case of crisis ) ,
and as a strategic material has clearly diminished in recent years and will, in all likelihood, continue
to diminish,'' it says.

If the U.S. and other governments nevertheless were worried that they might lose out on such
advantages by selling their gold now, they could consider loaning it out instead, and gradually
disposing of it, according to the paper.

The study admits that there might be some difficulties in following such an approach. But it argues
that the potential benefits might well outweigh the costs.

The study was authored by Fed economist Dale Henderson, Massachusetts Institute of Technology
student John Irons, University of Michigan professor Stephen Salant and Sebastian Thomas, a
research analyst at Miller, Anderson and Sherrerd.

Date: Fri Jun 13 1997 01:12
John Disney: Good have you back. Damn BLYDY is making my trigger finger itch. ............. Per this evening's post; I am reminded of your advice, on a like evening, when I was also given over to similar attacks upon The Anointed. I did take it. The advice that is. As you say, it is a waste of valuable energy.

Date: Fri Jun 13 1997 01:15
Eldorado @the scene>(@the scene):
Earl -- Ahh, but you combine both style and substance so well! I don't believe that Barts' bandwidth, or readers eyes, will be particularly hurt by it! It's a fine learned art that all should strive to better themselves with, IMHO!!! You taking pupils?

Date: Fri Jun 13 1997 01:21
ACW: Post of the evening! Have to love it. No? .... Sell it or better yet lease it and never see gold or money again. Just another attempt to talk the gold market down. .... Probably will succeed too.

What would be most interesting is to know how just much the authors really believe, in what they are saying.

Date: Fri Jun 13 1997 01:26
Eldo: You silver tongue devil. ... Remember the political commercial from a few years back: Where's the beef?.

Date: Fri Jun 13 1997 01:31
yellowdog @ACW-govt gold sales>(@ACW-govt gold sales):
ACW: my only question is who would buy all of it? BT?

Date: Fri Jun 13 1997 01:33
Eldorado @the scene>(@the scene):
ACW -- Why do these 'studies' etc. always come out at the bottom of the markets? Seems like if one should be selling, it would be at the other 'end' of a market move! I call news like that a 'key' type indicator! The news might move the metal down very short term, though I wouldn't necessarily count on it. But should it do so, I'll be there buying at THE bottom!

Date: Fri Jun 13 1997 01:49
Eldorado @the messenger>(@the messenger):
Earl -- You state: Style should differentiated from substance. As messenger from message. As important as a message is, I believe that HOW a messenger states it is at least as important. Probably more so! Maybe it's a good thing we all aren't Patrick Henrys as we might get tired of it, but given that we aren't, some are always needed! Talk about 'sending a message', whether it be in a court room or in an assembly hall! That man could command attention! And it wasn't that the people hadn't heard the message before. It's that their hearts and souls hadn't! That's the difference!

Date: Fri Jun 13 1997 02:12
Eldorado @one more>(@one more):
Earl -- An short addendum to my previous: That's where style 'becomes' substance!!! Thus, as long as humankind remains an emotional being for the most part, it may take a particular messenger to deliver a particular message.

Date: Fri Jun 13 1997 02:21
Mooney @ACW,>(@ACW,
ACW-Good To Hear From You My Friend! - BUT; This nonsense is almost belly-laugh material, The study was authored by Fed economist Dale Henderson, Massachusetts Institute of Technology student John Irons, University of Michigan professor Stephen Salant and Sebastian Thomas, a research analyst at Miller, Anderson and Sherrerd.
Do these four or five people now control the World?

Date: Fri Jun 13 1997 02:22
Eldo: Just a personal point of view but style should be the coating on the cod liver oil pill. It shouldn't diminish or distract from, what's inside. Only make it easier to 'get it down'. The style itself will generally reflect the stylist. Good or bad. .... Hardly a revelation, I suppose. But consider the expressive modes here. Even if someone were to post without a handle, I think it would be easy to recognize the source. Assuming, of course that it was more than a few words. Examples are both unnecessary and unwise. .... Where was I going with this See what I meant about 2 cents to 10 dollars? Everything after the first sentence was only embellishment. ..... The pillow calls.

Date: Fri Jun 13 1997 02:30
Eldo: While I understand, Amigo, I really do believe, more than I believe anything else, that we are all better served if we can separate the world of ideas from our emotions. A tough business for all but that is no reason to do less than our level best to avoid mixing the two.

Date: Fri Jun 13 1997 02:32
Mooney: It makes no difference. If they have their way, they will control ours. ....... ( :- ) )

Date: Fri Jun 13 1997 02:47
Bernie Tax the 1% with 90% of wealth>(Tax the 1% with 90% of wealth):
John Disney.....I look forward to your posts, you bring an insight to
this discussion group about South Africa, not only about gold but
about the social issues of South Africa and the attitudes that have
been so disruptive to South Africa. I do not agree with everything
you say but I will never ask others not to listen to you because I
disagree with what you believe.

Date: Fri Jun 13 1997 05:29
The Last Goldbug >():

ACW: That one is enough to make Mr. Greenspan quit, with
such erudite advisor's, why would he want the job.

Date: Fri Jun 13 1997 05:32
Maxt Give YOUR money first,, then ask me>(Give YOUR money first,, then ask me):
BERNIE - Stop and think about this.... If you had an opportunity to do something that would make you money, and you planned and planned and laid out your plan, then carefully implemented the plan's steps, threw in tens ( or hundreds ) of thousands of US Dollars, worked 80 hour weeks for 3 years straight, then measured the results, and adjusted the mixtures to maximize the results, and if these same results become the products we consumers purchase ( both services and hard goods ) , and you did this unhindered in any way, the result would be competition within your industry to develop less costly, more efficient ways to produce, thus lowering the price and increasing the quality of all consumer goods, right? And if an employer is unfair, workers can freely move to a competitor. Remember - employers must remain competetive in regards to workers, salespeople, secretaries, estimators, accountants, etc. ( or they'll seek employment where better conditions prevail ) , as well as remaining competitivley priced for the end consumer, so that the product is considered a bargain. This is not easy. In fact, we must not assume that most rich people amassed their wealth by inheritance or tom-foolery.
In fact, the rich people are being blamed for their wealth instead of congratulated, because they actually DID something constructive consistantly, and at a great cost. Compared to people like the Kennedys who amassed their wealth through daddy, who was a bootlegger during prohibition, businesses are the means by which we develop and maintain our standard of living.

Well, that's the was it's SUPPOSED to work. The problem just might be man himself. You know, that guy you may refer acidly to as brother in law. He's the one for who lazy would be a compliment, mooch a quaint nickname, and welcher a person from Wales. He sells used cars. He once asked you for money for some hare-brained scheme, and after a lot of pressure - and to save face ( YOUR face viewed through your wife's eyes ) , you loaned him the money, but it became a losing proposition as soon as the first payment was overdue and you discovered the reason he wasn't returning your phone calls was because he'd run off to Las Vegas ( hooker in hand ) to invest your money on his new venture. And to make matters worse, your wife claims it was YOUR DECISION to loan him the money.

If you look toward Washington, you'll see that your brother in law moved there some years ago, and has graduated from used car salesman to bail bond collector to lawyer to deputy district attorney to district attorney to judge to supervisor to mayor to congressman to senator to vice president to..... and he's got his eye on whatever he can mooch off, and that means ANYTHING. Anything of value. So, even though there are SOME moochers running businesses who pollute or treat workers unfairly, the number of moochers in government would probably round off to be 100%. So it's easy for the moochers to ask for more. All the have to do is stir up the media about some pertinent issue to raise the public's awareness to attract funding. Talk about an art!

Anybody can see that the riches the rich enjoy is directly due to potential profits, and if you strip out some of the profits, who's gonna feel the pinch? You are, my friend. You have to work for a living, and you must buy food, transportation, etc.

Liberals treat a situation involving humans in a manner that demands a certain result, because that's how people SHOULD act. When in fact, you see that people do not follow the plan ( like welfare, for example ) . You fail to see that what we are doing DOES NOT WORK, so we throw money at it. Money we stole from those rich bastards, who probably ripped somebody off to get it, right? And, since a common definition of insanity is doing the same thing over and over and expecting the same results, by that definition all liberals may possibly be insane.

So the lesson here is that the goods you seem to want to distribute amongst those less fortunate would not even exist without the freedom of those creative business people involved in creating a better product at a better price to go about their business unhindered by financial or coercive mafia ( legal governments ) interfering. Remember it is you who then pay more for goods of inferior quality, it is you who must accept less wages.

To the unaware, the arrangement of production and consumers seems confusing. Unbelievably, the government attempts to take credit for it's mere existance! As if a food or durable goods market and buyers in the absence of a government would not exist! Right.

So don't be so quick to reach out for someone else's goods. You might find if you get your brother in law to pass a law to collect a portion of those goods, they'll soon be priced higher, and of poorer quality.

So before you ask me to subsidize that which does not work, don't listen to brother in law[s excuses for more money, take a hard look at what might be happening, of you'll end up living in a deteriorating country that's no fun because God has left for greener pastures.

Date: Fri Jun 13 1997 05:38
Maxt Different Results>(Different Results):
Correction to post: Definition of insanity; I meant expecting DIFFERENT results, ( not the same results ) .

Date: Fri Jun 13 1997 06:21
bw At risk:>(At risk:):
I'll finish out my financial assets series with the rough dollar amount at risk for each class. What better day to do it than when the dow soars yet again. At risk in a financial panic and depression are: stocks 11T, us treasuries 6T, M3 5T, MMMF 1T, Corporate Bonds 3T. The total at risk, about 26 trillion dollars is an amount about about equal to 75 years of personal saving. About three generations of personal savings for the whole country gone into a black hole. All the riots, blame, recrimination, commissions, reforms, new laws, new political parties, and new governments that perhaps will come will be powerless to bring back a single penny.

We are not considering as lost the implied future obligations of government such as social security. These probably total about 10 trillion. Also we are not considering the price reductions of real assets as this should not result in net real losses for society. Although there will be vast losses for individuals who are leveraged ( mortgages ect. ) .

Actually this 26 trillion dollars represents resources which have been long ago consumed. What will vanish into the black hole is hope. Hope that they will ever be repaid in real terms. The largest con game in the history of the world will stand naked before the billions of its victims. No one alive then will ever again trust paper promises, or the men, institutions and governments that make them.

