away...to eat and slober on the couch for a while

Éß

away..to bide my time playing the markets ;- )

ÉßryantParkbound

Date: Thu Dec 04 1997 18:51

LGB2__A ( @ Gold may stop it's slide at $280 ) ID#315256:

OK folks, I did mention to you a few days ago ( and week ago and weeks ago and

months ago ) that Gold & Gold shares had a lot further to fall, BUT I do believe that

stabilization at it's support point of $280 is at hand. A few more days of down, a

flattening...and we'll hover around $280 for awhile. As GSC was so fond of saying I

think this is the final washout...

I could be wrong, but battin 800 or so to date eh? ( Buy SSC/SSRIF, today is a

BUY opportunity!!!!! )

I'm just a bit curious.....cause I'm curious......uh huh...

away...to ponder 800%

Éßullshi ( r ) t

the last sentence need not be stated again......but I will in case some ( goldbug ) one missed it

The slathering

demi-gods, fearing I have discovered their nefarious plans, descend with flashing

claws and dripping fangs, in a vain attempt to capture the words before they escape;

there is a down from here.

Bag 'em and stack 'em.........

away...to be among good company

Éßexhuberant...uh huh...

btw....... he said, there is a down from here.

Those of you who read my posts will recall my suppositions about Bundesbank selling gold this year. I reported a few months ago a 200 + metric ton sale to be announced before the end of the year. Today we find the Germans have become lessors of gold.

A tricky business, this. Apparent activities by certain agents who have been associated with central bank sales in the past can be identical whether the agents are selling or leasing. I feel pretty good about my scoop on this story but saddened that I covered so much of my gold shorts at 305 - 308. Dow back above 8K, gold a wilted flower, seems the year is ending pretty much the way I said it would way back in June

I'm still buying platinum, seems a simple call; I would buy platinum at these levels in a normal market. Imminent interruptions in supply will make the platinum play the star in the months to come.

For the many people who have e-mailed me, please do not feel slighted, I have had little time to respond. Please accept my thanks for your encouraging words and I will try to post occasionally now that this forum has settled down a bit.

It seems as if the psychological luster of gold faded for our time. Exuberant Equities, Zero Inflation, Everybody is Working. The standard of living has risen throughout the world. Some older cultures still covet and revere gold, but these buyers alone cannot cause more than an insignificant rally, or even begin to stem the tide of deserters on this golden shore. The Central Bankers have been holed up on the roof for more than a year, overlooking havoc wrought with barely controlled glee. The lines of communication snapped this summer and all messages have since been passed by means of a few pieces of tattered semaphore flags. I’m beginning to get the feel of those flags. I'm starting to catch the cadence; they don't just hold them, they whip them around and strike up all sorts of poses. One must pick through the not always obvious misinformation to find the truth lying underneath. Gathering intelligence this way is a dangerous, cold, and windy job and I think they are on to me. I knew I should have spent more time practicing with those damned flags! The slathering demi-gods, fearing I have discovered their nefarious plans, descend with flashing claws and dripping fangs, in a vain attempt to capture the words before they escape; there is a down from here.

My aim was to find out more about their B prefered shares and I was indeed suprised. Most of you may know that these shares ( needless to say at a 52 week low ) offer a yield paid quarterly of about 4.88% and are convertable in the year 2003 to dollars in the equivalent of 1/10 oz. of fine gold.The fortunate point here is that even if we find ourselves ( Americans ) with a devalued dollar by that date, for whatever the reason, you will be paid in the apropriate sum of devalued bucks as gold stands alone unaffected. With gold lets say staying even all those years up to 03 and the dollar dropong say, 20%, you would be 36 dollars insted of just 30, thus avoiding what at least I precieve as an unavoidable, eventual downturn in the value of the dollar.

Meanwhile, you can participate in the appreciation of the shares and actually have income, as well as a choice of selling at your discreation or eventual redemption. The dividend, if you wish to call it that, is figured against the price of gold as well whereas the last five days of trading's gold price monthly isused in the calculation. Tomorrow I'll bring home my notes and spell it out for anyone who requests said particulars.

Lastly there was talk yesterday of who's the lowest of the gold producers and I put that very question to my contact. He said that it depends on how you approach the question; If Cu is your main product, then cost is about .82 cents a pound and the gold is free; a bypoduct of Cu mining. If you call us gold miners, then we produce at about 172$ per oz. and copper drops an appropriate number as well, like I said; I need my notes.

