With the price of gold holding at the $280 level I am wondering what the groups thoughts are on the short term up could be.The latest downturn the second of two dipps could be a premetive for a short rally and we can see a level of around $295-$300 again

on the back of slightly hightened consumer interest. If India with deregulation as a driving force could become a consumer again maybe the bacon is saved or?

I think we all underestimate the magnitude of the trouble elsewhere. By comparison our dollar problems are minor -- at least for now.

Did you see the posts about the downgraded American banks? With the dropping interest rate spread, as well as losses in foreing investment -- this would be expected. I am also watching Brazil and Canada very carefully. If the dollar tug of war going on becomes bullish, we may have a markedly reduced number of trading partners very soon.

I wonder --- do you think S Korea is going to sell us cars at a 30% discount? Our local auto industry would be up in arms!

http://www.stockmaster.com/sm/g/D/DROOY.html

Don McIlvany ( just got his Jan newsletter today ) actually compares the dominant paper/electronic money -- suppressing the naturally stronger gold to the big money medical drug establishment suppressing the alternative medicine/health food industry ( vitE,vitC, selenium ) -- all the proven nutritional elements that have been ignored -- some known for 20 years! I have Linus Pauling's original book on vit C, by the way. Interesting reading. The analogy is not complete as there are excellent medicines made by our drug industry, it is just that there are some very cheap nutrients purified from natural sources that work even better that the commercial ones, and with virtually no side effects! Linus Pauling said that multi-gram doses of VitC reduce excercise-induced muscle pain in his 20 year old book -- which I discovered purely by chance! Also seemed to help my wife's shortness of breath when she got total body muscle pain from the flu! One of my colleagues just got an MI, and is taking Coenzyme Q, with apparent benefit.

My opinion about gold right now is that we are still in a bear market-- a few more months, but you can see by the tenor of the posts here that the turning point is very soon -- probably months. Gold stocks will be a good buy after a major market correction, and pre 1993 gold coins are safe now -- but you probably know all of this already! What I am doing is buying gold stocks on dips, and selling them at the peaks before the next downturn. I'm holding silver stocks. The El Nino is likely to cause commodity prices to skyrocket in the spring -- Europe Mexico and South America may be hit harder than us. If so the commodity price rally may be the final straw to turn gold around.

I would like some input as to where you folks here at this

Kitco BB think gold is going. I'm looking for a consensus on what everyone thinks is the bottom.

What is the point of the above? Inflation.

If they choose to believe in deflation here, then so be it. I shall consult fresh chicken entrails daily for the best entry price in gold...

. :- ) )

share some gold-related grassroots news, which

some of you may find interesting.

The good news first. The first thing I noticed

when I landed at Bombay was the long wait ( over

an hour ) at the gold importers counter in the

Indian customs. An year earlier, the same place

had no wait at all. I had a chance to talk to

one of the couriers. He said he would have

liked to bring more, but 30 Kg of gold ( along

with other luggage ) is all his body could

handle.

Went to visit my jeweler friend's shop, but

found him way too busy to have a chat, so I met

him after business hours. He said he had lost

the equivalent of an year's income due to drop

in the value of his inventory ( Indians do not

have access to gold futures markets for

hedging. ) He did not look depressed though, and

thought gold is not likely to go much lower.

People here are buying so much gold, that India

will absorb all the gold the central banks want

to dump, he claimed. I found it hard to

believe his claims.

While the jewelry demand is very strong, what is

really driving the gold market in India, is an

imminent crackdown on tax evaders, who are using

gold to park their undeclared income. ( India

has just concluded a tax amnesty period and a

vigorous enforcement phase is about to begin. )

Now the bad news. I feel that the current

strong demand will cool off in a few months, as

the income tax related buying is a temporary

phenomenon. An even stronger reason is the El

Nino, which has brought untimely rains to most

parts of India. In one state that I visited, 90

percent of the districts had major crop losses,

with about 10 percent of the districts expecting

near 100 percent crop loss. Many other parts of

the country are reporting similar problems.

Since the normal gold buying in India is closely

tied to a good harvest, expect weak demand in

the coming months, and possibly some selling.

Like other Asian countries, but not to the same

extent, India is also experiencing an industrial

slowdown, which may be a recession.

shows, stories ( mainly what's on at the box office ) ? Notice that they seem to do more today than this time last year? Notice they are owned by Time Warner , who might just be in the movie business. Maybe I should take my gold investment and plant it over there. Vertical integration , same kind of thing happened in 1929 but back then weren't they were called Trusts?

They were not healthy for us back then are they healthy for us now?

However, if the Central banks actually increase their gold stores, that will be noticed, as that will go on their balance sheet. I wonder -- who checks to see that the gold that the central banks say they have is actually in the vaults?

http://www.intersurf.com/~vor/gold.html

The envelope is turning up!

