Date: Sat Dec 26 1998 22:48
Jack (CSFB is reporting talks between Homestake and Normandy...also Great Central may come along) ID#254288:

I can remember if the Credit Suisse First Boston report was posted at Kitco. Excerpt is reported on Yahoo's Homestake Message Board, see #831 - from 12/9

Date: Sat Dec 26 1998 22:40
Rack (Rhody-If the gold in Fort Knox is gone then our private holding) ID#411163:
will be snapped up in a heartbeat.

Date: Sat Dec 26 1998 22:23
rhody (@ Farfel: Yes I see your point on real interest rates vs) ID#411440:
Copyright © 1998 rhody/Kitco Inc. All rights reserved
lease rates. I have been assuming that the short term treasury
rates would be a reflection of the inflation rate. That is to
say as deflation progressed, so would short term rates decline
to maintain the spread. This has not happened nearly fast enough.
It is the mistake that the Fed has made all along. It has kept
short term rates too high, too long and is causing the deflation.
The gold carry kills the price of gold because the Fed has allowed
it to do so by not lowering short term rates as fast as deflation.

The question now becomes, will the Fed do something about this,
or will the Europeans, who have already lowered short term rates
to 3%. The Europeans can stop this simply by terminating gold
leases. If the Europeans terminate gold leasing, that would leave
the entire gold leasing scam to be carried by the United States
and its puppets. I wonder how much gold is left in Fed vaults.
I would lay odds that a huge chunk of that 8 to 14 thousand ton
short overhang is US gold. If that is true then the history
of the Fed using gold sales to control the POG as in the early 70's has already been repeated, because the funds can't cover.

Thank you for your comments. Critical analysis is always welcome.

Date: Sat Dec 26 1998 22:10
Speed (2,000 Texans Get False Overdraft Notes In Y2K Test) ID#29048:
The test was bad enough, but it was compounded by human error. Murphy was just passing through......

My apologies if this was already posted.

Date: Sat Dec 26 1998 22:01
mole (lsc - very helpful, hope you keep posting.) ID#350145:
I do appreciate all the hard work you did tonight and I hope you will keep posting. Things do get a bit crazy here at times, but I do get a lot of useful info here. I am also not a pup, been trading for about 20 years and I do appreciate your taking the time you did. By and large my ideas run a bit counter to many on this site, but some of them are getting used to me. Good luck in the New Year. Its also nice to have someone with a wry sense of humor.

Date: Sat Dec 26 1998 21:33
lsc (gold) ID#278287:
PDG bid was achallenge to all the majors to get moving.A counter bid by nem would be short term neg but med term pos.Nem has to get a handle around it's debt once it does and the commodity moves up the stock goes to the head of the class.So you need a stock deal because they do not want to increase debt hence dilution but a pickup in equity.Let me pass on a rumor that I not only read in print but also heard,perhaps on this thread.ABX for NEM.ABX is hedged NEM is not,with one bid the hedge is nuetralized.Does it make sence?I don't know.

Date: Sat Dec 26 1998 21:16
Bingo (cherokee...) ID#263254:
Another stated buying in the open was to occur at $ least
that is my understanding.

Date: Sat Dec 26 1998 21:03
IDT (lsc) ID#228136:
Do you have an opinion on what will happen to NEM's share price if they get a shot at Getchell. PDG's share price went splat on the news. Will the same happen to NEM?

Date: Sat Dec 26 1998 20:38
Donald (Normandy news) ID#26793:

Date: Sat Dec 26 1998 20:33
Donald (@TYoung) ID#26793:
Thanks. Best to you for the New Year also.

Date: Sat Dec 26 1998 20:32
cherokee (@......cotssm......) ID#288231:

stand on this giants shoulders....

'i can see for miles and miles and miles and miles and miles'
...the who..........who are you?


Date: Sat Dec 26 1998 20:32
lsc (gold) ID#278287:
Copyright © 1998 lsc/Kitco Inc. All rights reserved
ERLE I am a subscriber and I have written more net messages tonight than
I have in two weeks.I am a professional trader/speculator and am not a promoter.I do not pay for my various subsciptions directly a NYSE
member firm pays all of my trading expences.I have what is called a soft dollar arrangement.For every dollar spent in commissions they pickup or
you might say kick back half in the form of paying myn phone bill,computor expences,financial subscriptions etc.I stumbled upon Kitco
after doing research on durban rooteport.I must say you are an interesting group to say the least.By the way I have been doing this since 1967 I am not a pup.

Date: Sat Dec 26 1998 20:31
Donald (@Cherokee; Russia, China, India seek military alliance) ID#26793:

Date: Sat Dec 26 1998 20:26
farfel ( first line...) ID#341226:
...concerning your analysis of the gold/silver leasing RATES.

Date: Sat Dec 26 1998 20:24
farfel (@RHODY...I believe you MUST reconsider your analysis of PM leasing.) ID#341226:
Copyright © 1998 farfel/Kitco Inc. All rights reserved
Until now, I have remained silent regarding your analysis of the gold/silver leasing analysis. However, although your theory is of notable academic interest, I think you are mistaken ( and I would hate to see you get screwed in the PM markets on the basis of your error in analysis ) .

Here's why:

Essentially, you posit that a forward rate below 2.25% would end the economics of leasing . To that effect, you theorize that either the lease rate must rise or the treasury rate must fall.

However, in your entire analysis, you fail to distinguish between REAL interest rates and NOMINAL interest rates. The distinction is certainly not a minor one.

The REAL interest rate is essentially the NOMINAL interest plus or minus the rate of inflation. For example, if the treasury rate is 5% and the rate of inflation is 2%, then the REAL treasury rate is the difference, namely 3%. Conversely, if we are in a pure deflation today and the deflation rate is 2% per annum, then the REAL treasury rate would be 7%.

Without considering the inflation/deflation rate in your analysis, then I believe you are only considering half of the riddle.

Essentially, what I am trying to say is this: your assumption that a low nominal treasury rate or high nominal leasing rate is imperative to end the economics of PM leasing is simply too simplistic.

The treasury rate could remain the same or even increase...the leasing rate could stay the same or suddenly fall...however, if the CPI/PPI were to heat up, then the economics of PM leasing would immediately end. For example, if REAL inflation jumped to 10% per annum, then a treasury rate of 5% would actually yield NEGATIVE 5%. So, even if the lease rate fell to .1% ( free gold ) , it would be impossible to profit from leased metal and ALL PM leasing would immediately cease.

Analogously, for example, a lease rate of .5 percent with a real DEFLATION RATE of NEGATIVE 5 percent would be the same as a REAL lease rate of 5.5% If the nominal treasury rate is as low as 3%, then in such a deflation the REAL treasury rate would be 8%...and metal leasing would still be profitable at the forward rate of 2.5%.

Any notable increase in inflation ( by itself ) would immediately put an end to the economics of PM leasing...and any notable increase in deflation would likely maintain the economics of gold leasing.

That is why your focus on the treasury rate, lease rate, and corollary forward rate is far too narrow. ALWAYS CONSIDER THE OFFICIAL INFLATION RATE ( even if the Clinton government no longer reports the true inflation rate any longer, obscuring it by means of all variety of subterfuges ) .




Date: Sat Dec 26 1998 20:22
cherokee (@.......CHOP-asaki......yes.sir....) ID#288231:

where is the 'buying in the open'
ANOTHER said would happen when
pog went below $330oz?


where is ANOTHER?

washing dishes with hep-rat, big trader, and bre-x!


Date: Sat Dec 26 1998 20:21
Donald (Mining interests and nature preserve in conflict in Chile) ID#26793:

Date: Sat Dec 26 1998 20:16
cherokee (@.....the.ssm.......stoking.the.ssg....) ID#288231:

'i will follow in hitler's footsteps'
..........vladimir zhirinovski

he is currently the #2 man in the duma.....
he hears the voices of the russian wolves
howling from afar......he dreams of being
a czar.....yar....the wolves prepare for
the attack whilst the lambs lie asleep......


Date: Sat Dec 26 1998 20:15
mole (thanks again lsc and Merry Christmas) ID#350145:
I will contact Mr. Doody and get a subscription. That is only fair. The information you did provide was very helpful. I have taken a fairly large position in Vengold via wts with somewhat limited info. Nice to know someone likes the company. Thanks again. mole

Date: Sat Dec 26 1998 20:14
ERLE (Hedgeing definition for the interested.) ID#190411:

Date: Sat Dec 26 1998 20:10
TYoung (donald..thanks, again...) ID#370218:
Hope the new year finds you save me more time than even my spouse...that is hard to do! : )


Date: Sat Dec 26 1998 20:10
cherokee () ID#288231:

censored data....

Date: Sat Dec 26 1998 20:08
cherokee () ID#288231:

and we play their game....