Every boy and girl you meet,

Is dancing to the limbo beat.

Gold's going down,down they say,

Won't be back for a nother day.

But if you like history,

Then join in and dance with with me.

Move the bar all around,

Till de bottum,she be found.

Don’t forget the communications systems. Even the routers and hubs sold in the early 1990’s will require replacement or software patches which haven’t been written by the suppliers yet. If the Financial systems were fixed in time, it wouldn’t do anyone any good if their PC’s and terminals couldn’t connect.

TRY THIS: If you work in an office building, ask someone if your telephone system is Year 2000 compliant. More specifically, ask them if they have checked with the manufacturer to ensure that your “PBX hardware” is okay. Chances are that everyone will say “Huh? What’s that?”, or “We don’t have to worry about that...”.

IF ANYONE KNOWS OF ANY COMPANY that says their financial systems are currently ready for the year 2000, PLEASE post the company’s name and address here.

Don’t forget the communications systems. Even the routers and hubs sold in the early 1990’s will require replacement or software patches which haven’t been written by the suppliers yet. If the Financial systems were fixed in time, it wouldn’t do anyone any good if their PC’s and terminals couldn’t connect.

TRY THIS: If you work in an office building, ask someone if your telephone system is Year 2000 compliant. More specifically, ask them if they have checked with the manufacturer to ensure that your “PBX hardware” is okay. Chances are that everyone will say “Huh? What’s that?”, or “We don’t have to worry about that...”.

IF ANYONE KNOWS OF ANY COMPANY that says their financial systems are currently ready for the year 2000, PLEASE post the company’s name and address here.

Don't think so? Better take a look at the trading volume on the NYSE next time there's a Hebrew Holiday.

So touchy!

However, I know this site ( and gold bugs in general ) tends to see the turning points months or years before they arrive. The sequence may not be an instant inferno where all paper assets are consumed. In fact the debt collapse with bank failures could occur months or years after the stock market collapse ( ie market 1929 banks 1932 or 1933 ) . My guess is that there is going to be a period of instability in the dollar when it will drop, and the price of gold will skyrocket. Wouldn't it be worthwhile to invest a portion of one's money in gold stocks and try to ride the Tsunami?

I will give the physical analogy -- the US economy and dollar financial system are like a huge fluid system with finite viscosity. There will be a period of time when the distortion of the system is still coherent and non-turbulent before the instabilities arise, and everything disappears in the deadly froth.

I do agree that the safest time to invest in gold is after the Tsunami hits the beach, but a nimble investor still might make a large profit with some percentage of his portfolio before the big event ( just as some shrewd investors did in gold stocks in 1987 ) .

I think it will go something like this: Foreign investors start bailing out of dollars, and the dollar drops 10% or so in two days. The markets at that time are stable, or dropping relatively slowly. The smart money has been buying gold and gold stocks, for about a month, with stellar profits. The stock market continues in a relatively stable fashion for approximately one to two more months, with the dollar dropping in a relatively stable fashion. Then-- the market finally crashes, taking all paper assets down with it -- including gold stocks.

I am not suggesting that everyone will want to ride the gold stock Tsunami -- but I might try a small percentage of my assets -- could double my stake in 2 months, and lose most of it in 2 months and one day if I fail to bail out at the right moment!

I think RJ would not hesitate --- the Tsunami gold surfers ride of a lifetime! I wonder what the beach looks like 400 feet up!

U.S. M-2 money supply rose $6.5 bln in Nov 24 week

NEW YORK, Dec 4 ( Reuters ) - U.S. M-2 money supply rose $6.5 billion in the November 24 week to $4,000.3 billion, the

Federal Reserve said.

The broader M-3 measure rose $15.4 billion to $5,306.0 billion. M-1 was up $4.8 billion to $1,061.7 billion, the Fed said.

The Fed said the four-week moving average of M-2 was $3,992.5 billion versus $3,986.6 billion in the previous week.

http://biz.yahoo.com/finance/971204/u_s_m_2_money_supply_1.html

Stocks will outperform RSA stocks at low gold prices )

Suggest you look at p/e ratios of stocks like ABX

before you start singing praises of their hedging

program and finds in the Andes. Before their latest

results and at a higher gold price their p/e was 60.

Now since they ARE LOSING MONEY at a higher gold price

despite hedging and much vaunted low costs. Their p/e

is infinite. Their price can drop a lot faster than you

think. Newmont and Homestake also have abnormal p/e.