TOTAL 22,000,000,000,000.00

Date: Fri Jun 13 1997 07:18
George S. Cole CB Gold Sales>(CB Gold Sales):

Thanks for telling us about that Federal Reserve study advocating that the CBs sell all their gold! This is the kind of thing that comes out at or close to secular troughs. Reinforces my conviction that the gold bear will reverse before long. The ensuing bull will have a tremendous wall of worry to climb.

Still think the catalyst for this reversal will be the final end of the ongoing bull market in financial assets -- probably this summer. And once the next gold bull begins, all the CB selling in the world will not be able to stop it.

Date: Fri Jun 13 1997 07:30
Tortfeasor Joke of the morning>(Joke of the morning):
The Netcom news service quoting someone saying that because the gold and silver markets have not responded to the recent dollar decline that they will soon pay. I presume that the writer anticipates sharply lower prices. Maybe this news is not news to this group. My feeling is that we will have more of the same today with gold in the 342 area and silver 4.74 or so. As I've said before I don't look for gold to go below 340 for any period of time. So, in the markets there isn't much to write home about. That is why I write here instead. Now for the story that amused me.

The old Jewish man was walking on the beach with his only
grandson, when a giant wave crashes onshore, sweeping the boy
out to sea. The man looks up to the heavens and says, Oh
Lord, this is my only grandson, how can you take him away
from me like this? My son will not understand. My daughter-
in-law will die from grief.

Another wave comes by, and deposits the boy at the old
man's feet. The grandfather looks to the heavens again and
says, He had a hat!

Date: Fri Jun 13 1997 07:42
Speed @home>(@home):
George S. Cole: What are the indications of a top? Are you looking for a steadily declining ratio of gainers to losers, several weeks of bad news? I'm interested, because I got faked out pretty badly in April, when the correction stopped abruptly at 9.9%.

Date: Fri Jun 13 1997 07:44
WW @New England>(@New England):
Is all this negativism on Gold in the published media ie ACW contrived or just symptomatic of what is said when a market is so pathetic. If it is contrived I believe they made a grave error. If as, ACW report states, the Govts sold all their gold today it would drive the price to 309 that is not much risk for such an event. Once it was done who would be left to sell.
Down to 309 is nothing/if thats all the govs can do in extremis then someone should realize gold is a bargain at these prices.

Date: Fri Jun 13 1997 07:58
Good Morning Tortfeasor -- How much bleaker can it get for the metals? The stock market looks to be in a blow-off mode here. Looks like panic buying with no one selling. I still have the same question, Sell? To whoooooom? Techs looked weak, blue chips strong. Looks like money sloshing around the bucket, from one side to the other. Short term, that's not good for the metals, but then again, the thirty year bond chart is filling in the triangle nicely! I never would've believed the pattern would be 'filled' out. I thought the economic news was too strong, but here we are, bond market rally... Go figure! I expected oil to fall, and it did, but the oil stocks and XOI are up! Again, go figure. I was planning a short of the XOI, paper it traded first ( ! ) . Idea has been nixed for the time being. Just sitting and watching now. HUI options, well, I've begun digging new plots in the cemetary. Business has been too good there lately. I've got plenty of space left, my rates are cheap! Need to bury anything ( paper I mean ) ? :- ) ) :- ) )

Date: Fri Jun 13 1997 08:02
Crystal Ball I'm from the government and I'm here to help you>(I'm from the government and I'm here to help you):
My prediction for PPI numbers:
From the honest folks in Wash DC, who wouldn't mind paying lower interest rates on the national debt, --- DOWN 0.5%. Gold's reaction--- ( listen to .wav file )

Date: Fri Jun 13 1997 08:02
Crystal Ball I'm from the government and I'm here to help you>(I'm from the government and I'm here to help you):
My prediction for PPI numbers:
From the honest folks in Wash DC, who wouldn't mind paying lower interest rates on the national debt, --- DOWN 0.5%. Gold's reaction--- ( listen to .wav file )

Date: Fri Jun 13 1997 08:04
Crystal Ball I'm from the government and I'm here to help you>(I'm from the government and I'm here to help you):
My prediction for PPI numbers:
From the honest folks in Wash DC, who wouldn't mind paying lower interest rates on the national debt, --- DOWN 0.5%. Gold's reaction--- ( listen to .wav file )

Date: Fri Jun 13 1997 08:11
Crystal Ball Funny Farm>(Funny Farm):
Sorry about the triple post. I've got a twitchy touch pad this morning.

Date: Fri Jun 13 1997 08:12
WW @New England>(@New England):
Panda: The economy is weak and any strength is the result of an unsustainable credit expansion. When the economy breaks down it will mean higher and uncontrollable deficits and therefore higher rates and a lower dollar and a problem for stks. A first for the US a virtuous cycle of rising rates combined with depression. Solution new currency backed with gold with gold at a price of 5k per troy oz. They mine gold like crazy and prosperity returns. We will buy the Dow index when it reaches its final low of 1300.

Date: Fri Jun 13 1997 08:20
panda @>(@):
WW -- You will truly be able to buy the Dow 'index' as licenses for options and futures on the index have been granted! I guess even Dow Jones needs the money.... :- ) )

FWIW I came across a story this morning on Japanese bankruptcies soaring..... Don't Worry, :- ) Be happy !- ) )

Date: Fri Jun 13 1997 08:28
panda @curious>(@curious):
Ford? China? Catalytic converters made of 'rare' materials that that China is 'rich' in?

Date: Fri Jun 13 1997 08:35
Producer price index:down .3% and core rate down .3% ..Much weaker than expected...Bond up 13 ticks..

Date: Fri Jun 13 1997 08:36
Crystal Ball Happy @Utopia>(Happy @Utopia):
Apropos all the recent social commentary on this site, from an actual newspaper contest where young entrants were asked to imitate Deep Thoughts by Jack Handey. - - -
Once, I wept for I had no shoes. Then I came upon a man who had no feet. So I took his shoes. I mean, it's not like he really needed them, right? --Age 15

I'd say this kid has a future working for the government.

Date: Fri Jun 13 1997 09:05
crash @maybe>(@maybe):
Hello All:

I've been enjoying all the comments on Kitco's chat group. I have
2 observations.
1. I've been hearing about a crash for the last 5 years. While I
don't disagree with this line of thinking, this could possibly go on
( no crash ) for quite awhile ( the Roman Empire took many centuries to
2. If one does feel a crash is near, what should one do besides
buying gold/silver coins? I've perused some of the Survivalist web
sites and most seem to recommend guns and dried foods. They seem to think that gold won't be of use until after the crash subsides and in
the short run, the former would be better than the latter.
Any comments/suggestions would be appreciated.

Date: Fri Jun 13 1997 09:12
CRASH: I've heard that for almost the entire 13 year bull market and it's mostly sour grapes by those who missed out on makin some money...In the past I've lived without electricity for 7 years and try and be as independant of the system as possible by providing my own heat source..
growin most of my food nuggets don't taste good! Self sufficentcy is the ANSWER and not some pretty prose!

Date: Fri Jun 13 1997 09:13
junior XAU >(XAU ):
Fibo: Absolutely right on your XAU call. We are going up. What will not go down has to go up. Yesterday proved that . It is funny that this site is very negative on the metals and gold shares. The charts on the stocks show that the worst is over. This is an opportunity to buy them real cheap. I follow the Toronto Gold Index which sits in the neighbourhood of 9300. The high was at 13000. We will go above that high to finish this up cycle, that is an increase of 40 %. I like that number.

Date: Fri Jun 13 1997 09:15
panda @?>(@?):

Date: Fri Jun 13 1997 09:18
Puetz @ Eldorado>(@ Eldorado):
Eldorado: A Ponzi Scheme requires confidence. Once confidence is broken, Western finances will completely fall apart -- because they are so grossly over-extended. A stock crash and an economic contraction are the events likely to break confidence.

Date: Fri Jun 13 1997 09:20
Puetz @>(@):
John Disney: Well said at 00:31

Date: Fri Jun 13 1997 09:21
TED @panda>(@panda):
Panda: I'm still tryin to take all that in....S+P futures up 2.25..

Date: Fri Jun 13 1997 09:23
Puetz @ weak economy>(@ weak economy):
WW: You hit the nail on the head -- your 8:12 posting. One day soon, investors will interpret declining retail sales for what they indicate -- contraction and economic decline.

Date: Fri Jun 13 1997 09:23
Chicken Little @puetz>(@puetz):
The sky is falling! The sky is falling!

Date: Fri Jun 13 1997 09:30
NJ gold sales>(gold sales):
ACW : I for one am in favor of CBs selling all of their gold reserves. The price of gold may fall to $309, but from then on the gold market would finally be freed from the uncertainities periodically and purposefully introduced by the CBs.

Date: Fri Jun 13 1997 09:57
Monetary Realist Save Gold and Silver Coins for Retirement>(Save Gold and Silver Coins for Retirement):
To the Baby Boomers who think that they will collect Soc. Sec./Medicare in the next century - I have news for you. It ain't going to happen! Being at the trail end of the BB generation, I know I won't see a dime of it, and have planned accordingly. My personal IRA is in the physical metals, all bought with after-tax monies and are off-the-books so don't bother to try to find it, tax it, confiscate it or otherwise reapportion it. By the turn of the century, there WILL be a tax revolt, the kind of which amerika has not seen for centuries. I refuse to pay for your largess and stupidity and lack of saving for retirement. The 13ers generation ( Gen X'ers ) talk among themselves about how their taxes keep on increasing, and the few benifits that they are receiving are declining daily. Being on the cusp of the two generations, I tend to agree with the 13ers.

You boomers are all alike - Do as I say, not as I did won't fly for to much longer. The tax rates that you have paid are less than half of what we are paying. Do you really think that this will continue forever? Don't bet your Blue Chip Stocks on it!

The 13ers know what is in store for the future of the economy, and are quietly saving for the inevitable meltdown. Alot of this savings can not be measured...

Do you really think that you are going to sell that house for a 300% markup? To whom may I ask? Everything that your generation has gotten into, turns to bust when you are done with it. Talk about herd mentality! Hey, check out that new investment opportunity over there, yea, by the cliff. You all have piled into stocks over the last 5 years and bid up the prices to unsustainable levels. In order to pull out your profits, just who are you going to sell that paper to? When the herd decides to get out, and try to, that inverted pyramid will come crashing down upon you all. Only the early sellers will come out unscathed, meaning 90% will eat it big time.