Date: Sat Dec 26 1998 20:06
ERLE (@Isc, and Gold Stock Analyst.) ID#190411:
Copyright © 1998 ERLE/Kitco Inc. All rights reserved
The 295.00USD for the subscription seems a bit steep, unless you are a fundamentalist. I submit that the goldshares are trading vehicles at this time.
Compare the fundamentals of Newmont with Anglogold. They are both liquid and trade on NYSE. NEM has been hacked down to a share price of less than ABX, and new ( AU ) has gotten ripped also. Anglogold in every respect is a better bet than Newmont, especially in the debt/equity ratio. Plus, they will make a lot more money/share.
Their burden is the political system of SA. ( percieved, or, real )
I am a smallholder in AU, NEM, PDG, AEM, TVX, SGOLY, HGMCY, ABX, KGC, and etc.
I do have a big problem with NEM having a .83 debt/equity ratio as compared to .05 for Anglogold. ( HM .41, ABX,.17 PDG.28, before the last two acquisitions. )
NEM will go with POG, but, I will only use it for trading. I cannot imagine the risks of assuming more debt for them if they go on the merger path. Look out below, gotta have cashflow.

Date: Sat Dec 26 1998 20:05
Donald (List of Japanese woes getting longer; economy continues to crumble) ID#26793:

Date: Sat Dec 26 1998 19:47
lsc (Gold) ID#278287:
Jack the wayn this issue is written the GOLD STK Analyst[GSA}has vengold lumped in with Lihir.He thinks that PDG or BMG would be likely suitors.
Believe me I am no gold expert I only own two gold stks TVX and DROOY
and I own them because somewhere deep inside I feel more comfortable
owning some gold basically I feel like you guys do but not as passionately.Gold will has it's $25./50. up day someday and I'll been
gone like a zepher of wood smoke.

Date: Sat Dec 26 1998 19:34
lsc (gold) ID#278287:
Copyright © 1998 lsc/Kitco Inc. All rights reserved
Several months ago the Gold Stock Analyst was of the firm opinion that
Placer would soon make an acquisition because of it's impending
production shortfall.He was quite certain that either Vengold or TVX
would be the likely targets.GGO was never mentioned as a possible candidate.So along comes Placer going after GGO.This he feels is very
disconcerting to NEM who needs GGO. He thinks that NEM will pay the
33 million breakup fee to PDG and then take GGO.NEM paid HM 65 million
to breakup and take Santa FE.I might and that the GSA is very conservative and very detailed in his analysis.He would not wait for
NEM.He would sell GGO and pocket the money.
For Mole I am a holder of TVX but I am quite sure that the GSA leans
toward vengold as a more likely/sutible/desirable candidate for someone.
His best guess is PDG whose plate is admittidly not full or Battle Mountain who indirectly owns 9%.

Date: Sat Dec 26 1998 19:22
gagnrad (funny link) ID#43460:
The Fed reports, fiancial news and State of the Union addresses really look funny filtered through this URL.

Date: Sat Dec 26 1998 18:51
lsc () ID#278287:
Dr. Mr.Mole,
The Gold Stock Analyst is published by Mr.John Doody,po box 308 14 South
Mill St.Nantucket Mass.USA.He is a very widely followed analyst and a friend of James Grant of The Interest Rate Observer.His website is www. He also has a 900# 900 820 gold. obviously you pay
to chat.His fax#is 508 228 8863.
PS I am not Mr.John Doody .I am a subscriber.
I do not know how to send a 24 page report over the net.If I did I would have to ask his permission.Merry Christmas

Date: Sat Dec 26 1998 18:43
ERLE (AUwolf) ID#190411:
Copyright © 1998 ERLE/Kitco Inc. All rights reserved
It is simple, especially after this Santa Claus season, where most of the gifts are of Chinese origin.
If the BigThinker crowd gets their way, and US manufacturing is written off for the benefit of the Wall Street ghouls, it will only make the crash of the service industries all the worse. The initiation of the financial layoffs is now only a cool breeze which will be a whiteout ( greenout ) blizzard in the next year. The redundant will look to their vastly overvalued paper assets with some hope, but the eye of the storm is only so big, and not nearly enough to accomodate them.
Gold stinks, and has for a goodly while. I am not foolish enough to evade the history of paper money. Many of the people here have been utterly wrong about the power of the paper money interests, myself included.
I'd rather be in the damp cave analogy than in the whirlwind that consumes all of the assets outside the historical shelter.
It hasn't been all that long since the last gold bull.
I still have to ask, Where is there any safe haven for assets, if all of the history of money is scrap?
Komos, Hubris, Ate.

Date: Sat Dec 26 1998 18:17
mole (I don't know how lihir is structured or what PD needs to control) ID#350145:
Which I am sure is what they are after. Is it 37% or 51%. I guess you guys saw my earlier post that vengold has, in my opinion very undervalued wts good until June 13, 2000. I do know Vengold is the largest stakeholder with about 20% of stock.

Date: Sat Dec 26 1998 18:14
AUwolf (by PATRICK J. BUCHANAN) ID#254130:
Copyright © 1998 AUwolf/Kitco Inc. All rights reserved

1998 has been marked by a conservative spat between what might
be called the Alfred E. Newman ( What, me worry! ) Club and the
Chicken Little ( The Sky is Falling! ) Caucus. By Christmas, it was
game, set, match -- the Newman Club.
If Japan cannot pull itself out of the ditch, who pulls Asia out? Not
to worry, the Newmanites assure us, the United States will pull the
whole world out, and our president told us how in November:

We had a meeting early on when it was obvious that this economic
difficulty was going to be very, very severe, said Clinton in Japan.
I made a decision ... that we would do everything we could to leave
America's markets as open as possible, knowing full well that our
trade deficit would increase dramatically for a year or two. I did it
because I thought it was a major contribution we could make to
stabilizing the global economy and the economies in Asia.

There you have it. In the name of global altruism, America's great
industrial heartland is to be put on the auction block.

This year, the United States will run a merchandise trade deficit of
$250 billion, with China and Japan accounting for half. As container
ships arrive at U.S. ports full and leave empty, we learn that 200,000
U.S. manufacturing jobs were lost in 1998, bringing to 760,000 the
total since 1989. How healthy is a prosperity where manufacturing



Date: Sat Dec 26 1998 18:11
mole ( thanks again 1sc) ID#350145:
All the better. If the big guys start bidding against each other maybe they will bid faster and higher for Vengold. Or if Placer can't get Getchell maybe they will turn there immediate attention to Vengold. Anyway this turns out it is probably good to have several bidders looking at the same couple of co's if you own them. I sure hope your report is correct. Is there anyway I can see a copy of that article or how can I subscribe? Thanking you in advance.

Date: Sat Dec 26 1998 18:11
Donald (BIS shows derivitaves at US$70 trillion in latest report period) ID#26793:

Date: Sat Dec 26 1998 18:08
IDT (lsc) ID#228136:
Getchell going to NEM not PDG. Did the newsletter make this comment after the buyout by PDG was announced or before?

Date: Sat Dec 26 1998 18:03
Jack (@isc) ID#254288:

Does The Gold Stock Analyst believe that PDG will get 100% of Lihir?
Or are they saying that PDG will get Vengolds approximate 20%, plus the possible Right of First Refusal which VENGF may have from the Rio Tinto. If that was the case PDG could end up with about 37%.

If Getchell goes to NEM, I wonder if PDG will get a payoff, like Homestake did on the Santa Fe Gold deal.

Date: Sat Dec 26 1998 17:51
Allen(USA) (playing=plying) ID#257351:


Date: Sat Dec 26 1998 17:50
lsc (Gold) ID#278287:
Dear Mr. Mole,
The Gold Stock Analyst thinks that NEM must stepup and outbid PDG
for very competitive reasons.Perhaps two shares of NEM for each GGO

Date: Sat Dec 26 1998 17:45
mole (thanks for the repost 1sc, now I can book it - But it is PD not NEM) ID#350145:
Front page Northern Miner December 21-27. Placer makes bid for Getchell

Date: Sat Dec 26 1998 17:31
Allen(USA) (IMHO) ID#257351:
Andy Smith has been lurking here for at least a year or two. May even post psuedonomously. He's written a few times about goldbugs with a derisive attitude. The only thing I can say is See ya at the barbie, Andy lad. We'll be watching your carcass fry and plying it with a special golden sauce.

Date: Sat Dec 26 1998 17:31
Allen(USA) (IMHO) ID#257351:
Andy Smith has been lurking here for at least a year or two. May even post psuedonomously. He's written a few times about goldbugs with a derisive attitude. The only thing I can say is See ya at the barbie, Andy lad. We'll be watching your carcass fry and playing it with a special golden sauce.

Date: Sat Dec 26 1998 17:29
Donald (Looking past the holidays and into the void) ID#26793:

Date: Sat Dec 26 1998 17:24
Donald (@Aurator) ID#26793:
That story seems like big news that has been issued at a time when it would be least noticed, over the holiday weekend. I have been unable to find any other reference of it anywhere.