Merrill Lynch has apparently lowered its ratings of estimated earnings for the following banks, whose shares dropped in morning trading by the percentages shown in brackets:

Citicorp ( 4.8% )

Chase Manhattan ( 3.7% )

BankAmerica ( 3.4% )

One wonders how much gold these banks have got.

http://www.intersurf.com/~vor/gold.html

The overall envelope is turning up!

Some of you may remember August 29th 1997 when Malaysia banned manipulative short-selling of stocks, which was soon followed by investors dumping Malaysian shares in a massive sell-off, and the ringgit sinking to its lowest level against the U.S. dollar for 24 years. The ban on short-selling was reversed within a week after a special meeting of the United Malays National Organization party.

This may turn out to be another step towards the economic events that will bring back the bull market for gold.

I think AG will do his best to stay with us for the next four years.

Rising gold stocks today include NEM, NGC, GGO, MDG, PGU, GSR, and CDE. The first six are in the top ten holdings of FSAGX Fidelity Select American Gold. Perhaps there is buying today by FSAGX or other gold mutual funds.

does not go well with the fact that FSAGX shed another 3.5% today.

We still have a long way to go.

SDRer - enjoyed your 15:42 Davos conference about China emerging a world leader. Did you know the post that you implied was for this year actually has a 2/21/96 date? Probably this years poll would be the similar anyway, given that the Asians are savers, and we are borrowers.

Noticed that Brazil and Mexico went down today. I sold my Brazil mutual funds about 2 months ago, mostly because of Donald's posts about their financial problems. Looks like the South American refuge of investment is finally showing weakness -- perhaps the first four bars of music, as you said SDRer. I wonder when the fat lady sings.

PPT -- Yesterday I posted my converns that the deflation talk by Greenspand and Rudiger Dornbusch may be due to the fact that the PPT has run out of funds. If they have, and secret supplies of cash cannot be located, another pillar of the three-legged stool of the market may be weakening.

Bonds -- One last thought that supports D.A.'s inflation premise -- if Japan and China start selling US treasuries into the dollar rally, that will raise interest rates, not lower them. If the dollars return to the US of A soon -- inflation not deflation may be the name of the game. But -- on the other hand -- if the stock market also goes south, the water is muddied.

Again -- the best thing to do is keep your powder dry, or buy hard gold assets.

The professor is right - LGB brings out the worst in

all of us and we waste time responding to his postings.

Is the US economy and the US market going to rise without limit into the stratosphere, with no more corrections, and no more depressions? The US has had at least three depressions, numerous recessions, and numerous wars. What I don't understand is why the possibility that the markets might go south is unthinkable -- that is like defying the law of gravity.

Of course -- noone can predict the time of a correction or a depression -- but we can try. Statistically, the market is 3x more likely to go up than down. But as Trader Vic showed eloguently in one of his books, you can plot the steadily increasing odds of a market correction on a monthy basis, just by using historical comparisons. Given the lenght of this rally, and the incredible world events that are unfolding, by now the odds are certainly better that 1:1 that we will have a correction this year.

AG did survive the 1987 crash, so he has been through the wringer before. He is now very experienced at running the Fed, and he may be able to keep peace with all the competing factions.

I think we need to alert for signs of AG passing the baton to one of the pro-inflation types at the fed. Perhaps the Oldman will give us some more clues.

You SAY that you are employed and TRAVEL all over the

world to RUSSIA and other colorful places. Well now

if that is true how come all you really seem to do is

sit at your PC and type Rubbish and start arguments with

your obvious superiors

I believe you are really a casual employee hired by

the Treasury Department to harass Gold Bugs. This is

how you earn your living and at minimum wage you poor

devil.

away

Éßshukinandjivin

Enter text here: [_____________]

Options:

ALL words

ANY words

As a phrase

It would be nice, wouldn't it! How about it, Bart?

away...to the grind

Éßondrules

Lets have a NAME THE BUG contest -

How about Lousy Greasy Blob or Looney Grotty

Blockhead

ideas - Id just like to pick you up and shake you!!

Spuds - I am not asking you EXACTLY where. Generalities ( show him how lgb ) I guess I don't care where you put your money....as long as you have something other than SS to look forward to. I will be comfortable and so will my grandkids........regardless of what you write about me. Pals or not?! Well....... C'mon Spuds, you big LOVE-BUG!!!

btw....did you read the USA TODAY yesterday It gave a 'top-ten' list of mutual funds performers and losers. You should pick one up if you haven't. *warning* It could be painful if you weren't 'on the good-ship'........... Not bad for ( how do you say ) lemmings.......and Hadhocks ( ? ) .....I don't fish much....

away...to boil some taters

Éßafoolyeahright

btw.....The only ship I'll be riding is a cruise ship. I will spend some hard earned profits basking in the sun whilst sipping cool Rum drinks w/ little umbrellas. Care to join me I'll save a deck chair for you. But you must promise to leave the bitterness at the dock because we will be doing some HEAVY celebrating and spending vast amounts of cash on whatever suits us. It will be an 'orgy' of food and drink. I will be going in March ( mexico 7 day ) and in October ( 7 day Caribbean ) . Let me know.....deposits are due.....ohmy!