Compare that with Vaal Reefs - a p/e of less than 13.

Of the north American majors - Franco Nevada looks

pretty secure, the rest are very vulnerable.

The Aussies are hard to assess as they are really

well hedged and their currency has slipped - this will

help them.

On gold, I said a few weeks ago that a break of 57.5

on the gold/silver ratio would be painful - It has been

and we are now at 54. Dont worry yet - the platinum ratio

may save us - first stop - 0.73 oz plat/per oz gold

or about 280 - next stop .69 oz per oz or 265. Lets

not break that one or we go into the twilight zone -

Fun play and very safe - take puts on Barrick and

buy calls on ASA.

No longer believe RSA mines will be rerated upwards.

Now believe North American mines will be rerated downwards

because of their historically nutty high p/e ratios. ABX

seems to run on hype and promises - not bottom line

results

Donald - Any idea what the estimated cash in circulation would be with the new 50's now out?

Economics International said.

``It is very difficult to get gold into the boom market, as long as they ( market players ) viewed that all these central bank sales

will suppress it any time,'' he said.

Gold prices slipped further on Thursday to $289.85 per ounce at the London fixing, a fresh low since early/mid March 1985.

``The big spikes in gold always come when the currencies are undermined,'' he said.

What AG is going to do is to open the floodgates even more to prevent the deflation. What is he going to do to minimize the chance of inflating the market bubble even more? He can't raise rates!

Most of the mainframe Operating Systems currently being used are not Year 2000 compliant. The companies that write the Operating Systems have not yet issued compliant versions, and most will not make schedule commitments for issuing these versions. Therefore, any financial software that runs on these systems will have to be tested ( and likely fixed ) AFTER the Operating Systems are upgraded. The testing alone usually requires a few months. Absolutely no one can be certain that their software is compliant until it has been tested.

About half of all the manufacturing control systems that were sold last year were not Year 2000 compliant. Historically, these systems are installed and aren’t fixed until they break. Most of these will continue to function just fine, but a few will fail. Which ones? Every chip and every module of software would have to be evaluated.

Financial systems will be hit hardest, especially General Ledger software that companies usually don’t like to replace. Understandably, companies usually don’t like to fidget with the methods they use to calculate profits, income, and expenses.

In most companies, it comes down to politics. The Financial people have a system that is currently working, so they don’t see a problem. In a typical company, a small group of computer folks have been maintaining a mainframe accounting system for 10-20 years. These people may see the MAJOR PROBLEMS coming, but they would be out of work if the company re-wrote the software, or switched to a compliant version of PeopleSoft, SAP, BAAN, or one of the other financial systems ( completely different technology! ) . Therefore, they are waiting.... and waiting....

Most of the mainframe Operating Systems currently being used are not Year 2000 compliant. The companies that write the Operating Systems have not yet issued compliant versions, and most will not make schedule commitments for issuing these versions. Therefore, any financial software that runs on these systems will have to be tested ( and likely fixed ) AFTER the Operating Systems are upgraded. The testing alone usually requires a few months. Absolutely no one can be certain that their software is compliant until it has been tested.

About half of all the manufacturing control systems that were sold last year were not Year 2000 compliant. Historically, these systems are installed and aren’t fixed until they break. Most of these will continue to function just fine, but a few will fail. Which ones? Every chip and every module of software would have to be evaluated.

Financial systems will be hit hardest, especially General Ledger software that companies usually don’t like to replace. Understandably, companies usually don’t like to fidget with the methods they use to calculate profits, income, and expenses.

In most companies, it comes down to politics. The Financial people have a system that is currently working, so they don’t see a problem. In a typical company, a small group of computer folks have been maintaining a mainframe accounting system for 10-20 years. These people may see the MAJOR PROBLEMS coming, but they would be out of work if the company re-wrote the software, or switched to a compliant version of PeopleSoft, SAP, BAAN, or one of the other financial systems ( completely different technology! ) . Therefore, they are waiting.... and waiting....

My personal expectation ( speaking as a professional software engineer who is not in the Y2K repair business ) is that humanity will be walking across a narrow bridge into the next century, and the Y2K problem may compound other difficulties in such a way as to create significant dislocation.

