KITCO GOLD FORUM
1997-1999

index
Date: Mon Aug 24 1998 23:52
Rumpled (ON AMERICA) ID#411233:
If SLICK WILLIE isn't run out of town by an angry mob, calling for his head, and very soon, then I think the rest of the world is going to lose
what little respect they had left for America. I refuse to believe that the
majority of Americans still support this weasel. The polls have got to be
another fabrication.

Date: Mon Aug 24 1998 23:21
Rumpled (@Farfel) ID#411233:
I sure as hell hope your right! I'm a gambler, it's the only vice I have left,
since I gave up the sauce 6 years ago. At present I have about 80K in
TVX stock, avg out to $3.60 a share CDN. This is play money, so I can
wait it out. I believe that within a year, perhaps even less, that I will at
the very least double my money. Hey, Such Are The Thoughts.

Date: Mon Aug 24 1998 23:10
Max__A (Farfel) ID#173148:
Copyright © 1998 Max__A/Kitco Inc. All rights reserved
Sometimes you make sense and then suddenly you lapse into a fearful illogical state. The following earlier quote of yours today speaks of a panicky environment. If there is any panic today, its that a gold retailer may refuse to buy gold ( at the rate things are going ) ! You are aware for example that the decline in gold stocks has exceeded the general market decline of the past few weeks? Are you suggesting that this could reverse tomorrow or next week or next month? What sudden event could make it possible that I wouldn't have time to buy back in?

I expect it will become readily apparent that, relative to the ensuing
demand, there is absolutely NO abundance of gold and gold coinage in the land. Moreover, I can assure you that a gold retailer WILL NOT take your check and make gold available to you in such a panicky environment. No way! You better have a lot of cash on hand and a good relationship established with a gold outlet. At the same time, Gold stocks may slingshot upward with such force ( given the relatively tiny size of the entire investment sector ) that you might have to pay several hundreds percent more for a viable gold stock than what you would pay for it today. In other words, the aggregate demand should far outweigh the suppply.

Date: Mon Aug 24 1998 21:30
farfel (@RUMPLED....responses...) ID#17077:
Copyright © 1998 farfel/Kitco Inc. All rights reserved
Date: Mon Aug 24 1998 19:57
Rumpled ( DA GOLDEN ) ID#411233:
Copyright 1998 Rumpled/Kitco Inc. All rights reserved
1.--Gold is dead, and there isn't going to be a resurrection.

( As long as my wife lusts for gold and diamond bracelets, gold & diamond earrings, gold and diamond pendants, etc., then I KNOW gold is NOT dead. Not now nor ever ) .

2.--The stock market is not going to crash, corrections on the way up are normal.

( This stock market has been in a state of de facto verticality for the past two years. Since it effectively missed two years worth of normal corrections, then the next notable correction will be the equivalent of a crash )

3.--Little Joe is not going to make large mutual fund redemptions, come hell or high water.

( Based upon the past three years, Little Joe does NOT know what it is like to lose money in the general equities markets. Meanwhile, Little Joe's lifestyle has appreciated considerably over this time. Moreover, he's been encouraged by various financial institutions to borrow to the hilt, leveraging his home and his credit card balances. He's bought himself some new cars, an expensive house in the swank part of town, and a little vacation home by the beach. Once Little Joe starts to see his Net Worth drop around 20% by Fall, then he is going to panic. Little Joe then becomes Little Jitters. The Mutual Funds phone lines will become one long busy signal. No if, buts, or maybes ) .

4.-- Any scared money leaving the markets, is going into bonds, and if they fall out of favor, back into GIC'S or term deposits.

( The bonds bubble is actually far worse than the equities bubble at this point in time. Bonds have assumed their own unique mode of verticality.
One little interest hike and the bonds bubble will burst so fast it will make your head spin. An interest rate hike will probably arise if the US government is compelled to defend the Dollar. The Dollar will likely require defending if there arises a crisis of confidence in the American government ( which is slowly developing thanks to Prez Hardon ) .

5.--Little Joe would sooner keep his money in his pillow, than to invest in PM'S.