You lack any real morals, and believe that you will be able to stick it to the next generation when it comes time to pay all of your hospital bills. There simply are not enough younger workers for that to happen. People quote numbers of 60 to 80% taxes for the 13ers in the next century, for that will be what is needed to insure that you get whats due you. Good luck in collecting it! No, the only way that the Jack-Booted thugs can continue those ponzi ploys is by passing new taxes on all that IRA and 401K money out there. First a one time 15% tax, then the next year another tax and on and on it will go...

I agree with Steve Puetz that the only tried and tested way of preserving ones wealth is via the precious metals. Cash is good for the short run, but will become worthless by 2005.

RJ may have it right when it comes to investing, at least during the past 2 decades. That may change soon...

To those that have physical metals, don't sell all of it when the next bull comes along. You'll probably be selling at the first of several uplegs, and will have to try to convince your offspring later on why they should take you in and care for you and support you 'cause you sold out to early and are now broke. Well, don't expect it, after all, you ignored us while we were growing up, when we needed a parent for support or just a pat on the back. The majority of moms and dads work full time for that elusive dollar. For that opportunity to get into that next great investment mania and strike it rich. Yea, right, you AND everyone else...

As to the $5 and $10 moves in gold, it's good for short term trading of the gold stocks and fun in trying to time the markets. But these up and down moves mean little in the long run as to the value of the holdings of the physicals. The physicals are the only true long term investment that there is. And this will never change.

Ok, hit me with your best stuff, try to convince me that you WILL be collecting all that money that is due you.

Date: Fri Jun 13 1997 10:03
Long term lease rates? 'Tight' cash markets?

Date: Fri Jun 13 1997 10:25
panda @>(@):
Long Bond at 6.717, wow.... 6.6% ? Dow up !% even the HUI is up!

Date: Fri Jun 13 1997 10:37
Eldorado @the scene>(@the scene):
Monetary Realist -- You said a mouthful! I agree with all of it except one thing. If/when currency really does become worthless, or very nearly so, it certainly won't do one anygood in parting with their metals for it. Not unless there is a virtual guarantee that one can by it all back, plus a lot more, at a lower price! IMHO.

Date: Fri Jun 13 1997 10:39
Dashing & Flamboyant CNBC Financial Celebrity shares an encyclopedia of market insights on stocks, oil and T-bonds in Inger Letter Forecast - Click RELOAD at Gold Digest:

Date: Fri Jun 13 1997 10:50
panda @>(@):
Somewhat interesting interview and Q+A. Market crash? What would cause it? Read the last Q&A for his thoughts on gold.

Date: Fri Jun 13 1997 10:52
bw: Once again, your view is not only compelling but chilling. No matter how this thing shakes out. Our lives will not be the same again. IMO.

Date: Fri Jun 13 1997 10:54
George S. Cole bull market legs>(bull market legs):

My expectation of a market top this summer is based upon the observation that each leg of this bull market has lasted about half as long as the previous leg. And bull markets generally have just 3 legs. Leg #1: November 1985-May 1986 ( about 18 months ) . Leg #2: July 1996-March 1997 ( about 9 months ) .

The current leg began in mid-April and would be expected to last about 4.5 months. But the DOW rally has been so powerful that something between 3 and 4 months seems the best bet.

Date: Fri Jun 13 1997 10:57
George Cole: Gold appears unconcerned about what should be negative news this morning. Both ACW's overnite report and the inflation numbers. Does that constitute the placement of an 'X' in the positive column?

Date: Fri Jun 13 1997 11:02
WW: How did you arrive at a figure of $309 for a low, should the CB's disgorge their horde? Somehow, it seems to me, to be one of those imponderables. .... Not that it is likely in the first place. The central banks may be collosally foolish but I don't think they are monumentally stupid.

Date: Fri Jun 13 1997 11:03
panda @>(@):
George S. Cole -- Fifteen days of .7% average gains would put us at Dow ~8550.

Earl -- Take a peek at the DBC URL below.

Date: Fri Jun 13 1997 11:06
Glenn: How could you be so wrong with that April call on the DOW? Very likely, you will be off by 1000 before the end of June. ...... ( :- ) )

Date: Fri Jun 13 1997 11:08
George S. Cole gold and news>(gold and news):
Earl: As you know I place great emphasis on market reaction to news. Gold's ability to hold this morning in the face of proposals for huge CB sales is enxouraging. But the yellow stuff will have to continue to ignore bad news for awhile in order to declare the bear dead. Also we want to see it go up on good news and STAY UP. This hasn't happenned in quite some time.

Lots of new era talk on Wall Street now. The latest investment paradigm asserts that the link between inflation and economic growth has been permanently severed. We can have strong growth forever with very little inflation; hence no need for the Fed to tighten in the foreseeable future. And recessions won't happen if the Fed doesn't have to turn the screws. Of course this is all bunk; but the financial community needs a rational for the ongoing market excesses. Reminds me of Irving Fisher's new era of permanent prosperity talk in the 1920s.

Date: Fri Jun 13 1997 11:19
ark saltedcore>(saltedcore):
TEd:The option of selfsufficiency is only open to a very
select few; those in good health and a spot of land, etc.
Civilation, as we know it, can not revert to tribal form,
vis-a-vie, the American indian. I think you get my drift
without further description. We all like our comforts and
have grown weak as a result. It is tough to follow
the rules that
result in a healthy life style, as well you know. Cheers:-}}

ALL: If the dollar is getting weaker and can buy less gold
for each $, why doesn't the price of gold increase? Also,
if the CB don't think gold is worth anything why don't they
set it out in a field someplace in Brooklyn or Kentucky and
guard it with a fence? There is a lot of bull being spread
around. Next thing we'll hear from MIT is that balls don't
bounce. Geezzz.

Date: Fri Jun 13 1997 11:31

You write nice.

My musings last night, with as you put it so well, 'gold bug solidarity' were not a call to arms. I am very pleased with the level of rational and most importantly civil discourse which now is a mainstay here at Kitco. Remembering back to the more combative days, I do not relish a return to the past. My observation was purely what one might call one those semi-useful anecdotal type indicators.

IMHO the best observation that WW has offered to date is 'news follows price'. We have seen a beautiful example of this in the PGM markets as now everyone 'knows' why the price is high. And there are no shortage of commentators willing to explain. With respect to gold, I realize that Kitco and its participants and lurkers are but a tiny blip in the market, however they do represent a group that by all rights should have an enormous positive bias towards the glittery stuff. There is strong reason to believe that they are at least a little representative of those who would normally be gold buyers and holders. That this group should be willing to embrace the 'reason' ( the news ) for why gold has gone down and appears dead in the water at best, is telling. People do not embrace an alternative explanation when it runs directly counter to an investment stance that they have taken. We all talk our book. To me this is clear evidence that the Kitco book is not nearly as long as it used to be. When the last of bulls has been converted, the selling is over. This does not mean that the price will now take off like a rocket, but it does mean that there is very, very little risk left on the downside. The primary objective for investing is to get the reward / risk ratio as high as possible. The easiest way to do it is to get the denominator to approach zero. We are asymptotically approaching.

Date: Fri Jun 13 1997 11:34
George Cole: Agreed. In the meantime the financial world is providing us a show, worth far more than the price of admission. The denouement is so fascinating to watch I have decided to unmute CNBC. Hell, I may even get some popcorn. .. ( :- ) )

Date: Fri Jun 13 1997 11:51
D.A.: Thanks. I'm sure you realize that my comments were intended to aid the course of open dialogue, with a minimum of rancor. ...... BTW. Your comments included use of a word seldom seen outside of a calculus text. Asymptote. ..... ( a curve that approaches a straight line but never touches it ) . Now it's available for general use.

Date: Fri Jun 13 1997 11:52
Tortfeasor Bonus Joke>(Bonus Joke):
Panda, if I were in emergency care I would not want to see this gold chart on my heart monitor. All of you forebearing and foreboding goldbugs need a little levity to get you through the doldrums of this day. Hi, Ted, forgot to wish you good morning but this will have to do.
Here's the additional story.

Two nuns are traveling through Europe in their car. They get to
Transylvania and are stopped at a traffic light. Suddenly, a diminutive
Dracula jumps onto the hood of the car and hisses through the windshield.

Quick, quick!! shouts the first nun, What shall I do?

Turn the windshield wipers on, that will get rid of the abomination,
says the second.

She switches them on, knocking Dracula about, but he clings on and hisses
again at the nuns.

What shall I do now? shouts the first nun.

Switch on the windshield washer. I filled it up with Holy Water in the
Vatican, says the second.

Dracula steams as the water burns his skin, but he clings on and hisses
again at the nuns.

Now what? shouts the first nun.

Show him your cross, says the second.

So she winds the window down and shouts: GET OFF MY F--ING HOOD!!

Date: Fri Jun 13 1997 11:54
panda @?>(@?):
SWC and GGO get 'buy' recommendations... Geeeez, as the worm turns! When was the last time that you heard of a buy recommendation on a gold stock!

Date: Fri Jun 13 1997 12:01
vronsky lest we forget...>(lest we forget...):
ďThere may be a recession in stock prices, but not anything in the nature of a crash.Ē
- Irving Fisher, leading U.S. economist in 1929

Date: Fri Jun 13 1997 12:11
Ted: In many ways I admire your drive for self sufficiency. I hope to hell it proves unnecessary in the end but it's a bet I'm unwilling to make. I have considered the same course myself on many occasions over the years but priorities and resources never crossed. Who knows, the future may make the decision for us. I hope not, for I still enjoy the luxury of a hot shower in the morning and a sauna is a prodigious consumer of hand cut firewood.

Having had the mixed fortune to grow up on my grandfathers homestead in norhern MN, I can relate to an era without electricity and the amenities that implies. I'm sure there are many others here, who have been similarly discommoded ( pun intended ) at some time in their lives. In our more illucid moments we may even look back on those days with a certain fondness. ......... Until we recall an outhouse at 40 below. .... or 90 above for that matter.