It is my own position that the result will be a skyrocketing in the price of gold and more so in gold stocks. A time of tremendous international insecurity, with just enough stability to allow continued trading in the equities markets, is the scenario I envision. I think $10000/oz gold is of course very unlikely but it is not impossible.

Concerning the 60-year depression economic cycle, the computerization of international economics, the IMF, and other factors have IMHO had the effect of tampering with the economic clock the way artificial hormones confuse a body's natural cycle. Sixty years may be a natural cycle time, but we live in such an unnatural era, I do not see how that could apply now.

People have been preaching doomsday, international unsettling, etc. for a long time, and have almost always been wrong. Nevertheless, how ironic if the race that has fought off and endured pestilence, plague, famine, genocidal tyrants and all the other forces that have sought its demise, is finally brought to its knees by the simple stroke of midnight that ushers in the year 2000 and cripples the magnificent computers that order our lives.

Some basic thoughts on gold for the novice:

http://www.best.com/~dolphin/Gold.html

It seems obvious to me, FWIW, that gold will sky rocket when it’s clear that major banks may have problems processing transactions over the date change. ( eg. Bank runs etc. ) Conclusion? Buy gold…and hang on to it for at least the next 758 days!

http://www.gold-eagle.com/gold_digest/milhouse1130.html

National Bank of Canada NA

Shares issued 168,307,543 Dec 3 close $22.95

Thu 4 Dec 97 In the News

The Financial Post reports in Bloomberg dispatch its Thursday edition that

National Bank of Canada is shutting its branch in Singapore because of

deteriorating business and heightened credit risk in southeast Asia. The

Singapore branch of the Montreal-based bank, which is Canada's

sixth-largest, and its Singapore-based merchant banking arm employ 15

people.

Ask the Nazis and Sveads,they had luck.

Since today you appear to show little grief,

May we put YOU in the company of these same thieves.

It's impressive how you've talked today,as your Son just passed away,

Is this what we are to expect,or a one time show of disrespect.

Being right is of course admired today,

For the wrong reasons lead many to their dismay.

The price of Gold notwithstanding,

To your son may we say..HAPPY LANDING!!

Just by extending massive loans to Asian Banks, the IMF IS NOT ADDRESSING THE ESSENCE OF THE PROBLEM: Which is simply that the borrowers cannot repay their debts! The borrowers bit off more than they can chew financially. It is equivalent to the hapless worker who earns only $1,000 per month, but who has found a aggressively imprudent bank which finances the purchase of a luxury home requiring $2,500 per month mortgage payments. After a short while the hapless worker uses up all his savings to make up the short-fall in monthly mortgage payments. His pleadings encourage a second bank to extend him another loan to pay the next three months mortgage. But alas, the hapless worker STILL ONLY EARNS $1,000 PER MONTH... etc etc until BOTH bank resources are depleted. The borrowers simply CANNOT PAY THEIR DEBTS!

It doesn't take a double Ph.D. in Mathematics AND Finance to understand the ludicrous folly of the Asian Banking Debacle looming on the horizon of the Land of the SETTING Sun... and the horiffic ramifications which inevitably will ensue.

This evening GOLD-EAGLE will be posting the LATEST analysis of the Asian Banking Domino Effect by John Kutyn - whose LAST essay was selected for the November HALL OF FAME:

http://www.gold-eagle.com/awards/spotlight.html

away...to work

ÉßßL

Go Gold!

Away...from losing

Éßwinninandlovin

You got a good attitude mate - Thanks for sharing - I feel better.

For Jack

Appreciate you warning on RSA Mines.

Lets look at some numbers - end of 2nd quarter 1997.

Following USA/Canadian companies making profits

at price of 325$/oz list gives company and annual

ounces.

amax - 443

homestake 1800

Newmont - 2930

Barrick - 3000

Cambior - 540

Franco - 1900 ( ? )

Prime - 390

Teck - 350

Grand total N. America = 11.3 mill

Note following in loss - battle,coeur,getchell,agnico,

echo,kinross,meridian,pegasus,placer,royal oak,

TVX, Williams.

Following for RSA same quarter same price gold

Anglo group - 7800

gencor group 1355

GFSA Group 2700

Randgold 950

Grand total 12.8 mill oz in the Black

Note following in loss - avgold,deelkraal,joel,

Randfontein,Western Areas, Blyvoor,DDeep.

