GFD -

Thanks…….. I sent myself an e-mail………. I'm waitin' for that arrow……

Regarding Buffet: The big money NEVER shows their hand. Anything we know they knew first. If we hear what these big boys are up to, its already too late to take advantage of it.

Isure -

Count on it. I have been getting calls from clients who bought silver from my firm in the early 1980s. After all these years, they have written off ever making a profit, and $6+ silver looks awful tasty. I think the 6.80 - $7.00 range could shake loose a lot of this silver. Apart from what Barbie says, many people took delivery of 1000 oz weight hallmark bars - JM or Englehard, its all I trade. The stuff is deliverable to any user in the world. The effect of this silver on the market is impossible to predict. This whole shortage has been engineered and will vanish in a puff of smoke when its all over. There is no shortage of silver. Silver will still fly. That just the way it is.

Heavy hitter @ Silver will not make the move in comparison to gold. The majority are being led to silver, but the real money will be made in gold.

Let's see. Silver has risen 60% in the last year, gold dropped 30%. I'm not sure how you define real money, but any bet on gold ( unless on the short side ) is real money in someone else's hand, while silver has already paid handsome profits.

Saying that silver will not move in comparison to gold, is kind of like saying the sun did not rise today. Even here in stormy California, we all know it did.

Just a thought on silver, there are millons of ounces in private hands, some of it has been there for years. As the market reaches break even or close, expect this silver to come into the market , as many would be happy to come close to break even. Gold on the other hand has a long way to go before most would consider selling their phisical. Lot of folks got caught in the silver run up and will be happy to recover even a portion of their losses.

Will see you all in the morning!! Happy trading!

We might get hoodwinked by all the hype!

But -- if a buying frenzy begins, it will not matter will it! I doubt that we will have a buying frenzy for months or longer, and then only if something else -- big time inflation -- Presidential crisis -- Iraq crisis -- triggers it. IMHO.

I think also that the Iraq stuff will smoulder while Madeline Albright tries to get her ducks together. Nearly impossible job I would think. BC is much more likely to fight a war by consensus than George Bush -- but he might 'up the ante'.

So if it is to be a downturn in the US markets, it will probably be some disclosure about gold, or the SEAsia financial crisis.

Another possible scenario is that Feb 26 might be a major turning point for gold!

Unfortunately this astronomical/tidal stuff does not tell you direction or magnitude of a market turning point ( or even which market ) , but --- only 'when' it will happen.

Something like the Buffett announcement will encourage all the other 'me-toos' to do the same, just as they have done in his other investments. A very small average reallocation to precious metals will cause a dramatic rise in price. Until you see silver or gold on the cover of Money Magazine, or the gold/silver price ratio hits 30 or 35, its probably still early in the game.

Since this move is so typically contrarian of Buffet's style, a natural thought from the public point of view might be: 'where else in the downtrodden markets has he been buying? Gold? Gold and Silver stocks? Uranium? Oil?
PGMs?'

I agree with the view that he will not be quick to sell; this has not been his pattern.

I think silver will be moving up too fast for me to add to my silver position -- which should have been much more than it was!

By the way, did you read the news that Monica Lewinsky went to the White House over 37 times since she took the 1996 job at the Pentagon? I wonder what she was doing that she said she didn't do? I also heard something about a security clearance. Did the FBI checkout her background, or was it just like the John Huang situation? I don't think she tried to sell F16's to the Riady's -- she was probably to occupied for that. Also, Charlie Trie turned himself in. Is John Huang next? He might return from China if he is given immunity -- now that would really be news!

In the year of our Lord, 1979, was my first experience with silver. I was 28 years of age at the time, and just started my second business, which was a small convenience store. I also sold gas that I purchased from a company owned by a man named H. L. Hunt. Some of you have heard of him I am sure. Well, to make a long story short, the man that serviced my store told me he had heard that Mr. Hunt was buying silver and thought I should try some. Even though I was pretty much in debt, I said what the heck, and I bought two $1000 bags of silver coins. I can't remember the exact price, but it was close to the bottom, the rest is history. Silver went to $50, I had truly stumbled upon a gold { in this case silver} mine. From that point on, I have been hooked. I own both silver and gold , some bought at prices much higher than today. I have never lost one minute of sleep over them. I always have the security of knowing they are there, and will one day be more valuable .