Will we ever be amigos? oh how i wish it were so.............

away...to search for the Spuds I know and love

Éßfunninandsunnin'

go gold......I can't believe it bellied-up to the 280 line and turned around......my pattern making is on track........it will be mine DA...i will have my chance to short also....maybe...uh huh.

I have several questions: First, I thought that imports/exports were rising so quickly they now represented 25% of GNP. Fastest growing part of the GNP as I recall. I have a hard time remembering the last time I bought something made in the USA, other than food or shelter. Secondly, the dollar is still rising fairly rapidly, putting more pressure on our trading partners, including Canada. This raises the possibility of further currency devaluations.

One point in favor of inflation is that, in addition to the flood of dollars, Europe's weather now seems to be aversely affected by El Nino. So, we may have a rise in food prices in the spring after all.

The big problem is our unresolved debt problem, though France and Germany have bigger problems than we do. Eventually all countries will have deflation, since that is the nature of things. So if we do not deflate this year -- when will it be? Y2k? 2015 when Soc Sec goes belly up?

Did you see sharefin's Avid post that the OldMan is now convinced we will have a depression very soon? It would be nice to get the OldMan back on Kitco to explain his reasoning.

Any commments on what the OldMan said on Avid? It is very unusual for him to make any long term comments, since he is a day trader. For him to say depression in 12 months means he expects a major market downturn very soon. I wonder -- why the sudden about face?

I am at a loss to decide what to do with my gold investments. Bailed out mostly yesterday. Mike Stewart thinks we are at or very near a bottom in gold/gold stocks- he seems very competent. The problem is that during a deflationary crash, all equities will get hit.

My assessment is that the gold/gold equities will not rally until the dollar is hit fairly hard. If the dollar drops fairly slowly, gold equities will do fairly well. But -- if the dollar drops 10% in two days, the clock will start ticking for a crash.

Who said that surfing the Gold bug Tsunami would be easy?

I find it amusing ( as others have noted ) that the Thai and S. Korean gov'ts are soliciting gold to reliquify their economies, rather than cherished US paper currency. There ought to be a message in that for everyone.

Anyone have any thoughts on market-neutral long/short combos?

I was thinking of trades like:

Short Citicorp or JP Morgan ( major exposure to far east debt crisis ) , long ( any regional or local U.S.bank )

Short Polaroid, Kodak, or ( especially ) Fuji ( silver halide users in film manufacture ) , long Silver mining stocks ( PAASF, SSRIF, HL etc. )

Short Barrick Gold ( major hedger ) , long Newmont Mining ( minor hedger )

Short SPDR, long Central Fund of Canada ( bullion-only fund at something like 12-13% discount to market value of bullion holdings )

in 1997 from 1.7 million in 1996. It peaked in 1987 at

a thumping 9 million lost man-hours, then averaged 3.1

million through 1995. So lost man hours due to strikes

are about one fifth of what they were 2 years ago.

Contrary to conventional wisdom, there have been no

signs of a revolution resulting from PW Botha's impasse

with the truth and reconciation commission. In fact,

I havent even seen but one mention of it in the press

for the last week or so ( but then I dont read the

Guardian ) .

The American visiting American emissary louis farrakhan

was in joburg at Winnie's house to express his sympathy

for her after her rough treatment by the TRC. He was

here to spread moslem good cheer and sow the seeds of

racial harmony. Farrakhan referrred to Botha's

thumbing his nose at the trc. This issue as well as

the question of delivery by the government to the

Black majority seems a lot more important to foreign

journalists and the odd Yank than it does to the local

people.

For a small country, we get a lot of free press

coverage. Marvellous really.

Also, a more conservative way of shorting would be the Rydex Ursa Fund ( an inverse-performing fund ) , or a short sale on SPDR's ( Standard and Poors Depositary Receipts )

Unless the chief currency ( USD ) is devalued...alot. Which I'm certain no one expects.

If this is the ploy -- things must really be going sour, as mentioning the big D word is not what economists usually do -- because they might actually cause what they are most afraid of happening.

What do you think -- what's up AG's sleeve? Perhaps he is trying to get support from US businesses to help out. Could it be that the PPT doesn't have the deep pockets it had a few weeks ago?

Are AG and RD just covering their bets, or do they know something we don't know? If they are only trying to scare Japan into responding in some way, why do they need to make public announcements?

P.o.g. falling? Ah, well, let's consider that when the going got tough in South Korea, the politicians did not beg for those /valuable/ bits of paper people had in their pockets but rather that grotty, useless gold that everybody knows is a /worthless relic/. Not only is the fact important but that it was put onto the news wires is important.

That latter fact, particularly, may do us gold investors more good than all the efforts of the world gold council over the last year.

Gold is reality.