Date: Fri Jun 13 1997 12:17
Panda, SWC recommended by whom? I missed that one, but just bought a bunch more this morning, so if the price drops this afternoon you guys will know why : )

Date: Fri Jun 13 1997 12:21
Ron in Sack-o-tomatoes>(in Sack-o-tomatoes):
Re ACWs ominous report @1:04, the original full-text version of the paper is available at Just look for the last item under Working Papers. You'll need a PostScript viewer ( Ghostscript works nicely, and is free. See ) .


This paper assesses both qualitatively and quantitatively the aggregate welfare gain and distributive consequences of selling or lending out the massive stocks of aboveground gold currently held by governments and international institutions. A model of the gold market is constructed which, unlike the standard model of extraction of a service-gneerating durable, allows for uses that reduce the stock ( depletion ) instead of mere depreciation. Additional gold can be made available to private agents either by extracting it from mines at a relatively high cost or by taking it from government stocks at zero cost. To maximize aggregate surplus, all zero-cost gold should be used before any high-cost ore is extracted; moreover, all gold available at zero cost should be furnished to the public immediately. We consider two policies, each of which induces the optimal allocation as a competitive equilibrium. These two policies belong to a class of policies which induce optimal allocation. Current policy, however, is not a member of this class. Hence welfare gains are possible if current policy is changed. Using a calibrated model, we estimate these gains to be $136 billion in aggregate, $90 billion of which would accrue to governments and the balance to the private sector.

Date: Fri Jun 13 1997 12:23
Looks like a varry good day to be pickin up BARGAINS on gold stocks.

What is the best way to short the market? S&P puts Which one

Tally HO

Date: Fri Jun 13 1997 12:43

It is not surprising to see a report such as this appear. No doubt politicians worldwide salivate at thought of a freebie of this magnitude. You can be sure that the method of disposal which would be of the greatest benefit to the general welfare will never be discussed. Simply divvying up the bullion and giving every citizen the piece that is their's.

Date: Fri Jun 13 1997 12:46
Patti @selfsufficient>(@selfsufficient):
Crash - An ex-stock broker friend called the other day. The market terrifies him. He remembers the '87 crash and watching the Dow drop from about 1900 to about 1200. It felt like death. He thinks things look so much worse now. He said he'd rather see the crash now, than see the Dow go to 10,000, which will be much worse. He thinks that even banks could close and people be begging for money. Paper would still be good at that point, and he believes that everyone should hide about $5000 in cash to have on hand just in case. Forget about the interest you lose on it ( I told him that was easy, since I'd already lost so much on my gold stocks ) , but at least you'd have some money when you needed it. He does believe that gold will go up once the initial crash is over.

Ark and Ted - I agree with you Ted. Self-sufficiency should be everyone's goal. Ark, for people that can't grow a garden or do some chainsawin, they can still be self sufficient. Even in an apartment you can store some dehydrated or freeze dried food under the bed, grow herbs on a windowsill in pots, put a fancy cloth over a big bucket of wheat and use it for a bedside table.

Once on a visit to Gettysburg I found lovely old coal oil lanterns that mounted on a wall. I also store candles. We have an airtight stove, which I realize wouldn't be possible in an apartment, but I believe that you can buy propane type heaters that could be used in an emergency if the power was off, or if you're in a house, a propane fireplace can offer some security for power outages. People are only unprepared because they're apathetic and don't believe anything can happen. If you want to prepare for emergencies, there are ways, even in the middle of the city in an apartment.

Crash, I'm not a survivalist, but a lot of their tips are good. If you want to eat during difficult times, store food. If you want to protect that food for your family, weapons help. I have a bit of gold bullion just in case and some junk silver. Be independent!

We bought canned dehydrated foods when our children were at home. We just wanted to be able to feed them if times became tough. When they married and left, we gave a lot of the stuff to them to take with them. We still have a certain amount of it left. Think what you'd want if you couldn't get out to a store and had no electrical power - then prepare. It's better to be safe than sorry. I'm glad I never had to use the things I collected, but it gave me a lot of security when we were raising a family. It prevents a lot of worry and stress.

When two of our children were pre-schoolers we moved from the city to the country. My first winter there was an education. We had unwittingly moved to a snow-belt within a snowbelt. My husband got storm-stayed at work ( 25 miles away ) for one full week. A blizzard raged, it was -15 F. and the winds were 75 miles per hour. Freddy the fish froze in the goldfish bowl. Although I'd dumped antifreeze down the drains, still some pipes froze. I dressed the kids in snowsuits and we danced and wiggled our fingers and toes and sang to keep warm. After two days with no heat we were snomobiled out to a neighbours' who had rigged up an old wood stove in the kitchen. Prior to that, I had tried to heat soup with a candle. It doesn't work well. All you want is something hot to warm your insides. We had lots of canned salmon, tuna, ham, etc., but no way of heating anything. A hot meal is very soothing when you're freezing. We made lots of sandwiches for hydro workers that came by snomobile after three days. Drifts were 12 to 24 feet high on some of the roads. It took days to open them. Huge plows came in from Toronto, since we had no big snow blowers in those days. After 27 years here, I'm used to snow up to the garage roof, and I'm also prepared. One week can make a big difference in a person's life.

You may not be able to afford everything at once, but even a little each pay check helps. And from my experiences in the stock market, I think you'd better get the practical things first ( we've got our chainsaw, Ted ) . After the market you might not have much cash left with which to buy anything.

Date: Fri Jun 13 1997 12:51
Eldorado @the scene>(@the scene):
Ron -- I, for one, would welcome the gold sales. All that gold should be in the peoples hands anyway! That's where most of it once was, and that is where it never should have left. That being the case, the possibilty of the government 'working' on the behalf of 'the people' are either slim or none. In other words, don't count on it happening!

Date: Fri Jun 13 1997 12:53
George Cole: It appears that the 'monetaries' can also be added to your positive column today. The DM looks to be resuming its former downtrend and all the others are down with the exception of the BP. Bonds are up, the dollar index is up, God is in his heaven and all is right with the world. ..... And yet gold is stable and the XAU is mildly positive. It's so easy to read more into these things than they deserve. Even on a one day basis but do you have a sense that there may be a decoupling of the currencies and gold? Recently, it just doesn't seem to react to them in any fashion. Maybe it's just one more indication that gold is indeed dead. Never to rise again, RIP.

Date: Fri Jun 13 1997 13:05
Eldorado @the market>(@the market):
Earl -- Wouldn't it be something if gold went to 50 bucks before the government actually decided to sell it all? And those purchases by the people made with inflated dollars to boot! What a hoot! Let's see now, the One World crowd putting independence 'stuff' back in peoples hands for almost free. Wouldn't happen!

Date: Fri Jun 13 1997 13:05
D.A.: Speaking of asymptotes, the DOW action for the last 7 sessions is doing a great job of describing one. New eras are so pleasant to comtemplate. Especially, when those of the past were so bitter in the end. But this one will be different. It must be. I'm sure it will be. ..... I really need it to be. ...and so it goes.

Date: Fri Jun 13 1997 13:05
Bob A pgms>(pgms):
SWC was recently recommended by J. Dines and Dizard of Nat. Review. I sold some at 24and 3/8 and will re-buy soon, I hope. I understand they are having a management shake up.

Date: Fri Jun 13 1997 13:06
DA: The CB's passing out the gold to the citizens: What a great idea! And you are right - far too simple and far too good for the citizens for our trusted civil servants to speak of it. This would be worth writing to congress about at the right time. I bet a lot of those contributing and lurking here would participate.

Date: Fri Jun 13 1997 13:09
Bob A: As a former subscriber of the inestimable Herr Dines, I would feel more comfortable should he recommend a short on SWC. He is often wrong ... but always positive.

Date: Fri Jun 13 1997 13:14
Ron Not Selling>(Not Selling):
D.A, Eldo: I'd love to see gold out of govt coffers, too, and in the hands of individual hoarders -- as long as there are lots and lots of them. But if this idea goes anywhere, and given the CBs dismissive attitude toward AU as money, it might, it'll be bad news for holders of both aboveground and belowground stocks, as the paper makes clear.

As the paper also makes clear, if such sales and loans do take place -- and the authors argue that the sooner it happens the greater the govt's profit -- the news should come out of the blue also to maximize the govt's take.

But there's bound to be lots of resistance to such a move by governments that have been stung in the past by insufficient gold stocks. So I think the chances are pretty slim.

Date: Fri Jun 13 1997 13:19
panda @recommended>(@recommended):


Date: Fri Jun 13 1997 13:19
TED and PATTIE.........Let me preface this comment by saying I am not a survivalist and I hope and pray the country never gets to the point of starving mobs, etc.....However, I own a farm so far out in the sticks even I have to have a map to get there....It has running water and a 16 inch seam of coal....I have a small mobile home at a nearby resort and a truck to pull it. 2 chain saws and plenty of tools for gardening ( That reminds me...I have to go work in garden now ) ....I live in town about 75 miles from the farm and there are no cities near the farm....The farm is rented out and has paid for its self X 3 in the 15 years I have owned it...I use the trailer at the resort for fun and camping. There is a small boat for fishing and river transportation. I purchased these things I wanted anyway, with the thought far in the back of my mind that they could be an insurance policy if the ultimate economic disaster struck.... An insurance policy I could use and enjoy now....And yes Ted, I know how to garden, fish and hunt.

Date: Fri Jun 13 1997 13:22
Bob M>(
Where is all this money coming from to drive the Dow the way it has? People dont seem to be curbing their spending that much, maybe from savings? Does anyone have a take on this?

Date: Fri Jun 13 1997 13:26
Eldo: You may be sure that such distribution would be made, only, to the impoverished so that the anointed might then have the opportunity to manage it for them. ... sans pro bono. Of course. ..... Speaking of which. It's a never ending source of amusement to observe the actions of many of the Native American groups, in recent years. They continue to screw Uncle Sugar, frustrate the anointed, separate the 'red necks' from their dinaro and generally prosper in spite of the best efforts of the anointed and the socially responsible.

They have educated many of their own people who now use the law of the anointed to serve the ends of their own people. While the state and fed govts howl and squeal...... A guy has to have a defective sense of humor to not enjoy the proceedings..... Whether the people are using the proceeds wisely is another matter. But that is their business.