( Interestingly, Little Joe is not unaware of PM's and their existence. He hears about them all the time. However, his experience with them over the past decade has been negative. Moreover, his fund manager ( who he regards as a genius ) has warned him to stay away from that crap! His fund manager has advised him that, if he is feeling nervous about the market, then he should stick his monies in the major Dow stocks ( Coke, Disney, Walmart, etc. Or his fund manager has extolled the virtues of Bonds and Utes. Again, if there is any reason for interest rates to spike up suddenly, then all these over-inflated assets will drop like rocks. Suddenly, Mr. Fund Manager will not look so smart. Disgruntled, Little Joe will rush to those investments his Fund Manager once so defamed and disparaged. It is the inevitable rebellion of the disillusioned faithful ) .

6.--Business as usual, Jan 1--2000.

( In Your Dreams ) .

7.--People should not exceed the daily recommended dose, when taking strong cold medication.

( People should also not fall in love with any trend and expect it to continue ad infinitum ) .

8.--And finally from Dylan ( Bob ) --When they asked him why it had to be that way, well he answered JUST BECAUSE.

( And as John Cougar Mellencamp once said, And the walls come tumbling down...and the walls come tumbling down.... )

THANK YOU.

( Thanks.

F* )

Date: Mon Aug 24 1998 19:57
Rumpled (DA GOLDEN) ID#411233:
Copyright © 1998 Rumpled/Kitco Inc. All rights reserved
1.--Gold is dead, and there isn't going to be a resurrection.
2.--The stock market is not going to crash, corrections on the way up are normal.
3.--Little Joe is not going to make large mutual fund redemptions, come
hell or high water.
4.-- Any scared money leaving the markets, is going into bonds, and if
they fall out of favor, back into GIC'S or term deposits.
5.--Little Joe would sooner keep his money in his pillow, than to invest in
PM'S.
6.--Business as usual, Jan 1--2000.
7.--People should not exceed the daily recommended dose, when taking
strong cold medication.
8.--And finally from Dylan ( Bob ) --When they asked him why it had to be that way, well he answered JUST BECAUSE.

THANK YOU.

Date: Mon Aug 24 1998 18:32
farfel (@RUSSELL...responses to your previous post...) ID#17077:
Copyright © 1998 farfel/Kitco Inc. All rights reserved
Date: Mon Aug 24 1998 14:30
russell__A ( Farfel - Hedge ) ID#370144:
Copyright 1998 russell__A/Kitco Inc. All rights reserved
I agree that gold is a hedge - but from what? Certainly a way to escape from a revolution or a court order or a pogrom with some of ones assets.

( No argument there ) .

Historically, it also has proven to be a hedge against inflation and also deflation of locally held currency.

( Historically, you may note that one of gold's main benefits is protection against global currency risk, with or without inflation )


What it is clearly shown lately however, is that it is not a general safe-haven anymore for ones assets.

( Actually, it has been a terrific safe haven for foreigner's assets...just ask the Koreans, Thai, Indonesians, Russians, etc. whether or not, if they could go back in time,they would choose converting all their assets to gold or to their respective native currencies? I am categorically certain they would choose conversion to GOLD ) .

The dollar is and will continue to be, as long as the dollar is strong relative to other currencies.

( No argument there...but with emphasis on your statement, AS LONG AS THE DOLLAR IS STRONG RELATIVE TO OTHER CURRENCIES. ) .

In these particular times for Americans, gold is a dubious hedge, a failure as a safe-haven and finally a disasterous as an investment.

( No argument there...but with emphasis on your preposition, IN THESE PARTICULAR TIMES ( in which a corrupt American government has intervened in the financial markets regularly in order to create hyper-bubbles in the equities, bonds, and currency markets ) .

When either inflation or a relatively weaker dollar appears, there will be plenty of time to shift into gold investments from a low level.

( Actually, Russell, I have argued numerous times that I believe we will see stagflation before we ever see a pure inflation or a pure deflation. I am certainly not alone in that prognostication. Stagflation is a pretty tricky economic phenomenon...hard to recognize at first glance. That is why Greenspan agonizes over the proper direction to take with respect to interest rate adjustments. He knows better than anyone that neither direction is a panacea to the developing American economic predicament. When stagflation appears, we can expect that the ONLY safe haven in America will be precious metals or maybe NON-mortgaged real estate. Period. Once the realization strikes Americans ( along with the resultant panic ) , I expect it will become readily apparent that, relative to the ensuing demand, there is absolutely NO abundance of gold and gold coinage in the land. Moreover, I can assure you that a gold retailer WILL NOT take your check and make gold available to you in such a panicky environment. No way! You better have a lot of cash on hand and a good relationship established with a gold outlet. At the same time, Gold stocks may slingshot upward with such force ( given the relatively tiny size of the entire investment sector ) that you might have to pay several hundreds percent more for a viable gold stock than what you would pay for it today. In other words, the aggregate demand should far outweigh the suppply ) .