Date: Sat Dec 26 1998 17:22
Cage Rattler (Euro, $/mark and year-end trading advice) ID#33182:
Copyright © 1998 Cage Rattler/Kitco Inc. All rights reserved
There are significant risks and uncertainties associated with holding positions, long or short, involving the $/mark going into the New Year. After extensive dialogues and interviews with other market makers and inter-bank dealing desks, there is no clear perception of what will become of $/mark once the Euro enters the market. There are three likely possibilities: 1 ) Dollar/mark trading will not be effected by the introduction of the Euro. 2 ) On January 3rd, the dollar/mark will be trading at a dramatically higher or lower level than its close on December 31st. 3 ) The advent of the EURO could eliminate all trading in the $/mark. If quotations for the $/mark cease on the inter-bank market, our dealing desk will cross out all mark related positions without regard to the status/value of those position or the rates ( Dem/Euro, Euro/dollar ) at which the positions can be crossed out. Therefore, our dealing desk heavily recommends that one does not have any $/mark positions as of 11:59 AM Thursday December 31st, at which point we will close for the New Year.

Source is a forex marketmaker firm.

Date: Sat Dec 26 1998 17:07
aurator (Let loose the poodles of banking) ID#257150:
When I read the link you just reposted, I thought, oh sure, the Bank of England:

'is watching the banking sector for any systemic risk'

I can get some sleep now. The Old lady of Threadneedle Street has never been an effective watchdog. More like a Pekinese than a Rottie.

Date: Sat Dec 26 1998 16:54
Donald (Discussion of systemic risk in banking. Argues that the safety net has made it worse.) ID#26793:

Date: Sat Dec 26 1998 16:45
ERLE (Cage Rattler) ID#190411:
Copyright © 1998 ERLE/Kitco Inc. All rights reserved
I always enjoy your posts, and I have learned a good deal from you this past year.
The forex rates having not been locked up for the conversion might make for a bit of entertaining reading on New Year's Day. The fudging, ( American term ) , and machinations to get all of the stragglers on board for the launch, should be a good show for a fly on the wall of the final negotiation.
I hope that the final valuations are as arbitrary as the ones put forth in the South African gold companies consolidations of this past year.
If one is to look to an objective standard; by definition, there is no standard with these currencies.
What is the immutable ratio of Peseta/Lire/Franc/Mark/etc? Which paper has the subjectively derived, higher value. What a mess.
May you make out on this tangle.

Date: Sat Dec 26 1998 16:33
Donald (Important repost (see 4th paragraph) for those who may have missed it) ID#26793:

Date: Sat Dec 26 1998 16:33
lsc (y2k) ID#278287:
Copyright © 1998 lsc/Kitco Inc. All rights reserved
Please forgive my sloppy typing regarding the Gold Stock Analyst
post.I own Forecross Corp.[FRXX]NY OTC BULLETEN BOARD,am currently underwater.As I said on another post the co. has terrible financials
but wiz bang tech.It is now public knowledge that the co. opened a
y2k operation in France.This will be posted on their website[www.]on Monday.I own it because I am piggybacking some people
who are knowledgable in this area.I also should warn you that this co. is very highly leveredged.They are 80% profitable at 5 cents a line.
But more to the point in the news release the following was said.
The factory[FRANCE}will be operated and controlled directly by
Forecross via secure Internet links.Forecross is a San Francisco CO.
FORECROSS.COM? as in EBAY.COM? I think that the company has moved out
of the publicly traded lottery ticket stage.

Date: Sat Dec 26 1998 16:33
Jack () ID#254288:
Copyright © 1998 Jack/Kitco Inc. All rights reserved

I think that Bubba said the Asian problem was just temporary blip ( I never use exact words, just the meaning ) . Obviously someone in Bubba's highly effective Cabinet had to pass the info to him. Wonder who?

The Internationalists just wanted a piece of the Asean pie, and they got it; Right in the Face. Then the problems spread like the plague, right across the peaceful globe and scared money kept pouring into US from all points sending our markets to ever increasing heights, even in Europe the markets rolled up.
Along the way, LTCM, Tiger and Soros offered some angst, but then Al stepped in with a group of sweating internationalists, to make things whole; or should I say to dig the hole deeper.
The internationalists stand for greed and power over the masses and gold offers protection, so when they come to get it, be prepared.

Date: Sat Dec 26 1998 16:32
Cage Rattler (Japan - We have passed the bottom of the darkness.) ID#33182:
Kyodo news agency also quoted Bank of Japan Governor Masaru Hayami as saying in an interview that while he still has concerns about deflation in the Japanese economy, ``We have passed the bottom of the darkness.''

Date: Sat Dec 26 1998 16:27
Cage Rattler (Iraq playing hardball) ID#33182:
BAGHDAD, Iraq ( AP ) - Iraq will fire on warplanes patrolling the no-fly zones, Iraqi Vice President Taha Yassin Ramadan said Saturday.
Speaking on Qatar's Al-Jazeera television, Ramadan was asked if Iraq would accept the overflights of U.S. and British aircraft that maintain no-fly zones in northern and southern Iraq.

``We say frankly now that any violation to Iraqi airspace will be met by Iraqi fire,'' Ramadan said.

Date: Sat Dec 26 1998 16:18
Cage Rattler (Euro conversion timetable - currencies NOT locked yet) ID#33182:
Copyright © 1998 Cage Rattler/Kitco Inc. All rights reserved
I noticed that it was mentioned that the conversion rates for legacy currencies have already been fixed re: the euro. As a forex player, I don't believe that this has happened - there may be a synthetic rate at present but the actual locking occurs at year end after close of business - further info is available at the bridge site and at the Bank of Englad site. A useful reference for conversion weekend is the following document:

The irrevocable conversion rates will be made public at 12:30 CET on 31/12/1998 at

Date: Sat Dec 26 1998 16:17
lsc (Vengold) ID#278287:
Dear Mr. Mole,RE:the prey targeted by the hunters.

The Gold Stock Analyst Jan 1999 issue thinks that the deal certainty of

a takeover is 100% in the below 5 and 75% in the others.



[3]Lihir and Vengold


[5]Getchell going to NEM not PDG





Date: Sat Dec 26 1998 16:16
Donald (Fradulent bookkeeping to worsen as economic turmoil devastates balance sheets) ID#26793:

Date: Sat Dec 26 1998 15:50
Squirrel (God help Britian & Switzerland) ID#287186:
When socialists from Sea to Sea to Sea to Sea hammer out a united Europe/Eurasia those two will be embattled islands once again. This time they may succumb because America may not be able or willing to help. ( And it serves France right! )
A new Switzerland may arise in the mountain bastions of North America.
For those who can still get in - New Zealand may be a retreat of last resort. Ever play RISK?

Date: Sat Dec 26 1998 15:48
Realistic (A year ago (educational reality check!)) ID#410194:
Copyright © 1998 Realistic/Kitco Inc. All rights reserved
Date: Thu Dec 25 1997 16:54
Donald__A ( Steve Roach prediction: 30 year Treasuries over 7% by mid 1998 ) ID#26793:

Date: Thu Dec 25 1997 11:34
The Hatt ( The Shorters are feeling the pressure of WHAT IF? ) ID#294232:
The mania that has driven gold to its low has ever so slightly changed
course and it will not be long before we see further evidence that this

Merry Christmas To All!

Date: Thu Dec 25 1997 09:53
223 ( CMax @ All: ) ID#26669:
Thank Heaven that the 1997 gold Bear is gone and will take its place in the pantheon of mythology. Hopefully not to revisit us any time soon!

Date: Thu Dec 25 1997 00:25
TZADEAK* ( @ Looking Ahead..... possible scenerio? ) ID#372344:
So I would looke for Gold to slowly inch back over 300 in a very orderly
fashion, with the real BIG moves coming as Euro gets underway...

Date: Sat Dec 26 1998 15:27
Jack (@2BR02B....ref to your 13:04...and some random thoughts ) ID#254288:
Copyright © 1998 Jack/Kitco Inc. All rights reserved

Who was that poster mentioned by Andy Smith?

My belief is that gold has been so badly maligned and badmouthed by the media since early 1996, that it may take investors a bit more time to see things clearly.

We've have also have stock and bond markets on a near constant uptrend; in which any correction is considered a buying opportunity. Add Greenspan's three rate drops and it becomes quite clear that still more fuel has been added to the fire.

The Japanese Yen.........has the potential to surprise and burn in either direction; purchasing gold, especially paper gold can lead to impossible losses. An investment strategy based on Japans volatile fundamentals could be extremely dangerous.

If Japan's Government were to openly add to its gold reserve, the case would be different.

As for those bond buggers, they just love that fiat offspring called interest. But, they fail to notice that with many currencies becoming worthless, so will the interst earned on them. They also forget that the dollar has lost a good portion of its value internationally over the years, even if at this moment the dollar is considered almighty, what else is there left to run to. The Euro, Gold.

Yep, Andy Smith is back at it again and he's using Kitco posters to boot.

Date: Sat Dec 26 1998 15:26
Squirrel (Panda's url @ 09:55 and let's hear it for Hillary for President) ID#287186:
Copyright © 1998 Squirrel/Kitco Inc. All rights reserved
Zurich Group's Hale said: ``There really is no alternative to keeping the American bubble bubbling along for at least 12 more months -- it's a matter of good international policy. The reality is there's no other growth locomotive in the world.''