Date: Fri Jun 13 1997 13:31
GFD It's the end, my friends>(It's the end, my friends):
Gold action today in the face of the mother of all bad news - a federal reserve study recommending selling off all gold reserves - will likely be seen as the definitive signal that the bottom is in. While I completely respect George S. Cole's view that confirming market data is required I suspect that the bull market in gold not be hesitant and stumbling but rather abrubt and violent like palladium.

And zinc ( as I recall ) . DA your post a few days ago summing up the inventory liquidation in zinc which occurred in the face of a declining market will likely be seen as the definitive explanation for what has been happening in gold over the last few years. When I say this I am viewing metal leases and even forward gold sales as all a form of inventory liquidation. Who needs declining - non productive - assets on the books

Earl, think you have said it very well in your 00:04 comments about the DOW: It's bubble time and there is not a thing to be done to change it.. In Kiplinger's classic book on manias and panics he has a great story about the south sea bubble even dragging sophisticated investors in because it was so strong and long lasting that they essentially had no choice if they wanted competetive returns.

This is the story of the last legs of this market. More and more money flowing into the SPX or Dow stocks from less competetive ( but diversified ) mutual funds. There is no way that one can predict when a parabolic will top out. I think that you can predict WHEN it will but given the power still in evidence I suspect this will go higher and last longer than anyone here will be able to stand. I still think it is possible that the Dow could hit 10,00 by the fall - although my knees tremble at the thought.

One thing that stands out about this the current investment millieu are the incredible risks that are starting to emerge, particularly in things like option writing. Call writers on SPX are going to be murdered on the way up and Put writers on the way down. Call writers in gold and silver stand to be decimated.

What this will do to the larger derivatives market is not knowable but frightening nontheless. Derivatives are constructed based on historical risk factors and the types of market action we are and will be witnessing will exceed historical standards by a significant margin. I am surprised that we have not seen more problems in derivatives than we have to date.

Date: Fri Jun 13 1997 13:33
Patti: How is it you were able to find such an 'old guy' for a broker?.... ( :- ) )

Date: Fri Jun 13 1997 13:43
EWP@MonetaryRealist EWP@MonetaryRealist>(EWP@MonetaryRealist):
MonetaryRealist: Good 9:57a.m. post!

Date: Fri Jun 13 1997 13:56
Stokes whether@S.A.Rand >(whether@S.A.Rand ):
To Ray and John Disney:
What is your take on the South African Rand? Will it decline further against the US Dollar? If yes, by a lot? When do you believe it will turn stronger? The reason I ask is that I want to pick up some WDEPY and HGMCY. Thanks

Date: Fri Jun 13 1997 14:01
Am having a heck of a hard time with phone lines today....Need to mow yard and work in garden anyway..PATTI...sorry about mis-spelling you name

Date: Fri Jun 13 1997 14:02
bw Great joke:>(Great joke:):
Tort: Thanks mucho for the commodities broker joke. I have been unsuccessful at four attempts to tell it ( twice to brokers ) . I break up on the punch line. So I tell it to my self over and over, laughing each time, once so hard my stomach cramped up, is it possible to actually die laughing?

Date: Fri Jun 13 1997 14:06
Bob A to Earl and Panda>(to Earl and Panda):
Dizard of Nat. Review has my ear. He recommended a plat gold spread at least 3 months ago long before plat. started this recent move. He also spelled out SWC. John Dessauer,investment letter writer, in most recent issue added Placer Dome to his buy list, prior to this he did not like gold.

Date: Fri Jun 13 1997 14:20
panda @>(@):

Date: Fri Jun 13 1997 14:21
George S. Cole>(
GFD: In time gold will explode to the upside just like the whites. But I doubt the move will START this way. The whites did not explode from the bottom, but established solid technical uptrends before they took off.

Steve Puetz: The 1929 and 1987 crashes did not come out of the blue. They both were preceded by about 2 months of modest downward pressure before things got out of hand. If this pattern repeats, a crash ( if we do indeed get one ) is not likely until fall.

Date: Fri Jun 13 1997 14:24
Patti @old>(@old):
Earl, that old guy is much younger than I am, and is no longer a broker. I think he couldn't stand the stress - now he's an accountant - maybe he just makes more money in the latter occupation. He did regale me with stories about the '29 crash, but I think they were gleaned from his grandfather. ( you know - you could buy someone's car if you bought them a week's worth of groceries - that type of thing )

In my day it took at least a week to spend a week's wages. Nowadays for many young people the only way to balance the budget is the ad hoc approach. If they want to add something they have to hock something else. They have the highest standard of living in the world - they just can't afford it. I don't mind being oldish and hopefully wiser. It's nice to reach the stage where you can spend what you have left after saving, instead of saving what you have left after you spend. This way you can even invest in gold stocks and get your excitement from the market, instead of worrying about being too old for modern fashions ( like topless ones! :- ) )

Date: Fri Jun 13 1997 14:30
George s. Cole gold bear>(gold bear):
Gold stocks now down modestly after giving up early gains. August gold off 30 cents. This bear is going to end shortly, but may have a few more loud growls left.

Date: Fri Jun 13 1997 14:35
bw Shut down:>(Shut down:):
GFD: Concur with your ideas. I am ticked off about the way it is playing out because it may not be possible to use the financial system for leverage on even the first part of the coming metals bull market. I used to think I would load up on metal futures after the financial markets had topped out and sell into the rise for at least the first 20%-40% of the bull. I still plan on doing that. But the longer and more insane this stock mania gets the greater the possibility the financial markets will shut down before any profits can be sucked out of winning metal accounts. And when the financial markets shut down any account winnings may become an instant liability, given our lovely gov. Best to be flat then.

Date: Fri Jun 13 1997 14:41
Patti @home>(@home):
Nailz - spelling mistake forgiven - your set-up in the country sounds perfect!! My son and family just bought a country home up north. He hooked a trailer on the back of his ATV, threw in some bails of hay and took hubby and I on a tour through the 100 acres of bush, up and down sand dunes, etc. I felt like a teenager on a hay ride again. There were bear claw marks on the trees and lots of deer tracks. I told him I'm getting too old for change and when I come to visit I'll bring my chicken or roast beef, but he has a bear in the freezer now, and I'm sure we'll be treated to an original menu the next time we're up north, like it or not.

Date: Fri Jun 13 1997 14:49
Westboy @huffin and puffin>(@huffin and puffin):
Lambs being led to their eventual slaughter. Most of these lambs just don't realize this blowoff is the worst possible thing that could happen. It guarantees a violent reversal down the road, one in which it will be impossible for them to get out. And , the buy the dippies crowd will watch in horror after they buy more after the first dip expecting the dow to go to 10000 only to see another multi thousand point drop develop. I may have scoffed at those looking for dow 1000 a while back, but no longer. I fear the worst now.

Date: Fri Jun 13 1997 14:55
I have been an investor in the RYDEX URSA mutual fund which
basically shorts the S&P 500 futures and options contracts.
Needless to say, I am in the whole on this. Should I bail
out all together or average in more purchases as the Dow
continues to climb? At this point, I'm about ready to invest
in Meals-Ready-to-EAt ( MREs ) as a food storage item and resell
them for 2-3 times original cost when our financial and ulimate
consumer infrastructure falls apart. Even if it doesn't, I have
a tasty ( so I've been told ) food item that will last on my shelf
for years and may tide me over if I lose my job. Thoughts on any
of this?

Date: Fri Jun 13 1997 14:56
Cassandra @westboy>(@westboy):
Westboy: hahahahaha..who's getting led to slaughter...hahahaha

Date: Fri Jun 13 1997 15:01
GVC @fidelity amer gold top ten>(@fidelity amer gold top ten):

Top Ten Holdings

as of 04/30/97











Date: Fri Jun 13 1997 15:10
Byron @ Approaching 7800 on the Dow:>(@ Approaching 7800 on the Dow:):
If December was irrational exhuberance, what is 7800 Dow called

Date: Fri Jun 13 1997 15:12
Earl ( 12:11 ) I take after my father's side of the family ( thank God ) and they are from St.Paul...Spent much time in Ely MN...Funny you should mention hot showers and saunas as we had BOTH in Vermont and without electricity...The efficent wood-burning sauna took very little wood to get nice and hot...Hot showers came from a water jacket in the wood stove plus a solar collector on the roof...No outhouse either as we had a compost toilet made by a company founded by Abbey Rockefeller of all people...I have NEVER trusted the system and now find it ironic that I am defending the stock market...Ain't life strange!

Date: Fri Jun 13 1997 15:18
general to Byron>(to Byron):
7800 and higher will be called: national down-the-tubes-R-Us
when this house of cards comes crashing down. Keep your gold
and PGM positions and start building cash to buy the Blood on
the streets .

Date: Fri Jun 13 1997 15:22
TED @patti>(@patti):
Patti ( 12:46 ) Great post and enjoyed your winter story!...With all the gloom+doom talk about the economy-stock market you'd think more people would be preparing themselves by learning to be more self-sufficent and not being so DEPENDANT on a system they don't believe in...especially people on a Gold forum!

Date: Fri Jun 13 1997 15:27
MoreGold @Westboy>(@Westboy):
You are right, it's inevitable and it's comming, the only question is when. I am surprised that Greenspan isn't trying to slow this stock market mania down. What happened to the irrational exuberence worries he had when the dow was a couple of thousand points lower?
Is Greenspan now implying that the market is safe by his deafening silence?
Who will be buying the multi billions of stock sale orders when the market finally tops and everyone wants their cash and heads for the exit doors at the same time? Answer: No-one.
When the margin calls are triggered, how will they liquidate the client positions to settle the margin calls if they can't liquidate?
When it finally comes, this may not be a crash, it may be a meltdown.
Does the Fed have any contingency plans to cope with this?
Robert Prechter's call for a 600 or 700 dow may not be that impossible.
Scary, even for Goldbugs.....

Date: Fri Jun 13 1997 15:29
Redhead @TEDhead>(@TEDhead):
TED: do you have to flirt with ALL the female posters?

Date: Fri Jun 13 1997 15:35
TED @nailz>(@nailz):
Nailz ( 13:19 ) I second what Patti said about your set-up in the country as it sounds great!...Some local people are trying to reclaim their land at Scaterie Island from the goverment and that's where I'd like to set up shop!...There's a beautiful place there called Tin Cove that has a sandy beach and 100 feet behind that a fresh water pond with great tasting water...Tin Cove is also the only place you can land at the island during storms and high seas....I know from experience...