Following for Australia same basis

acacia 325

aurora 190

aus resource 188

delta 226

grand central 436

newcrest 473

normandy 1975

plutonic 510

resolute 292

WMC 830

Grand total 5.5 mill oz in the black

Note following in loss - goldfields, kidston,gwalia

Will have numbers for 3rd quarter shortly - if you

are interested Ill update for you.

I only listed the mines covered by the Mining Journal.

Believe ALL the mines will be in trouble - not just

the ones in RSA - Never start believing your own

propaganda ( I include myself in that statement )

Also check my numbers. I make a lot of mistakes.

Somewhere out there sits a producer who has sold all his production forward over the next couple of years but now has to contemplate mine closures. Who picks up the shortfall?

Can a forward committed producer continue to to produce at a loss? For how long?

CBs mobilising their gold reserves are effectively short, rely on the system to continue working, the rate of turnover of bullion etc. to allow them to believe they can eventually cover their positions.

There is some bad news for these guys: the industry they rely on to continue their games is in deep doo-doo.

Closures on a big scale are around the corner. If the deposit is deep, it dies ( watch out, RSA ) .

Junior and medium sized producers that still carry a sizeable debt service on their initial or recent plant capex will fold.

Exploration, the engine behind healthy supply, has already taken a massive knock globally.

If the system that supplies the commodity that everyone wants to short should shut down, how do the bears cover?

Gold is now BELOW 290.......oh dear!...end in sight?!? Next stop...284, eh D.A.?

away...to witness the freefall

Éßottomlesspit

savage-got your post and wrote something but it got erased so I must start over but now I am tired and will get some winky first. Are you holding some near worthless JOF7? ;- )

......zzzzzzzzz nite gold......zzzzzzzz

ADD to your statements the it'll have little to no effect on us crowd, and you've got some people who are becoming very weary of those attitudes.

With 60% of U.S. Western States' export markets in Asia?

We'll see.

( the 60% came from Wolman or Rogers. Don't recall which. )

Heard rumour that CocaCola plans to market coke

in SOLID GOLD cans.

You will be pleased to hear that cans are NOT

disposable but must be returned for deposit.

Frankly I dont believe this

Mining Journal lists Royal Oak with cost of 356$/oz - They lost

0.22$/share at higher gold prices - Dont believe I would rush to buy

this stock IMHO.It's 1997 high is shown at $3.59, so its only a little

less than half its 1997 high. I can list a string of South Africans

that are down more than this, and still making money. Woops - Not a

string - but a few.

The rapid-fall devaluations of Thailand, Malaysia, etc, caught citizens off guard and I believe that gold ( having gone up in the local currency ) was sold only as a last resort to pay the bills. We are still in that stage.

However, in a slow devaluation, citizens of China would begin to notice what was happening and I think, would buy gold for individual protection. They certainly wouldn't be buying US Tbills. Therefore, I would expect a bottom in gold if the Chinese start an organized devaluation.

By the way, are you related to a friend of mine, M. Goose?

away...to register republican....better-of-the-two-evils

Éßthrowinginthetowel

All: I have always wondered how the US could get other countries to sell their gold, without doing the same. The German, French, and Swiss CB's do not wish to sell their gold, unlike a number of other central banks. But then -- they do not find themselves playing the role of the holder of the world's currency.

If the US still has its gold in Ft Knox, what arrangements might have been made with other world-class central banks to keep it that way?

Questions within questions.

The book I was quoting from is titled: Exchange Rate Targets and Currency Bands, eds P Krugman and M Miller, Cambridge Univ press, 1991.It is a compilation of economic papers presented at the University of Warwick during July 9-11, 1990. The conference was titled as per above title. The Center for Economic Policy Research and the National Bureau of Economic Research sponsored this conference.

Most of this book is mathematical, dealing with economic subjects dealing with how to go about maintaining a stable currency -- fixed, currency bands, floating ,etc,. There are historical tidbits scattered between the equations. Though math is easy for me as a Physicist, I am not accustomed to Economists methods of analysis.

What is interesting is that much of the book is focused on going back to a gold standard of sorts -- but not one that is rigidly fixed, like the ones that predate the computer. As far as I can tell, they are talking about a modern type of currency, with the exception of using gold bullion as an anchor to stabilize it. My guess is that the currency that would be allowed to fluctuate in a band - semi floating?. You may have seen some of my prior posts when I mentioned this book, and the fact there is a section that the describes the need to go on the gold standard in total secrecy.

It is also very clear that all countries would need to have some gold in their reserves for this to work optimally.