Keep it bubbling 'till Slick Willy is out. Then all the chickens can come home to roost when Hillary takes over. I will serve her right - a combination of WWIII, Great Depression II and War Between the States II.
It will have been on her watch that the US Government came to an ignonimous end - and who can she blame it on - her ex-hubby of course ( and the vast right wing conspiracy - responsible for 600 new nation-states. ) Reno will have her hands full - the military won't help her.

Date: Sat Dec 26 1998 15:16
Squirrel (The light at the end of the tunnel) ID#287186:
Growing evidence shows it to be the headlight of an uncoming locomotive
BUT the kids still insist on playing monopoly between the rails.
( they must be deaf to all the economic signals being telegraphed around )

Date: Sat Dec 26 1998 14:40
Delphi (Speed) ID#258142:
Who knows long term how it will go with $/EURO? I think, $ will go down - - a long term trend. What is for sure, on Jan 4th all bourses in 11 EMU countries will start trade in EURO’s only. May create some demand, right?

Date: Sat Dec 26 1998 14:10
Speed (Delphi) ID#29048:
Thanks for the Euro corrections. I pulled the data from the Houston Chronicle today. They got it from Knight-Ridder. I am looking for anything that might indicate a lengthy period of ever weakening dollar ( grasping for straws ) and therefore a bounce in commodities.

Date: Sat Dec 26 1998 13:49
Delphi (Y2K in practice) ID#258142:
Copyright © 1998 Delphi/Kitco Inc. All rights reserved
Here is a translation of a letter, I have received recently from one of suppliers
Dear ….
Different media sources pay much attention to millennium problem. At present time nobody know, what exactly the consequences of this event will have for computerization world. To be short: number of products will not handle correctly the date change in year 2000. It is not clear, what are these products. We know for sure, that this problem is not limited to hardware, but also applied to software applications, tools and operating systems, that will may not handle century change without problems.
As a distributor, we have no influence on specifications of products we deliver and will deliver in the future. It is possible, that product, we deliver is millennium-proof. That does not mean, that when coupled with other systems it will remain millennium-proof. It is also possible, that that some upgrades where done ( or not done ) , so it is not easy to define how it will behave in respect to mentioned problem.
We find it important that you will react in advance for possible consequences for you and your customers. You can inform your customers and also test your own information system. By doing this you can avoid possible problems and reduce possible losses.
For better information on this matter we have established a special web page on our Internet site to inform you about our products and Y2K. You can also find links here to actual millennium sites including sites of our suppliers.
This letter is pure informative and can not cause any legal consequences. We do not keep any responsibility for coming century change problem, except cases when we explicitly confirmed that.
We hope, we informed you enough……
Good, isn’t it? Sorry for poor English

Date: Sat Dec 26 1998 13:45
Delphi (Speed, 12:05 (Euro time table....)) ID#258142:
Copyright © 1998 Delphi/Kitco Inc. All rights reserved
Probably, the source of data you posted is a bit outdated and for sure not European one
1. Rates of all 11 participating currencies are already fixed, you can probably find them at CNN Teletext
2. Retailers post dual prices - that’s wrong. It is up to any company when to switch to Euro. I can do it on Monday ( effective from 01.01.99 ) or wait till 2002 - depending on the nature of business - only those who deal with cash - shops, bars, etc. - can not 100% migrate now. But those who did not switch to EURO now ( or year later or whatsoever ) can present to local authorities their year and quarter figures in national currency - no need for double accounting. Some shops begin to place price tags in both national currency and EURO’s, but nobody ask them to do it. Own initiative, they want to show how they are up-to-date, nothing more.

Date: Sat Dec 26 1998 13:39
mole (Didn't James Baker (sec of tres) drive the dollar lower in the 80's?) ID#350145:
Seems to me U.S. may need to do something to raise commodity prices as the low prices are undermining our producers. A lower dollar would help. At the some time it seems normal to me that gold would be low if all other commodities in the world are low, in dollar terms, except maybe dates - havn't checked dates and squid - real shortage in squid. I am positive about gold in 99, but maybe that is just my nature.mole.

Date: Sat Dec 26 1998 13:36
Steve in TO (Another kind of replay . . . ) ID#209265:
Copyright © 1998 Steve in TO/Kitco Inc. All rights reserved
remember that in the 1920's a country that had lost a war was misgoverned and suffered through a hyperinflationary debt default. The country was very nationalistic and felt humiliated by its loss of military power.

The country was ripe for a military dictatorship, and when the arrival of the worldwide deflationary collapse threatened to cause widespread famine the group of men who would soon be called fascists made their move.

The newly installed strongman got the trains to run on time ( a point of national pride among the Germans ) and kick-started the economy with a huge investment in rearmament. Massive defense spending was what would lift the USA out of its depression 8 years later

We've seen the first stages of this train of events repeated in Russia. I have a colleague who visits and interacts with Russians regularly, and he says the country is ready for a fascist takeover.

Have a look at the following article:

Global Intelligence Update
Red Alert
December 21, 1998

Russia Ends its Flirtation with the West

In the midst of last week's chaos, a single, crucial, clear and
historically significant event took place. Russia's geopolitical
flirtation with the West finally came to an end. There will
undoubtedly be periods of reconciliation, cooperation and even
good will in the future. But a sudden and powerful consensus
emerged in Russia that held that Russia had been betrayed by the
United States over Iraq, and that the only way out of this
situation was for Russia to once again reassert itself as a great
power. What is most important in this view is that it is the
only issue on which all factions appear to agree. Apart from a
few, isolated pro-western liberals, the view from the office of
Boris Yeltsin to the most extreme nationalists and communists was
that the decision by the United States to bomb Iraq was
intolerable. It has the potential to be the foundation of a new
Russian political consensus, with critical consequences for the
international system.

The problem was not only that the United States bombed Iraq, but
that it did not even consult Russia. Indeed, that is one of the
most peculiar aspects of this attack and the one that led us not
to expect this attack. One of the operational principles of the
Clinton administration has been that it was unwilling to take
unilateral military action. Repeatedly, even at the cost of
substantial delays in initiating military operations, the Clinton
administration worked slowly and deliberately both to maintain a
broad coalition of international support and to remain within the
framework of international organizations, such as the UN and
NATO. The administration completely departed from this pattern
this time. The Russians, who normally are carefully informed and
consulted, found out about the attack from their own intelligence
services, according the Yeltsin's press spokesman. In fact, he
complained, while French President Chirac had told Yeltsin that
an attack was coming, he himself had given the wrong time,
indicating that the French weren't informed either.

The administration's position was that, after the last crisis,
the United States had warned Iraq that it would proceed without
further consultations if Baghdad violated its agreements. But
this warning had been given before in the aftermath of other
crises. Unless the United States had some intelligence warning
that the Iraqis were about to take some imminent action that had
to be prevented, there was no urgency in the timing. No one in
Washington has asserted an immediate threat from Saddam,
certainly nothing that would not have permitted 48 hours of
diplomatic consultation. Nevertheless, the United States needed
urgently to launch its strikes on Wednesday night, and therefore
violated its own avowed diplomatic norms.

The reason for the hurry-up strike is obvious. The effectiveness
of the attacks is minimal. Neither Saddam nor his weapons of
mass destruction have disappeared. The attacks achieved little
accept a 24 hour delay in the impeachment vote. But the failure
of the United States to consult with the Russians has, we think,
had a permanent effect. A process that has been underway for
several years has crystallized. Russia has been retreating from
both its liberal economic reforms and its pro-Western foreign
policy slowly for several years. The trend has accelerated since
Primakov, the former head of foreign intelligence for the KGB,
become Prime Minister. Now, the increasing anti-Americanism in
Russian foreign policy has been galvanized. It was something
that was waiting to happen. Nevertheless, it has happened now,
and we need to consider its meaning and consequence.

What must be understood is that a firestorm swept Moscow last
week. It was not only the government that was shocked by the air
strikes on Iraq. The rhetoric from across the Russian political
spectrum was startling. The lower-house of the Duma passed a
resolution that resolutely condemned the barbaric bombing of the
Republic of Iraq, and said that it was an act of international
terrorism that posed a direct threat to international peace and
security. The resolution passed 394-2. Yuri Luzhkov, the mayor
of Moscow who is leading polls to succeed Yeltsin as President,
said, In these conditions, we have to develop our defense
industry, and that, Russia must be a great military and sea
power. According to Itar-Tass, he also said that We need a
modern army, a reliable nuclear deterrence system. The
international community needs a strong Russia as a great power
that respects itself and other powers. Gen. Leonid Ivashov, the
head of the Defense Ministry's international military cooperation
department, said that Moscow will be forced to change its
military-political course and may become the leader of a part of
the world community that disagrees with the ( U.S. ) dictate.
Prime Minister Yevgeny Primakov summed it up: We condemn the
United States, and nobody should doubt our negative attitude.