Date: Fri Jun 13 1997 15:35
TED @nailz>(@nailz):
Nailz ( 13:19 ) I second what Patti said about your set-up in the country as it sounds great!...Some local people are trying to reclaim their land at Scaterie Island from the goverment and that's where I'd like to set up shop!...There's a beautiful place there called Tin Cove that has a sandy beach and 100 feet behind that a fresh water pond with great tasting water...Tin Cove is also the only place you can land at the island during storms and high seas....I know from experience...

Date: Fri Jun 13 1997 15:38
George S. Cole Rydex Ursa>(Rydex Ursa):

I also was in Rydex Ursa back in April when the market started its latest surge. I sold these shares a few days after the market exploded for a loss of about 5% and got long in a hurry. When you are short NEVER NEVER let your losses run.

There is little doubt the market will turn south soon, but no one really knows how high it will go before that happens. My best guess is about Dow 8000, but Dow 8500 or even Dow 9000 cannot be ruled out.

Date: Fri Jun 13 1997 15:40
TED @tort>(@tort):
Hi Tort: Do you have a joke about DUMB Redheads...hahahaha...the world is full of FOOLS...

Date: Fri Jun 13 1997 15:46
TED @front>(@front):
Front: Yeah, I got Koss speakers.....must be the other thingy...I was a luddite until January when I bought the lead me through it..

Date: Fri Jun 13 1997 15:53
George S. Cole Fed Policy>(Fed Policy):
MOREGOLD: Greenie knows what's coming but does not want to be blamed for ending the biggest party in stock market history. All past bear markets have been preceded by substantial Fed tightening, but I suspect IT WILL BE DIFFERENT THIS TIME.

Next bear probably will begin without any more tightening. This could be the sleight of hand that keeps most in the market too long. After all if inflation is low, the Fed won't tighten, and if the Fed won't tighten than a bear market is impossible. Right?

I'm sure the Fed and Treasury have worked out elaborate scenarios on how to respond to a market meltdown. Little doubt they will be buying futures heavily if things get really bad in lower Manhattan. Will they be able to prevent a meltdown if one starts to develop? We shall see soon enough.

Date: Fri Jun 13 1997 16:04
Bob M>(
George S. Cole- the scary part is that this market may continue to rise for the next several years. Of course, there will be many bumps along the way, some very deep, but it is my contention that the only thing that will kill the stock market is a major, major turn in investor sentiment to get out of stocks and move to something better. I believe the baby boom bunch will be much tougher then people think to get out of this market. It will probably take a war or a major catastrophe to change the attitude. I cant believe in your writing that you call for $3000 gold? I have heard people speculate like that since 1980. It is very hard to imagine. Thanks George for your insights.

Date: Fri Jun 13 1997 16:05
GFD Apocolapse Later>(Apocolapse Later):
bw: I seriously doubt that the exchanges will close immediately in the aftermath of a stock market plunge. And frankly I don't expect an immediate impact on the economy either. Unlike 1929 when everyone bought stocks on 5% margins, the current market could collapse to zero without affecting ( immediately ) peoples day to day lives. What it would mean for most people is that they would have a less comfortable retirement some time in the future.

Face it. Most public money in the markets reflects savings in one form or another - and North America is not into savings in any case. All the crash could mean is that measly savings levels get worse. So?

Over time ( 12-18 ) months you would see economic contractions as people cut back on spending as they react to a serious reverse wealth effect. How things would play out after that is not clear to me.

I guess what I am saying is that many financial assets are so decoupled from reality that it does not matter how they are priced - high or low.

Date: Fri Jun 13 1997 16:06
George S. Cole Dow Peak?>(Dow Peak?):
One of the participants on the Golddigger thread who has been pretty good on calling the markets thinks the Dow peaked today at 7845 intraday. Even if he is correct, I suspect the Dow will hang around these rarified levels for a few weeks before breaking sharply. And small caps and mid caps could move up considerably further even if the Dow starts treading water.

Date: Fri Jun 13 1997 16:13
John Disney>(
For Stokes
Re the rand. You ask tough questions. In general,
I would expect the rand to weaken against the dollar
by the difference between their inflation rates. Ten
per cent versus 3 percent - making a likely fall of
7 per cent per year of the rand versus the dollar.
However, I believe that the latest fall was overdone
and has placed the rand near the top of a channel at
about 4.7-4.8 to the $. Since it seems to be testing
4.5 pretty hard now I think a rerun up to the top of
the channel is likely - beyond that I would not
worry too much. However bear in mind that I have been
wrong in the past using this methodology more often
than I like to recall. Im curious what Ray thinks.

Date: Fri Jun 13 1997 16:14
George s. Cole forecasts>(forecasts):
BOB M: I have not predicted $3000 gold, but that price would not surprise me. What I said was that if capital ever starts to run scared in this country as it was in the 1930s, gold would soar to at least $3000 an ounce. I stand by that statement.

While most baby boomers claim to be in for the long hall, very few have experienced a bear market. We shall see how many of them stick it out when the market drops 20-30% and doesn't quickly recover. I suspect many will dump everything near the bottom.

Date: Fri Jun 13 1997 16:16
GFD Base>(Base):
George S. Cole: I agree that the PGM's built a good technical base before lifting off. My scenario ( which, of course, could be completely out to lunch ) is that gold being the last of the precious metals will need less constructive action. More precisely, gold could start moving in a commodity panic driven by short covering and inventory accumulation which could be started if the Russians don't provide deliverance to the palladium markets ( and all those poor Japanese shorts ) .

BTW the book I was refering to in my earlier post is Manias, Panics and Crashes: A History of Financial Crises by Charles P. Kindleberger NOT Kiplinger as started earlier.

Date: Fri Jun 13 1997 16:19
GFD Base II>(Base II):
Whoops!! that gold being the last of the precious metals will need less constructive action. should be that gold being the last of the precious metals TO START MOVING will need less constructive action.

Date: Fri Jun 13 1997 16:23
bw Dow drive:>(Dow drive:):
Bob M: It looks to me we may have a sellers strike in the dow. If no one is willing to sell it takes little buying to force prices up a lot. The potential spec shorts have had their heads handed to them so frequently they are gun shy. The longs are looking for 10,000 at least to sell. The inflow into the mutual funds has been running at about 5 billion a week last couple of weeks. The funds are probably also running down their cash that should be more than enough to support this blow off given reluctant sellers. Watch the flow into the funds, should it pick up and the funds panic this blow off could get real interesting. If there is one thing the funds have learned over the last few years, its that the cash has to be put to work as soon as its received.

Date: Fri Jun 13 1997 16:24
George s. Cole gold shorts>(gold shorts):
GFD: You pays your money and you choose you scenario.

BTW, wonder how many of the gold shorts knew in advance about the Fed study advocating the CBs sell all their bullion. More than a few I suspect. Some of these shorts must be a mite nervous now that the news is out and bullion fell only 50 cents.

Date: Fri Jun 13 1997 16:48
bw Please stay open:>(Please stay open:):
GFD: Sure hope you are correct about the financial markets staying open until I can close out my metal longs. I can wire cash to physicals in a couple of minutes. My fear is that that may not be fast enough.

Date: Fri Jun 13 1997 16:55
Stokes and J. Disney- I do not know the direction of the Rand, probably down but at what rate is a big question. A fallin Rand is good for the SA gold shares and that is why I am out of them for now. I have a meeting scheduled for the week of July 1st with a top SA currency and stock analysts and I plan to pick his brain on that question.

Most of my shares made up a lot of the down yesterday. Tried to add to KRY and AZS but too fast for me.

Tally HO

Date: Fri Jun 13 1997 17:31
George Cole: Great observation on the report versus gold price. The shorts now have the weekend to consider it.

Date: Fri Jun 13 1997 17:32
Timothy McVeigh @electricchair>(@electricchair):
Don't flip that switch!

Date: Fri Jun 13 1997 17:37
Bob @ forget inflation or FED hikes, earnings will lead DOW up or down>(@ forget inflation or FED hikes, earnings will lead DOW up or down):
If Mr. Market is following a strong Efficient Market Hypothesis then the party ends when earnings show flat. The FED rate hike/inflation story is dead here in G7 territory - it has been exported to the LDC ( Lesser Developed Countries ) markets.

The current Bull theme is that LDC's markets are opening wide with special reference to China SE Asia. Consumer demand form this area is feuling profits of the American Dream corporataions. The DOW comprises the classic American economic engine ( even without MSFT + INTC ) and responds according to the boom scenario.

When does the music stop and the folks runs for the chairs ?

The best guess is probably the next round of earnings reports that should reflect the recent news on lower US retail sales. This should be the beginning of the end of a chain of recessionary indicators that will do what the FED can't do in the absence of domestic inflation - however figured / spun.

So GS Cole's forecast for summer DOW follies make sense if the earnings picture turns sour.

What happens to gold ?

We can ruminate on the prospects for gold in context of recent white metal action but the writing on the wall suggests that gold will be still in a funk until CB's stop selling at a magic price and gold miners reduce selling forward at these prices. It will take a fundamental change in demand/supply of physical gold to turn this mother bear around.

I don't think we will see a financial crisis sufficient to unlodge the US$ from the mantle of currency of last resort.

In this regard we only need to think about recent history and its impact on the US$. The FSU ( Former Soviet Union ) had a lively black market in US$'s. In Russia you do business with US$ as with other FSU countries. The Ruble is for the average folks who buy subsistance goods like bread and vodka. The point is clear: the US$ reigns supreme in a nation ( Russia ) that is a major ( 2nd or 3rd - I understand ) supplier of gold.

The gold metal is a relic to the young financial wizards and decision-makers in the canyons of South Manhattan or The City of London.

The gold market is downplayed by the demographic and psychological profile of new money managers who relate the product to jewelry and as a monetary mindset in financial history before the onset of the Information Age ( circa 1981 birth of PC ) that runs on silicon and carbon and industrial processes that - to a very minor extent - use gold in the production function.

Gold is tending more to the dynamic of the commodity market than to the financial reserve market since the dawning of the Information Age - check the stats and see the trend/chart and tell me something I am missing please.