Thanks.

F*

Date: Mon Aug 24 1998 14:30
russell__A (Farfel - Hedge) ID#370144:
Copyright © 1998 russell__A/Kitco Inc. All rights reserved
I agree that gold is a hedge - but from what? Certainly a way to escape from a revolution or a court order or a pogrom with some of ones assets.

Historically, it also has proven to be a hedge against inflation and also deflation of locally held currency.

What it is clearly shown lately however, is that it is not a general safe-haven anymore for ones assets. The dollar is and will continue to be, as long as the dollar is strong relative to other currencies.

In these particular times for Americans, gold is a dubious hedge, a failure as a safe-haven and finally a disasterous as an investment.

When either inflation or a relatively weaker dollar appears, there will be plenty of time to shift into gold investments from a low level.

Date: Mon Aug 24 1998 03:14
farfel (THE MEDIA SPIN ON GOLD IS CHANGING......) ID#17077:
Copyright © 1998 farfel/Kitco Inc. All rights reserved

August 23, 1998
NEW YORK TIMES

Gold: A Hedge That's Worth Its Weight in History

By ERIC HUBLER

A bit over four years ago, an aging German Jew who has seen a lot of trouble gave his niece a wedding gift of three gold coins, along with this admonition: May you never have to use them.

Let's hope not. Those coins, slumbering in a bank vault, have declined 26 percent in dollar terms. Blue-chip stocks, meanwhile, and, some real estate have more than doubled.

What kind of hedge is that -- a hedge against getting rich? Is gold, the traditional talisman against everything from tyrants to inflation to stock market plunges, losing out?

No, says DOUGLAS M. COHEN, an analyst for Morgan Stanley Dean Witter -- but you could be forgiven for thinking so. History is full of episodes where people have said gold is dead, and sure enough, it's tended to rally back very strongly, he said. Gold has thousands of years of history on its side.

What's scary now is that, at about $289 an ounce, gold is not far from its production cost of $250 to $260 an ounce, though it is up from January's 18-year low of $278.

Indeed, gold has quite a roll call of negatives. Start with currencies: Because gold is denominated in American dollars, which are currently strong, it is less affordable than it once was in traditionally gold-hungry markets like India.

But even with demand down, production has been rising in Australia, Canada and South Africa, and there are fears of more gold coming to market, perhaps from the Russian central bank or the International Monetary Fund seeking to raise cash during Russia's fiscal crisis.

What is bad for gold has been even worse for gold shares. Gold has fallen less than 2 percent in 1998, but Morningstar Inc., the Chicago mutual fund publisher, says the average precious-metals fund fell 21.8 percent this year through last Monday and 43.5 percent in the last year.

But Harry Bingham, who manages two gold funds for Van Eck, says gold is as important as ever. Gold is the only money, he said. You might say silver is money, but that's only pocket change. And everything else we call money is really a credit instrument.

After the 1929 market crash, when stocks declined 90 percent, gold rose 70 percent, and the shares of gold producers like Homestake Mining catapulted 700 to 800 percent. Talk about a diversifier: Ten percent in that would have salvaged the whole portfolio, Bingham said.

We're seeing some paper money just evaporate today, he said, citing the Indonesian rupiah and the South Korean won. So I think we're probably fairly close to a turning point in the perception of the value of gold versus paper money.

Daniel B. Leonard, manager of the Invesco Strategic Gold Portfolio fund, said: If you were in the yen and bought gold a couple of years ago, you're looking pretty good now. The same goes, he says, for people who have to put food on the table with rubles or yuan or Canadian dollars.

In the United States, gold investors typically buy shares in either gold mutual funds or mining companies, rather than the metal itself.

Bill Martin, manager of the American Century Global Gold fund, favors Barrick Resources, which has reduced costs to $150 an ounce at a new mine in Peru and has sold its production forward for $400 an ounce for three years.

Leo Larkin, a metals analyst at Standard & Poor's, mentions Newmont Mining, Placer Dome and Barrick as low-cost producers.

The woman with the wise uncle, meanwhile, reports that those three nuptial coins are staying right where they are.

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