Of particular interest here is the universality of the
condemnation and the nature of the rhetoric. Russia has been
deeply fragmented, a polity in search of a center. For the first
time since the collapse of the Soviet Union, Russia has found a
center around which virtually every major faction has been able
to rally: opposition to American hegemony. There is also a
growing consensus that Russia must somehow recover the
international greatness it lost. Izvestia ran an article
asserting that the past days simply prove that Russia is no
longer a superpower. The liberal newspaper Sevodnya asserted
that, Russia has the same influence on world affairs as any
third-world country. The business daily Kommersant, lamented
that Russia had poor real-time intelligence from the region
because it has only one electronic intelligence satellite that
provides coverage only once every 24 hours. In addition, it
complained that the missile tracking station in Azerbaijan does
not track cruise missiles of the type used by the United States.
Now, Kommersant is normally much more interested in an IMF
tranche or in trade issues than in doing careful analysis of
Russian operational military capabilities. Everyone is upset.

There is a general sense that the international strategic decline
of Russia has gone too far and must be reversed. This
sensibility has become so strong now that it will, we think,
become not only a rallying point in Russia, but more important,
something from which no Russian aspirant for political power will
be willing to stray. Except for a minor handful of Russian
politicians, a dual commitment is emerging. First, there is a
commitment to reverse the decline in Russian power. Second,
there is a commitment to improve Russia's military posture.
Anyone not committed to this is not going to be a political

This evolution has, as we have long argued, been inevitable. On
December 29, 1996, in our 1997 Forecast, we wrote that: The
Russians have given away their empire in return for very
little... Yeltsin, unfortunately, has delivered little order and
less greatness -- and Russia is sick of it. Liberalism in
Russia has been a disaster without any silver lining. The
average Russian is poorer today than he was under the Soviets,
and much less secure. Perhaps worst of all, Russia does indeed
have the influence of a third world country. The United States
would never have ignored the Soviet Union in deciding to attack
Iraq, as it has ignored Russia. It is absolutely essential for
non-Russians to understand just how intolerable this indifference
is to the Russian psyche.

There is a real parallel here between Russia today and Weimar
Germany. The collapse of Imperial Germany ushered in a period of
economic decline, desperate poverty, massive inequality and a
sense of the impotence of the liberal regime not only in economic
life but also in international affairs. The combination of
poverty and the sense of being treated with contempt by the
international community created uncontrollable social forces
committed not only to the abandonment of political and economic
liberalism, but also to a massive readjustment in the
international system. National Socialism was the outcome.

Russia is in precisely the same position today. Liberalization
had created economic disarray: poverty, inequality, and
hopelessness. But what is going to galvanize the Russians
psychologically is their loss of international standing. Bill
Clinton rubbed their faces in the fact that it really doesn't
much matter what Russia thinks. Focused on his own problems, he
failed to calculate the impact of his actions on Russia. It is
not that this evolution wouldn't have taken place anyway.
Clinton's action produced a galvanic revelation. It drove home
American contempt for Russia's views and brought together the
entire Russian polity around a single issue: the return of
Russian greatness.

The reconstruction of Russia's military is inevitable. Economic
dislocation does not block this. Remember that Germany
revitalized its economy with a rearmament program. In only five
years Germany went from essentially disarmed to being able to
overawe its enemies. Russia's armed forces are in far better
shape today than Germany's were in 1933. Although in disarray,
its research and development has continued and it has substantial
technologies in the pipeline as well as a massive standing force.
Revitalizing those forces and increasing defense production could
be precisely what is needed to kick-start the Russian economy.
It worked for Germany. At various points, it worked for the
United States and other countries as well. Since nothing else is
working for Russia, they may as well give it a try. We think
they will.

Even today's Russian armed forces, if merely paid and fed, pose a
real challenge to its neighbors. We believe that one of the
things that will flow out of this consensus is an increased
determination to recreate the old Soviet Union, in the sense of
reintegrating the fragments into a whole. There is already a
great deal of economic integration and dependency. It is
inevitable that the new Russian nationalists will want to create
an integrated political framework over that. It will use
economic power to achieve its ends. It will also use existing
military forces to force coordination and reintegration. There
is not much talk of reintegration yet. There will be.

The Iraq issue is a good place to start. Primakov, who knows the
Arab world from his KGB days, can use his pro-Iraqi stance to
increase Russian influence among Islamic factions in the
breakaway fragments of the former Soviet Union. By aligning
Russia with Iraq, Moscow becomes a friend of Moslems rather than
an enemy. This not only increases Russian influence with
opposition groups in countries like Kazakhstan, it increases the
probability that Moslem countries will use their influence to
move these groups into a pro-Moscow stance.

But the real test will come in the West. The situation in the
Baltic countries is intolerable to Russia. Kaliningrad, part of
Russia, is cut off because of Baltic independence. Aligned with
the West, these countries jeopardize Russian presence in the
Baltic. More important, with Poland entering NATO, these
countries become the only buffers between St. Petersburg and
NATO. Russia cannot allow this to happen. The Baltics, like the
Ukraine, are part of the Russian sphere of influence. However,
since 1989, the Baltics have had the luxury of neglecting power
politics. This should not be mistaken for a permanent condition.
While western investment flowed, Russia was motivated to forego
its national security interests. Now that investment has
stopped, Russia will resume its natural search for national
security, especially as this will also make for good domestic

This will have serious repercussions for Europe in general and
Germany in particular. German officials were, to put it
tolerantly, babbling incoherently in the face of the Washington-
Moscow crisis. As if trying to convince himself, Defense
Minister Rudolf Scharping said, Everyone, even the United States
and Great Britain, felt that what was happening in Iraq had
nothing to do with NATO. When asked whether Germany would
participate in attacks on Iraq, he said that, We haven't been
asked, but we gave clear political support, and that's where
things will stay. Foreign Minister Joschka Fischer said that he
expressed solidarity with the United Nations, as well as with
the United States and Britain. Taken together, the German
position seems to be that Germany supports everyone and is
confident that nothing means anything and that they sincerely
hope that all this will go away.

Germany's anxiety is completely justified. Not only is Germany
massively exposed on Russian loans that are not going to get paid
any time soon, if at all, but the reemergence of the Red Army
along the Baltic countries' frontiers or worse, along the Polish
border, is a dreadful German problem. Russian nationalism is
Germany's worst nightmare. The only thing worse would be a
Franco-Russian alliance, which certainly seems to be taking
shape. According to United Press International, a French
diplomat in Amman stated that France is in constant consultation
with Russian leaders. He also went on to say that France could
never support any demands to change the Iraqi regime by force and
from outside in harmony with its constitution and international
laws, saying this was why Paris did not take part in the latest
military operations against Iraq.

Now obviously, a Franco-Russian arrangement in 1999 is very
different from one in 1938 or 1914. Many things have changed.
Nevertheless, France's growing anti-Americanism and links to an
anti-American Russia will pose a serious challenge not only for
Germany, but also for the European Union. It will pose questions
for the SDP-Green coalition that it would be best not to have to
answer. It will force open the question of the relationship
between a unified economic apparatus and Europe's foreign policy,
a question that the EU is not at all ready to confront. Finally,
the inclusion of China in this alignment affects both the global
balance of power and the structure of Asian regional politics. On
a question of fundamental importance to the United States, Iraq,
a coalition consisting of France, China and Russia has emerged
very publicly, with Russia playing the leading, active role.
This is a matter of great significance. It is far more important
than the future of Iraq.

In this sense, the U.S. attack on Iraq has had a thoroughly
unintended consequence. It has triggered a response inside of
Russia that will have lasting effect. This response will change
Russian defense policy and, in turn, will provide Russia with
opportunities to assert itself along its current frontiers,
increasing tensions in Europe and Central Asia dramatically. But
the global effect will be the most significant. Since 1989, the
world has lived in an unnatural condition of imbalance, with only
one major power. This could not long endure. As in 1972, when
the U.S. and China aligned themselves to contain the Soviet
Union, a new alignment designed to contain the United States is
emerging. Including France and China, its center of gravity is a
re-energized Russia. This has been developing for a long time.
What is most interesting is that it was an act of carelessness on
the part of the United States that provided the trigger for a sea
change in Russian politics, a sea change that will reshape the
international system.


To receive free daily Global Intelligence Updates,
sign up on the web at

Date: Sat Dec 26 1998 13:27
mole (should be nem not men) ID#350145:
still waking up-sorry

Date: Sat Dec 26 1998 13:25
mole (-TVX, greenstone, vengold - lihir and others - best gold gamble for 99) ID#350145:
Copyright © 1998 mole/Kitco Inc. All rights reserved
yesterday 1sc posted a newsltr indicating ABX,HM,MEN AND PD maybe looking to take over the above co's in 99. I agree and have heard this from many sources. So I thought I would post my favorite GOLD GAMBLE FOR 99. Many people do not know that vengold has wts good until June 13,2000. I have been buying them for several months, some at mkt and some with stink bids. Vengold B wts ( t.ven.wt.b ) .25 -stock .95 ( warning these stock options can expire worthless ) . vengold b wts are 1 for 1, strike $1.30, expire June 13, 2000. There are also a wts with a strike of $2.35. Any rise in gold above $300 should blow the stock through the strike for b $1.30 ) . Vengold holds largest stake in lihir gold mine Papua New Guinea ( one of the worlds 10 largest - 40 mil oz - I think ) . Placer dome bought $46,000,000 worth of shares in 98 at $1.75. Stock can rise with gold, exploration or a takeover which seems almost certain by many. same guys who put Getchell and PD together also bought the vengold for PD. Its a GAMBLE, but great leverage. I hope this info gives someone a christmas present. good luck to all and a happy new year. I finished my buying thursday by getting all my .15 stink bids filled. my christmas present-maybe. one should do there own investigating on these before purchasing. mole

Date: Sat Dec 26 1998 13:11
Steve in TO (More deja vu all over again . . . ) ID#209265:
Copyright © 1998 Steve in TO/Kitco Inc. All rights reserved
remember that the prosperity caused by free trade in the 1920's was undone as countries became increasingly protectionist when the collapse that began in 1927 spread around the world. The infamous Smoot-Hawley Act led to all-out trade war between the US and the rest of the world.