Date: Fri Jun 13 1997 17:45
LSteve @raised eyebrows>(@raised eyebrows):
To: Monetary Realist

Interesting post this morning. I myself am a tweener ( between the Gen X and Boomers ) , and have younger siblings and cousins. I try to talk to older friends or family about future economic activity and their eyes glaze over. They don't even want to think about it. However when I talk about this to my younger sisters and cousins I'm amazed at how much they know and think about this topic. Several of them are actually doing something about it. When my one cousin changed jobs she took her 401K money and paid the taxes and 10% penalty and put the rest into physical gold. She ended up with over 60 oz. Another cousin has bought a small farm in southern Iowa and is beginning a food storage program. These kids seem to intuitively know whats going to happen and are making preparations. Anyway, good luck.

Date: Fri Jun 13 1997 17:47
Bob M>(
Bob- well said. You have hit on a major major point, the mindset of young people, and gold does not fit into that plan, short of a major catastrophe. The point about mines forward selling is well taken also, until that dries up...flat to down. I have believed all along that the likely way for gold to go is down still, $200 an ounce would be a more realistic price...Cheers

Date: Fri Jun 13 1997 18:10
Timothy McVeigh @lethalinjection>(@lethalinjection):
Don't shot me up!...I want the lead!

Date: Fri Jun 13 1997 18:15
Anyone hear of the, Crash Protection Team? Yes folks, they are for real. Whether they can stop a depression or not, I don't know. This I do know, anyone expecting the market to lose half it's value in one day....... Well, some things are better left unsaid. A more probable scenario would be a sharp crack in the indexes followed by a rebound ( like we haven't seen this before! ) , but the rebound tops out below the previous high. Sooner or later we wind up in a grinding bear market. A nice slow tortuous affair that leaves the bulls dead and the bears wounded. That's right, I said bears wounded. The bears have taken a pounding of late. In a bear market, some people think, I'll just go short and make a ton of money. Wrong! Bears markets don't go straight down! They go up too! That's what sucks the life out of the bull, the repeated hope for, 'The rally' to begin the new bull. These are usually sharp, short covering rallies that catch some bears by surprise on the right side, but at the wrong time! But more than anything, it's the slooow grinding down that slowly kills everyone. Just look at the gold mining share for the last year plus, and remember how you felt during this period. Remember the little rallies on the way down? Someday that shoe will be worn by other stock holders. Didn't mean to lecture, but let's not party just yet. Things are looking promising for the metals with the breakout of the PGMs. I just want to see a couple more pieces fall in to place. Thirty year bond chart coming soon....

Date: Fri Jun 13 1997 18:28
TED @crashprotectionteam>(@crashprotectionteam):
Hi Panda!...What league do they play in?...hope they're better than the Bosox....Bring on the long bond chart...

Date: Fri Jun 13 1997 18:36
TED @tarnished>(@tarnished):
Tarnished: Can you read this or are you still in the dark?

Date: Fri Jun 13 1997 19:02
Ted @15:11: Ely MN and environs? Thats the spot. Small world; ain't it? After the energy crisis thing in the 70s, I converted to wood heat here in Portland. For many years I reverted to old ways and cut my own wood. Then it was decided by the anointed that the national forests of Oregon and Washington, really belonged only to those who were sensitive and caring. It then became too difficult to find decent wood to cut and was forced to buy it. In retrospect it was always a pleasant, physical activity but the prospect of being forced to do it is now daunting. It's an age thing you know.

Date: Fri Jun 13 1997 19:22
George S. Cole bear market>(bear market):
Panda: I have long felt that a long, slow, grinding bear market such we gold bugs have experienced over the past 17 months is more likely than a 1929 or 1987 type crash. However, the market atmosphere has become so frenzied of late that a crash is a real possibility.

Date: Fri Jun 13 1997 19:25
TED @earl>(@earl):
Earl:, I know what you mean about age and wood heat as I'm feelin a little sore after a couple of weeks of chainsawin and wood splittin with what's called a monster maul ( 40 pound metal maul ) ...if ya can get it over your head and just drop it...SPLIT...I'm determined to stay young physically cause that's my strong suit...never was much fer readin or writin....You can't be that old!

Date: Fri Jun 13 1997 19:27
panda @>(@):
Without further ado, FWIW,


Date: Fri Jun 13 1997 19:30
TED @independanceday>(@independanceday):
Time fer a movie...

Date: Fri Jun 13 1997 19:43
vronsky GOLDBUG IS BACK WITH SILVER LINING - June 13, 1997 Report>(GOLDBUG IS BACK WITH SILVER LINING - June 13, 1997 Report):
Canadian Precious Metals Mining Stocks Expert reviews most promising PURE SILVER PLAYS & others. See ďGoldbugís Weekly CommentĒ - Click RELOAD at Gold Digest page:

Date: Fri Jun 13 1997 19:43
panda @>(@):
George S. Cole -- I know people who jumped in to the index funds less than a year ago ( more like nine-ten months ago ) , they are currently up 29%. I share your amazment at this market action of late. If the market 'corrected' twenty percent ( 1500+ points! ) , these folks who got in less than a year ago would be a little above break-even. Given the 'buy and hold mentality', these fund holders are unlikely to bolt from the market. They are more likely to hold on for a ten, twenty, or more percent loss. Especially given that most are playing with retirement money, and do not perceive an immediate need for the money. The caveat here is, at some point the loss becomes too much to bear psychologically. That is the point of real panic selling, For whatever you can get me! Get me out now! Sell at the market! MF managers on the other hand? Really got to go now, BBL.

Date: Fri Jun 13 1997 19:52
Tortfeasor Redheads>(Redheads):
Ted, I don't have a redhead joke handy but I'll keep it in mind. The trouble is I have a redheaded sister and my secretary is redheaded. I have to mind my manners. I'm getting geared up to watch the Jazz again in an hour. I hope that they don't flop over and play dead like they did the last half of the game Wednesday.

Date: Fri Jun 13 1997 19:55
George Cole: After reading the apocalyptic thread from earlier this afternoon, I have been thinking about how that sudden dislocation would take place.

The volume of funds flowing into MFs is staggering and while it has slowed, it sure as hell hasn't stopped. Someone earlier quoted 5 billion a week. That would act like a gigantic inertial wheel mitigating the initial departure of the smart money. I assume that, it is the departure of smart that will begin to unhinge the market.

The funds, from all appearances, make up the bulk of current activity. Pension funds are also slow to move as well.

The question in my mind is this: Is the departure of the smart money enough to overcome the natural momentum of fund buying and thereby allow a sudden downdraft to occur? The reason I am wondering about the validity of major dislocation, is because we have never experienced this amount of money in stocks that is not likely to pulled with 200 or 300 point down move. .... I am assuming, of course, that there is not an outside event that will frighten the crap out of all of us. ...... As usual, I probably don't understand all of the pieces.

Date: Fri Jun 13 1997 19:58
Monetary Realist @Gravitational Theory>(@Gravitational Theory):
LSteve @raised eyebrows: Tweener - good one! The more I talk to people, the more in becomes plain to see that the younger you are the more sober you are. Granted I don't much talk to the under 25 crowd, but the ones around 30 seem to be low keyed and will not talk much about the future or economics. They seem to be more independent and are not relying upon someone or something else to provide for them in the coming years.

When I sat down and did that post I wasn't angry, though after printing it out and going over it, a few parts read that way. As most have already figured out when I used the term boomer it was in regards to that humanist/enviro-liberal mentality that is so prevalent today. That New Economics thinking - this time its different, we are all going to get rich, 20 year economic prosperity , business cycles are history, they owe it to us, vote for my favorite entitlements programs, what - the DOW went up only 65 points today, soak the rich, the day of judgment will never happen, global village idiots, John Law hero worship, Keynesian doublethink kind of person. The exact kind that is in control of americas future right now. The kind of person who will not think twice about selling the coutry down the river in order to get elected, and who will be written about in the new history books about how they ruined the economy for furture generations.

As to the CB's selling all the gold that they have, why not? Wish that they would so that we will no longer need them anymore. But I wouldn't count on it. Better odds in them trying to take all of yours away...

Date: Fri Jun 13 1997 20:03
Panda: You either have a triangle OR A REVERSE HEAD AND SHOULDERS FORMING

Date: Fri Jun 13 1997 20:05
Ted: You and I could begin a thread on just the mechanics of splitting firewood ( I do have a system ) but I believe it would exceed the forebearance of our fellows. Even more so than that dreadful SS thread and feeling good about helping humanity .... sans pro bono. Of course. ..... If you like, feel free to email me and we can discuss it.

Date: Fri Jun 13 1997 20:15
vronsky Stocks Likely to Rise Further - Major Top Is Near>(Stocks Likely to Rise Further - Major Top Is Near):
Market maven George S. Cole believes secular market reversals are near: Financials DOWN & Hard Assets UP, perhaps reminiscent of 1930s & 1970s. Cole Market Insights:

Date: Fri Jun 13 1997 20:29
vronsky THE COMING RUN ON MUTUAL FUNDS - Saturday Premier Showing>(THE COMING RUN ON MUTUAL FUNDS - Saturday Premier Showing):
America has experienced bank runs and stock market crashes. Now get ready for granddaddy of them all - the great American mutual fund run. Appearing Saturday at your FAVORITE theater

Date: Fri Jun 13 1997 20:39
GFD Amazment>(Amazment):
I never ceased to be amazed by the stuff that shows up at this site!

LSteve: The idea of gold being a Gen-X favored asset is both personally amazing and yet VERY thought provoking. In some ways this may be one of the more profound observations posted here. Hmmm. Very interesting! I have had a few conversations with tweeners and gen-x'ers and I have been very surprised at how sophisticated their world outlook is. The two who I had a chance to talk about things like Vince Foster, etc. not only were very aware of this issue but both had watched the Noam Chomsky's documentary Manufacturing Consent. Gads! I thought I was kind of leading edge on some of these issues and am now starting to feel a bit behind!!

If this is the level of sophistication for a large portion of the tweeners snd gen-x'ers out there, the Clinton Administration ( and the people behind it ) are toast.

Date: Fri Jun 13 1997 20:44
GFD Tight In The Shorts>(Tight In The Shorts):
George S. Cole: Beyond a question of a doubt the developments in palladium and the weak response by gold to that incredibly bearish fed report must be testing the shorts intestinal fortitude to the utmost. Excellent character development what!!