Have a look at Eric Margolis' latest article ( sound familiar? )

Banana Wars
Eric Margolis 24 Dec 1998

NEW YORK - The rubble in Iraq had barely stopped bouncing when
the Clinton Administration launched a new war this week against
a far bigger and nastier adversary than Saddam Hussein.

On Tuesday,the US unleashed a devastating, Pearl harbor-
style, pre-Xmas, surprise attack on Europe.

Washington imposed 100% tariffs on European luxury goods,
effective in February, as a result of Europe's refusal to
drop import barriers on Central American bananas. A senior
US trade official predicted the American offensive against
Europe would `hit them where it hurts.'

And how. Uncle Sam's wrath was aimed at sensitive targets as
Hermes scarves; Pecorino cheese; `Louis Vuitton' purses;
bed linens; cashmere sweaters, skirts, and pullovers; and
`Mont Blanc' pens. Their retail prices will double if the
punitive tariffs take effect.

Europe, sounding remarkably like Saddam Hussein, quickly
announced it would retaliate against `American aggression
and bullying.'

The two sides have been slipping relentlessly towards a
banana war for years. Europe gives preference to bananas
imported from former British and French Caribbean and
African colonies. This hardly seems a `causus belli' since
the US does not grow bananas. No US jobs depend on bananas.

However, two politically powerful American multi-nationals,
Dole and Chiquita, were outraged that bananas from their
vast plantations in Ecuador, Honduras, Guatemala, El
Salvador, and Nicaragua were being excluded from banana-
loving Europe. It's not polite any more to call these
nations `banana republics,' but bananas remain a huge
business, and primary employer.

Carl Lindner, Chiquita's chairman, is a big contributor to
both parties, and a close friend of Clinton. Banana and
sugar rank among America's most politically influential
agricultural interests. Chiquita and Dole run the world's
largest, most efficient banana plantations that undersell
and outproduce Caribbean or African banana growers.

Hence the banana war, a conflict reminiscent of the spice
wars of the 17th and 18th centuries between Britain, France
and Holland. A coffee war over designer beans is probably

Bananas are, as I remember, very tricky fruits. Three
decades ago, as harbor master in Montego Bay, I used to
routinely supervise lading of bananas into British steamers.
Burly stevedores would first dunk a big stalks of green
bananas into a drum of water to wash off the extremely large
and hairy wolf spiders that nested on the fruit. Then,
shades of Harry Belafonte, a tallyman would make the count
as the bananas were hoisted into the holds of white-painted

The ships then headed off across the Spanish Main at top
speed for England. Bananas, though they look friendly, are
dangerous cargo. Bananas ripen quickly. As they do, their
sugars give off volatile gases, and a thick, malodorous
sludge - which, incidentally, Italians counterfeiters would
use in the 1980's as a base for fake red wine. Unless
properly vented, banana gases can explode. Numerous banana
boats have been lost in this fashion.

Europeans adopted a favorite form of Japanese trade sabotage
to impede imports of Central American bananas by discovering
`irregularities' in shipping documents. A day's delay in
delivery could ruin a shipload of the fruits. This
infuriated Chiquita and Dole, so they called in favors at
the White House.

Dastardly Europeans were not the sole object of America's
commercial ire. Brimming with righteousness and pre-Xmas
jingoism over the `victory' against miserable, defenseless
Iraq, Washington is shaking its big stick at other
malefactors, such as Canadian wheat exporters, and Japan,
which just slapped a 1,000% tariff on imported rice to
placate its highly inefficient but politically mighty small

So, just as we head into Christmas, the world is locked in
an international trade war. Personally, as a patriotic North
American, I've decided to aid the war effort by not buying
cashmere sweaters or Italian handbags for any of my female
friends. Instead, they'll each get a case of Chiquita

copyright eric margolis 1998

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Date: Sat Dec 26 1998 13:04
Steve in TO (1920's all over again . . . ) ID#209265:
Copyright © 1998 Steve in TO/Kitco Inc. All rights reserved
Hate to sound pessimistic, but remember that the Wall Street crash of '29 was preceeded by countries sliding into deflationary depressions overseas. The collapse of the British economy was what forewarned Irving Weiss of the collapse that would follow in North America.

Japan continues it's deflationary downward spiral, according to the attached article. The Central Bank and the various gov't ministries can't do a thing about it, but you can be sure that 10 years from now the CB will be blamed for not having inflated enough:

Japanese Economy

Japan's Slump Won't Quit

Unemployment at record level

TOKYO - A series of reports Friday showed that Japan's economy continued to crumble last month, with the
unemployment rate rising to a record high and no indication that the country is poised for a rebound.

The Management and Coordination Agency said Japan's unemployment rate rose to a record 4.4 percent as
corporations cut payrolls and suffered a wave of bankruptcies.

In addition, government figures for November show that industrial output is sliding and that sales at
department stores are slumping. A report from financial authorities also shows that Japan's troubled banks
have even more bad loans than previously thought.

The unemployment rate was the highest since the government started keeping track in 1953. It had been
stable at 4.3 percent for three consecutive months to October.

For the first time, the unemployment rate in Japan equaled that of the United States, where the jobless rate
also was 4.4 percent in November. While in Japan the rate is a record high, in the United States it is one of the
lowest rates in 30 years. Some economists, however, argue that Japan's joblessness is probably higher than
the official figure states because unemployment is narrowly defined.

The International Monetary Fund said in a report released Monday in Washington that it expected
unemployment in Japan to average 4.9 percent in the year through December 1999.

Taichi Sakaiya, head of the Economic Planning Agency, said the situation would very likely get worse before it
got better. ''There's strong pressure for the jobless rate to rise,'' said Mr. Sakaiya, one of Japan's top
economic planners, adding that the rate was viewed ''with grave concern.''

Large companies in Japan generally reduce excess labor by hiring fewer university graduates and offering
early retirement packages to older employees. Of the 2.9 million unemployed in Japan, 800,000 are aged 24 to
34 years, and 550,000 are between the ages of 55 and 64.

The news was no better for Japan's once-mighty manufacturers. Industrial output at factories and mines in
November fell a larger-than-expected 2 percent compared with the previous month, the Ministry of
International Trade and Industry said. The fall was considerably larger than forecast by private economists
and the government.

While the ministry predicted there would be a 0.3 percent rebound in production in December, it agreed with
other forecasters that a recovery was not yet in sight.

''There still isn't enough data to indicate that the economy has hit bottom,'' the ministry said.

Meanwhile, the Trade Ministry also reported that sales at major department stores and supermarkets fell 1.5
percent in November from a year earlier, the seventh straight month of declines.

Also on Friday, the Japanese government approved a record budget of 81.86 trillion yen ( $705.84 billion ) for
the year to March 31, 2000, officials said.

The budget, adopted at a special cabinet meeting and pending approval by Parliament, is up 5.4 percent from
the initial outlay for the current fiscal year ending March 31, 1999. The government aims to haul Japan out of
recession with the huge budget and achieve 0.5 percent growth in gross domestic product, although 37.9
percent of spending will be paid for by government debt.

This year the government has approved two stimulus packages worth a combined 40 trillion yen, and it has set
up a fund of 60 trillion yen to deal with the banking crisis. The economy has contracted for four consecutive
quarters through September, and Tokyo estimates the economy will shrink 2.2 percent in the year through

International Herald Tribune, Dec. 26, 1998

Date: Sat Dec 26 1998 13:04
2BR02B? (A. Smith, lurker) ID#266105:

The Final Word...
Mitsui Monthly Precious Metals Report December 1998
Andy Smith, Principal Commodities Analyst

What is the chance of gold moving from cult to consensus between 1998 and 1999? Those who had been attributing gold’s lack of
volatility to its position as a ‘safe haven’ must now be wondering whether a ‘damp cave inhabited by a hermit’ would better capture
its atrophy in 1998. One contributor to Kitco’s Web discussion group for gold bugs ( see
bin/comments/gold/display_short.cgi ) recently summed up gold’s comedy of errors in 1998 thus:
‘Opinion:gold does best in periods of economic and political crisis
Event: a world crisis for over a year
Result: gold pretty much in a tight range between $290 and $300
Opinion: when the US bond market weakens, gold will rise
Event: US bond market weakens
Result: gold pretty much in a tight range between $290 and $300
Opinion: a strong yen is good for gold
Event: yen strengthens against the dollar about 20%
Result: gold pretty much in a tight range between $290 and $300
Opinion: lower interest rates will be good for gold
Event: Fed lowers interest rates 3 times
Result: gold pretty much in a tight range between $290 and $300’
Even un-serious money isn’t taking gold seriously. Or is it? Gold’s fringe performance has been enjoying a fanatical reception from
the wings of its loyal and long-suffering investment audience: coin buyers and call option buyers.

That from monthly commentary at Mitsui gold:

Requires Adobe Acrobat. The New York and London commentary
updates lease rates daily and contains a number of other numerical
PM relationships which may be of interest.

Date: Sat Dec 26 1998 12:45
Fred (To: Gollum ) ID#341234:
Thank you for the illustrated view of what is going on in the stock market. My opinion is that an across the board bear will begin on January 4, but I have found it difficult to predict the end of a mania.

To all on this site who make it educational and thought provoking, thank you for your posts. Please keep up the good work in 1999. ( Now, if they could just get that Prudent Bear site working... )

Date: Sat Dec 26 1998 12:28
John Disney (i LOVE FORWARD RATES ..) ID#24135:
for rhody ..
Sorry to be a nuisance .. the data on Kitco only
goes back to 1988 .. that was the time of the big
gold slide from almost 500 .. forward rates were
really HIGH when that series commences .. can we get
data from a prior period say 1986 through 1987 ..
I think interest rates had fallen very low in 1886
along with the gold price .. and a gold bull started
about then .. I wonder what the forward rate was
or IF leasing played a big role at that time..

Date: Sat Dec 26 1998 12:07
Speed (Lou_Jan) ID#29048:
If true, then the January Effect may be reversed. The market place may become a match between profit takers and the PPT. The only sure thing is that it won't be boring.

Date: Sat Dec 26 1998 12:05
Speed (Euro time table....) ID#29048:
December 21, 1998, 09:10 p.m.

Euro a closer look

· Euro nations: Austria, Belgium, Finland, France,Germany, Ireland, Italy, Luxembourg, the Netherlands, Spain and Portugal.

· Euro contenders: Britain, Denmark and Sweden are members of the European Union, but chose not to participate in the euro currency. Greece is also an EU member. It failed to qualify for the euro, but is expected to join Euroland in 2002. Cyprus and five former communist countries -- Poland, the Czech Republic, Hungary, Estonia and Slovenia -- are expected to join the EU next year. Their admission could further expand Euroland's size and influence.

· Euro schedule: Dec. 31, 1998: The precise value of the euro is locked in and no longer floats relative to national currencies. Expected value: about 2 deutsche marks, 6.50 French francs or 1,950 Italian lire.

Jan. 1, 1999: The European Central Bank takes over monetary policy. Euroland's public debts are transformed into euros.

Jan. 4, 1999: Banks, stock exchanges and many businesses begin to conduct cashless transactions in euros. Retailers post dual prices. National currencies remain the only form of cash. The euro becomes a sort-of ghost currency -- visible only on bank statements and balance sheets.

Jan. 1, 2002: Euro coins and bills enter circulation. June 30, 2002: The euro replaces national currencies, which must be removed from circulation. In Germany, 260 billion marks ( worth $162.5 billion ) are turned into heating briquettes.

-- Knight Ridder Tribune News

Date: Sat Dec 26 1998 11:59
Lou_Jan (Well Duhh....) ID#320136:
Major downturn in January? Deferred tax break.

Date: Sat Dec 26 1998 11:26
Cage Rattler (Y2K and South Africa) ID#33182:
Main story in Dec 24 of major local newspaper in Cape Town. It was mentioned by the national Y2K Decision Support Centre that they believed that South Africa was 25% ready and is expected to be 70% ready by the end of next year. It was also stated that they would like to see South Africa 85% ready to prevent some disruptions to the economy such as local disruptions of electricity.

By the way, South Africa is commonly believed to be in the top 5 countries in the world in terms of Y2K preparedness.

Date: Sat Dec 26 1998 11:17
Donald (Picture grim for Russian agriculture but Russians will not starve.) ID#26793:

Date: Sat Dec 26 1998 11:15
Selby (Third attempt to post this) ID#286230:
rhody--cold where you are? Thanks for the leasing discussion. I think I may understand it now. Where do you get the numbers you use for the forward leasing rates re: the 2.25%?

Date: Sat Dec 26 1998 11:08
Goldteck (Polarbear(RANGY minority shareholders)) ID#431200:
Copyright © 1998 Goldteck/Kitco Inc. All rights reserved
I think that Rangy management does not care about Rangy shareholders that's why the stock is so depressed.Rangy is just a tool for them to transfer money .I hope I am wrong.Polarbear I would appreciate to know your opinion .Congratulations for your excellent site on Rangy
RANGY ( minority shareholders )
As of march -31-1998 ( Before reverse split ) 1709 individuals shareholders owned 1,234,945 shares or 2.98% of the issued shares ( TOTAL SHARES41,374,000 ) .Now I understand why RANGY management did not feel obliged to communicate with ADR shareholders when the reverse split occured a few months ago. From Silicon Investor Board
To: POLARBEAR ( 197 )
From: Ram Rao Saturday, Dec 26 1998 3:54AM ET
Reply # of 198 PB, Something has been puzzling me for a while. RANGY is supposed to be a holding company with minimal expenses. Yet they have been liquidating millions of dollars worth of their Harmony and DROOY holdings with the proceeds disappearing into some kind of blackhole.

Date: Sat Dec 26 1998 10:58
Donald (Trading software system produced gain of 2,041% in 1998) ID#26793:

Date: Sat Dec 26 1998 10:53
Gollum (The hoopla begins as big money starts to drum up buyers) ID#43349:

Date: Sat Dec 26 1998 10:32
Gollum (A Study in Scarlet) ID#43349:
Copyright © 1998 Gollum/Kitco Inc. All rights reserved
The Dow Jones Industrial average has not only recovered from it's early autumn lows, and even for a while in late November surpassed it's July highs.

To some this is a bullish sign,

but a more carefull analysis reveals that all is not as it seems. The rise in overall prices has been much influenced by the inflation of computer/internet technology stocks. Indeed there has been a surge as the tax strategey season has approached. No one wants to take their profits and have to pay gains if they can wait a few more weeks or days and not have pay untill Y2K.

Meanwhile, due to the rapidly deteriorating global economic situation, as well as tax write off considerations,commodity prices have tumbled while inventories build and forward sold production continues to flood the markets with excess inventories.

Indeed if we look at a broader based chart of the markets we get a clearer view of the actual situation.

It might be noted that this chart, while not quite so dramatic does look suspiciously like certain configurations seen in the past.

Today, of course conditions are somewhat different than in 1929, but not all that much. The markets today are highly influenced by the mutual funds and the inflow of money from retirement accounts. Fund managers, even while themselves at time selling from their personal accounts in anticipation of market down turns, have to keep these funds invested. During the current situation they are putting funds mainly in high cap defensive issue which further distort the indices. Many of them looking for year-end performance are also taking their chances with the tulip mania internet issues while hoping to get their profits out after the beginning of the year.

But the funds, having put thier bets on the high flying expensive issues, have just about used up all their dry powder, and will not be as significant a factor as we begin the new year.

I could go on and discuss how foreign flight money and various carry trades had created a credit bubble which further inflated equity prices in certain sectors, but we can already see that the current market has just about run out of steam. An examination of broad based indicators show that we are on the verge of significant decline.

Note, how each succesive instance of negative sentiment has had a more dramatic impact on price levels, and how with the latest cycle, tax season highs have failed not only to regain mid year highs but have not even regained year ago lows.

Becuase of the commodity situation and the timing of market events, the precious metals have reached a point where they are ready to once again move up, just as the money is retreating from stocks, bonds and the US dollar during the Senate trials

The gutters of Wal street will soon flow with red ink.

Date: Sat Dec 26 1998 10:19
gwyz (I am not worried...) ID#432130:
...about my PM investments. I have no doubts that 1999 is the year.

And a Very Happy New Year to everyone here at Kitco. ( And as always: Thank you Bart : )


Date: Sat Dec 26 1998 10:10
John Disney (forward rate ..) ID#24135:
Copyright © 1998 John Disney/Kitco Inc. All rights reserved
for rhody ..
I believe that you have explained that the forward
rate is the short term interest rate minus the lease
rate .. is that not right
If that IS right then we are in the same place ..
the independent variable is the forward rate ..
or the difference between interest rate and lease
so either a rise in lease rate OR a decline in
short interest rate ( annual ) causes gold to rise.
There should be a lag. My genetic advisor pointed
me to a site that plotted gold price volatility vs
lease rate volatility .. the correlation was obviously
strong but lagged by 6 months or more.

Date: Sat Dec 26 1998 10:01
Psilver Psyched (rhody) ID#216217:
Copyright © 1998 Psilver Psyched/Kitco Inc. All rights reserved
Thanks for the reply. We will anxiously await the day. I must admit that
I will be watching very closely for subtle changes in the market and spin after the Euro is launched. If many of the Kitco theories are correct we should be able to detect a change. I do not expect it to be too big, too fast as this would even be resisted by the ECU. I recognize that the fundamentals of the gold and silver market are quite different but I think gold must also be set free for silver to shine its brightest.