Date: Fri Jun 13 1997 20:46
Strad Master A burning question>(A burning question):
ALL: ( Especially GEORGE S. COLE, VRONSKY, STEVE PUETZ ) many of us believe that a top and crash/meltdown are imminent. George - you believe that around 8000 DOW is the high water mark. What I don't understand at the moment is this: barring some sort of unexpected triggering event - an earthquake in Japan, a war in Europe, Bill going to jail, etc. - what would cause it to go down? Do you feel it would it just melt down due to its own weight? Strange events stimulating a market collapse I understand but what if nothing happens to upset the apple cart?

Date: Fri Jun 13 1997 20:47
UNI @bomber>(@bomber):

Living w/o electricity for 7 years!? Been in the backwoods? Are you sure your not Ted K. chatting online from jail

Date: Fri Jun 13 1997 20:54
UNI: No, I am. 'N yer payin' fer me ISP.

Date: Fri Jun 13 1997 20:56
philby Oregon>(Oregon):
( ACW--cb's dumping gold ) This report doesn't make sense. My calculations show that 1.11 bln oz is about 42000 ton ( 12 oz.--2200 lb ) which at $325 per oz average sales price comes to 360 billion dollars. No way IMHO would gold bottom at $309--more like $200 per ounze taking out virtually all mining companies and investors.
It seems that it would be a lot wiser for central banks to revalue their holdings at market price ( whatever that would be after several occillations ) , and have formal agreements to allow a maximum sales of 5% of holdings in any one year. In twenty years the CB's would make tons more money, and allow a smooth transition to free market gold management.

Date: Fri Jun 13 1997 20:57
Strad: I hear yer fiddle. I think we are on the same wavelength. ( I'd say sheet but I don't read music )

Date: Fri Jun 13 1997 21:30
Steve Puetz @ Strad Master -- burning question>(@ Strad Master -- burning question):
Strad Master: I just ran through some calculations.
Price-to-book ratio DJIA: 1987 - 2.72, 1929 - 4.03, 6-13-97 - 5.82 !!!
Price-to-book ratio S&P: 1987 - 2.50, 1929 - 3.20, 6-13-97 - 5.13 !!!
Dividend yields 6-13-97: DJIA - 1.63%, S&P 500 - 1.73%
Price-to-earnings 6-13-97: DJIA - 20.6, S&P 500 - 22.2
All of these valuation measures make the 1929 speculation look like small potatoes. It appears that much of the move this week was short-covering and speculation in the S&P 500 futures.

Look at these advance-decline numbers this week on the O-T-C market:
# of advances ( Monday thru Friday ) : 2042, 1960, 2007, 2147, 2175
# pf declines ( Monday thru Friday ) : 1981, 2149, 2019, 1928, 2084
About a scratch for the week.

Yes, the market could easily fall on its own weight. Especially when it's in the stratosphere like it is today.

Date: Fri Jun 13 1997 21:36
Steve Puetz>(
Everyone must be watching the Bulls vs. Jazz. No posting for 45 minutes.
I can't find it now, but last-night someone said there was a review of Total Collapse in some recent publication. Whoever sent that notice, could you send me a copy of that review at:
Steve Puetz, 2800 Wilshire, West Lafayette, In 47906. Thanks.

Date: Fri Jun 13 1997 21:54
One of US best-known Analysts in last 20 years, James Dines, shares bullish report on Platinum & Palladium - & their impact on Gold. He likes Stillwater Mining. See Editorials:

Date: Fri Jun 13 1997 22:14
Strad Master In a holding pattern>(In a holding pattern):
GEORGE S. COLE: Would be so kind as to tell us all when you do go into the Rydex Ursa? Many thanks.

Date: Fri Jun 13 1997 22:17
Strad Master>(
STEVE PUETZ: I really appreciate all the numbers ( although I'm sure they mean far mor to you than to a relatie novice like me ) . Nonetheless, I guess an implosion IS possible without an obvious trigger. Thanks for your input.

Date: Fri Jun 13 1997 22:23
RJ OW!>(OW!):
O Gold! I still prefer thee unto paper,
Which makes bank credit like a bark of vapour. ( Byron )

To atone for my sins... I bought a couple of gold coins today. A couple, is that all? Yes but they are proofs and I paid a hefty premium. The absolute worst way to buy gold. Iíll consider it penance.

Date: Fri Jun 13 1997 22:29
Steve Puetz @ RJ>(@ RJ):
RJ: Mea Culpa, Mea Culpa, Mea Maxima Culpa. You are forgiven.

Date: Fri Jun 13 1997 22:31
WW @New England>(@New England):
Strad: Stop looking for an obvious event. The event that will reverse the markets is good old supply and demand. There will be no headline ,at least initially, like '29 and Japan '90. This current parabolic upswing ala '29 will exhaust demand. The ultimate causes of decline which we will hear about will be the reports of recession / depression /falling dollar/higher deficits which will be reported heavily after the Dow tumbles. NEWS follows Price! Gold may finally have its day when financials take it on the nose! THe inevitable maybe not close in price but definitely close in time. Sunnier days are coming when financials fall.

Date: Fri Jun 13 1997 22:41
Unless my bifocals are badly fogged up, I think I just saw a comment
about Steve Shobin of Lehman Bros. putting out a buy on gold stocks.
Maybe I'm dreaming, but check out;
4915/index.html Not being totally braindead, I think he just told us
all what is about to happen. Nite.

Date: Fri Jun 13 1997 22:44
Unless my bifocals are badly fogged up, I think I just saw a comment
about Steve Shobin of Lehman Bros. putting out a buy on gold stocks.
Maybe I'm dreaming, but check out;
4915/index.html Not being totally braindead, I think he just told us
all what is about to happen. Nite.

Date: Fri Jun 13 1997 23:07
SORRY, looks like the line break will not access the URL when you hit
it. Type it in and you will get in.

Date: Fri Jun 13 1997 23:13
nailz @TOPS and BOTTOMS>(@TOPS and BOTTOMS):
ALL...Tops and bottoms are almost always marked by spikes. Many of you think that the metals will just smooth over at the bottom and others say the stock market will just smooth over at the top. I don't think so. I have witnessed every top and bottom in the metals since 1974 in real time. They all had spikes. For no reason can I believe this one to be different. It may not look like much on a weekly 5 minute chart, but I believe the spike is necessary to move stops out of the commodity markets so a trend can reverse. Gold spikes downward may be $5-10 into new territory and silver spikes may be $.40-.60 downward. They generally are swift ( minutes ) and show as big blips on the daily real time charts. Tops generally are new tops of a very small degree after a downward motion of a few days and almost always are tested on the upside at least once more. On 2 of the downward spikes I got stopped out of half of very large positions that kept me from maximizing profits. One came within cents of stopping out the other half. Believe me, I remember them well !!!!! Stock market tops and bottoms I have not watched with the same great intensity and sense of urgency, but have none the less seen them.

Date: Fri Jun 13 1997 23:27
If anybody read my last post and had the idea of watching for the downward spike to begin to add contracts, it can happen while you are gone to the can or just not paying attention. If you are paying attention and try to place a hurried order the call will be fast markets and you will not be filled. You will have to be holding your positions with stops that will not take you out, or have orders on the floor that are open or GTC. Now I don't recall any fast markets in the metals since 1993. Have any rules changed since then

Date: Fri Jun 13 1997 23:28
panda @>(@):
This chart is not a gold chart, but it is interesting never the less. It is a weekly chart of the Dow. In the past nine weeks we have had three weeks with 300+ point gains. If this rate of increase continues, it is Dow 9000 by the end of the year. Some how I just don't think it's in the cards though. If I guess at my bond chart correctly ( uh oh! ) , bonds score their final gains in this month and break 7.25% in October ( ! ) . This is all MVHO, of course. This is based purely on drawing straight lines. No magic formulas or any thing else. The Dow breaking? Look at the chart and form your own opinion, and yes, markets do fall of their own weight! What a noise this one will make! The danger here is in squeezed shorts and weak hands jumping in for the 'killing of a lifetime'. This could go on for another week or two like this, then oh boy! If it cools off, a trading range?

Date: Fri Jun 13 1997 23:43
panda @zzzzzzzz>(@zzzzzzzz):
Final comment for the evening; Just think of it, 4.5% a week on your money. Something akin to interest rates associated with third world currencies. I guess our printing presses are better though. :- ) )
After all, we now have new fifty Dollar bills to go with our Monopoly Money hundred Dollar bills. :- ) ) And look at all the stox we can buy with them! BTW, I think the S&P500 was up 4.1% this week. Take that, you silly NOW checking account! let's see, 1.041^50 = 7.46, so if I put a Dollar in today, in a year, I get $7.46. Hmmmmm, if I put $10,000 in I get $74,600..... Why work? :- ) ) :- ) ) They're coming to take me away, Ha Ha He He... To the funny farm where life is always wonderful!
Good night all!

Date: Fri Jun 13 1997 23:44
PANDA and others .....While I am inclined to believe as do you that the DOW is in need of a steep correction, keep in mind that a tremendous amount of paper money has been created all over the world in the past few years. Almost every stock market in the world has seen gains that few would have ever expected. Maybe, just maybe, along with all the yuppie money from the US, this money may be looking for quality and the US is the current place of choice to park it. Look at Hong Cong. How many billions have been made there that may now be looking for a safe to park. Even if there is some risk in the US stock market right now, it still may be safer than left in HK for some people who may not be in favor with the incoming Chineese government. This upward trend in the DOW could continue for a long time and make even 7750 look cheap. This could also be the reason for the long bond having a run up. It is a fairly good place to park for a while. Who knows how high we will go ?

Date: Fri Jun 13 1997 23:45
Nailz: I could not disagree with you more about 'SPIKES' being needed to indicate reversals. Witness the rolling and bottoming trend of the XAU from December 1992 to the beginning of February 1993, which began a fabulously good bull market in gold stocks. SPIKES are definitely not required to mark a trend reversal - especially big reversals.

Date: Fri Jun 13 1997 23:54
Bulls win....AGAIN!

Date: Fri Jun 13 1997 23:59
VRONSKY....Look at my post again. I specifically mentioned the metals. I have no clue as to the XAUs performance in the past. I am trading it now because it has much more volitility than gold, so later I will know about the movements in it. The past of the XAU is a mystery to me. Remember I specifically said metals. It would be of great interest to me to have those of you astute in other markets to allow me to partake of you sagasity.

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