Some have indicated recently that it was the American market that was holding gold down as the European CBers were out of market in December. The Swiss sale story has been carted out again - this is not American induced. Furthermore, there has been some legislative action on the part of the Swiss to move toward the selling of gold. While words can be easily used to misinform, actions speak louder than words as they say. I guess I am remain cautious of the several 800 lb gorillas until I feel the slightest change in the breeze caused by the Euro.

Date: Sat Dec 26 1998 09:55
panda (Now we're really in trouble, the U.S. is supposed to save the rest of the world?) ID#14785:

Date: Sat Dec 26 1998 09:43
rhody (@ Psilver Psyched: The case for a shrinking of the supply) ID#411440:
Copyright © 1998 rhody/Kitco Inc. All rights reserved
deficit for silver is difficult to make. Eighty percent of the
new mine supply of silver comes from base metal mines. Base metal
mines have been hard hit my deflation. The question becomes, in
a deflation, will base metal mine closures occur faster than the
shrinkage of demamd for silver products?

Make no mistake, in market economies where the leasing perverion
is allowed, the price can only decline. This means we are in
the wrong sector of the marketplace. Leasing destroys markets
by creating the illusion of oversupply, constant, unrelenting.
When suppliers finally understand that the market is lease rigged,
they will get out of the game one way or another, and we have
market collapse. Frankly, I wonder if the leasing scam has
been extended to other commodities as well. That would explain
the general deflation sweeping the world. Best wishes in the
new year, when this situation will blow up one way or another.

P.S. The chap to ask about silver supply/demamd fundamentals is

Date: Sat Dec 26 1998 09:35
Gazebo (The gold game......) ID#432298:
It is quite obvious what will transpire in '99 regarding keeping the POG down. Central Banks will just sell more of their reserves, and to whom? to other Central Banks, hence the paper shuffel thus keeping the POG of gold down ( at bay ) . Traders don't look at who is buying they only look at the fact that there is selling, as '98 has proven.

Date: Sat Dec 26 1998 09:24
Psilver Psyched (rhody) ID#216217:
Always enjoy your focussed analysis. We will all keep our eye on the forward rates. I can't convince myself however that silver was in supply deficit during most of 1998. In 1997 yes, but I think demand changed with world situation. I can't find any evidence of supply deficiency for last 9 months. Hope it returns soon. Best of luck and prosperity in the new year.

Date: Sat Dec 26 1998 09:18
Donald (The average age of the top derivative trading team for 1998 is 26) ID#26793:

Date: Sat Dec 26 1998 09:12
rhody (Silver Lease Rates: I have been doing some research ) ID#411440:
Copyright © 1998 rhody/Kitco Inc. All rights reserved
on silver and gold lease rates. I have become convinced that
the threshold for economical operation of the gold ( and by proxy )
the silver carry is a forward rate of 2.25% That is, when
lease rates rise, or short term interest rates in the form
of one month T-bills fall this puts the squeeze on forward rates
which represent the profit margin for the metal carry scam.

In 1998, there have been no instances when forward rates for
either gold or silver were at or under 2.25%. In 1997, there
were 16 instances when forward rates for SILVER were under the
2.25% threshold. In every case except one, the POS spiked
within a day or two of the drop in forward rates. The greatest
activity was the Buffett inspired silver spike of December 1997,
when forward rates actually turned negative, as one month leases
for silver rose to 7.5% and forward rates bottomed at -1.50%
During this 12 day period the POS rose 1$ per oz ( about a 20%
rise ) .

CONCLUSION: The gold and silver carry is the primary depressant
on the POS and POG, as financials lease and cash out metal converting
it to paper assets. This liquidation of physical assets
according to my charts, ceases at forward rates of 2.25% or
thereabouts. This suggests that the costs of the pm carry
operation is about 2.25% of the forward rates, and if a combination
of rising lease rates and/or dropping short term interest rates
squeeze the forward rate below 2.25%, then the pm carry trade will
cease. Then supply and demand fundamentals will come into
play. We are in a 500 ton per year deficit of supply over
demand in gold, and the shortfall is even higher in percentage
terms for silver ( about 30% shortfall ) . If the pm carry ceases
for any period longer than a day or two, then the fundamentals
kick in, we have a real market, and the short covering should begin.

Here is where the speculation comes in. I think the ECB will
either buy gold, cease leasing, or raise lease rates arbitrarily
in 1999, to assist the entry of the EURO dollar. Actually, all
they really have to do is cease leasing, and the sudden withdrawl
of liquidity will force pm borrowers to lease from a shrinking
number of CBs, who because of a spike in leasing demand will
raise rates. GOLD/SILVER BULL. The thing we have to remember
is that continued leasing is essential to oversupply the spot
market in pms to keep the POPMs down. Leasing must go on or
pms will spike, and that unwinds the short overhang. And AG
can't raise short term rates to reliquify the pm carry without
pricking the paper asset bubble. So sometime in 1999, the
pm carry will cease. The question then will be is deflation
strong enough to quench a pm spike?

Date: Sat Dec 26 1998 08:21
sharefin (When the chips are down - Asia to be hit hard again?) ID#284255:

Date: Sat Dec 26 1998 08:13
sharefin (Slowly opening my eyes) ID#284255:
MERRY CHRISTMAS to one and all.

Thanks Bart.


As Ancient Pan Did Sing

Come drink the flowing cup that pours
From the rich earth and sky
The full rich wine of life, until
Our moment passes by

And everything about us be
Poured into lifes rich cup
Till every sense and every mood
Of soul be lifted up

Toast with the richest wine the faith
That binds men to the truth
Drink deep to the eyes and ruby lips
The loyalties of youth

And fill a pot with that rich wine
The fruitfulness of earth
And toast with awe the harvest yield
The mystery of birth

Come, drink -- until the senses glow
With peace and genial mirth
And praise with love the Unknown One
Who made the fruitful earth

Date: Sat Dec 26 1998 07:49
Donald (Huh? IMF says no one could have forseen the recent financial system problems.) ID#26793:

Date: Sat Dec 26 1998 07:40
Donald (Cameroon narrowly edges out Paraguay to win Most Corrupt Nation title.) ID#26793:

Date: Sat Dec 26 1998 07:34
Donald (Failure of Chicago derivative trading firm blamed on rogue trader) ID#26793:

Date: Sat Dec 26 1998 07:28
Donald (Japanese building firm lost 10.3 billion yen trading derivatives) ID#26793:

Date: Sat Dec 26 1998 07:17
Donald (New York banks shift vast sums into Britain to cover London trading losses) ID#26793:

Date: Sat Dec 26 1998 07:00
PCM (Gold and Precious Metals' Investing 101, (A&B)) ID#169332:
Copyright © 1998 PCM/Kitco Inc. All rights reserved
Gold and Precious Metals' Investing 101, ( A&B ) .

A. Jay Taylor's portfolio strategy ( excerpted on golden eagle / Editorials section ) is good basic reading for those who may be new to gold investing; and generally interesting for everyone. It's taken from Gold Resource & Environmental Stocks,,14 December 1998

B. The following is from S&P's website:

Gold & Precious Metals Mining
Year to date through December 11, 1998, the S&P Gold Index fell 9.1%, versus a 20.2% gain in the 1500. Gold and gold mining shares have been in a downtrend since 1996. Gold prices fell 21.5% in 1997 and hit an 18-year low in January 1998. In 1997, gold stocks fell 34.7% while the S&P 1500 gained 30.7%. However, we believe that the worst of the decline is over and our investment outlook for 1999 is positive. We expect the group to trend higher in 1999.
There are several reasons why we are positive on precious metals stocks. First, we expect to see much less central bank selling in 1999 following the introduction of the new European currency. Central bank sales by European nations have severely depressed gold prices over the past several years. Less selling will ease the downward pressure on gold.
Second, U.S. equity markets and equity markets worldwide will offer less competition for investment demand. Double-digit rates of return for equities from 1995 through 1997 have provided immense competition for gold. So far in 1998 equity markets in the U.S. and abroad are in positive territory as of early December but have been extremely erratic. We expect that for 1999, returns on equity instruments will return to the historical averages. Stock market returns in 1999 will probably decline from 1998.
Third, besides less competition from stock markets, gold and silver may regain some of their appeal as hedging instruments. Since the 1970s, financial futures and options have largely diminished the traditional role of gold and silver as hedges against inflation and the general risk of falling asset prices. Consequently, the metals failed to move higher in response to such destabilizing events as the Gulf War in 1990, the Mexican Peso decline in 1994, the Asian currency meltdown in 1997, and the Russian debt default in 1998. However, with several countries now imposing capital controls to protect their currencies, future and options will not work as well as they did in the past. Accordingly, we expect to see a shift into precious metals as a way to hedge against declining currencies. We believe that the widespread collapse in currency values in 1997 and 1998, coupled with the growing threat of debt defaults, will improve investor attitudes towards gold and silver.

Date: Sat Dec 26 1998 05:30
POLARBEAR (Ho Ho ) ID#183109:


Date: Sat Dec 26 1998 01:15
RJ (..... Ho Ho .....) ID#411259:



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