What has this got to do with anything? Simply this, in a falling market you must trade the swings to make money, as some of you have pointed out. But in a bottom market, one depressed over years, you have to be more patient. And yes, be prepared to see some sizeable down swings. This is where you have to ask yourself, how much do I believe this is at or close to a bottom, how much down side exists? I point this out only because maybe the uptrend will be slow and give you all the time in the world, but believe me it can mean the difference between real wealth and saying, Gosh if I had only been one day, or one week, earlier I would be sailing to Tahiti. How many of you expect to see these market conditions again, and if so how many times? THINK ABOUT IT, MAKE YOUR OWN DECISIONS.

Please excuse my writing skills, as I am not an author, just a business man. I hope I have made myself somewhat clear.

I am not experienced enough to give you specifics about the above points -- just the guidelines above.

The last point is that you should never buy into a short term rally! You will not be able to get a stable price, and will very likely find yourself in negative territory fairly quickly. If you can, buy silver when it is trending down - perhaps after the next wave of buying. But -- if you do buy -- make sure you are not so high that people that bought during the time Warren Buffet bought are tempted to sell.

I personally think it is too early for silver to go 'out of sight' -- namely $10 or more -- but I could be wrong. I don't know when one of the biggest buyers -- India -- will start selling, but it might be above $7. One other thing to consider is that India may devalue soon. If it does, many Indians will sell their silver to make ends meet.

Tails......BUY !

( at the open )

If my memory is correct, the current share float is 5MM shares, But 28 MM more ( currently restricted ) shares can come to market on or about Feb 15th.... Don't get trapped if the new shares are sold and the price collapses from the profit taking.

If this information is incorrect please let me know; I'm planning on buying this one the dip, if it happens. Thanks!

Hold on to your hats, 'cause it'll be quite a ride…

Does any one know how much gold/gold stocks GS and WB bought? They would buy entire gold mines at fire sale prices of dollars/oz, I would think. Or is this still a secret? Perhaps they will use their silver profits to buy gold/goldstocks, but I doubt it. They probably know what will happen to gold next, and they at least have a small stake in gold, just in case the rally begins earlier than expected.

I have a question to everyone -- only a few days ago the Australian gold markets went up 6% in one day, based on the rumor that a South Korean gold firm defaulted on 400 tonnes of gold ( UBS-linked? ) . Then we hear nothing, and the gold markets are quiet. Now, gold goes down because Korea is selling 170 tonnes of gold -- but no not really because S Korea wants to wait till the price of gold rises before it sells. Now, if UBS has to buy hundreds of tonnes of gold to cover the S. Korean defaults, what better approach than to push gold down with rumors of some kind ( or other maneuver ) , buy the 400 tonnes of gold, and then sell it to whoever loaned it back in the first place. If gold can be pushed down low enough, the shorts in this deal will stiil make some money, and will be able to return the gold to its rightful owner. Given the determination of the 'powers that be' to debunk gold, this scenario would fit in with the weakening consensus goal to keep gold prices down!

I wonder -- could the G Soros and W Buffet business be the deathknell to this scheme, and the gold shorts get wiped out tomorrow? This will be interesting, regardless of whether you believe this or not. It will be interesting to see if in a few months or so, UBS reports more losses.

I wish I had bought more PAASF!

I wish someone would of answered my Buffet question on 1/31. Doesn't anyone read the night posts?

thanks again.

I enjoyed the short upswing this month but I am glad that I pulled all my money from Fidelity PM mutual fund this morning. Sorry guys, I can’t go for that ‘lets show the rest of the investment world our dedication and show them that we can ride the storm’. It would be a zero gain game. As soon as we pass the bottom, and start going up, I’ll be back in. At this time, I am just enjoying some run up in technology stox so I can have some more money for joining another up-cycle in PM funds.

Don’t dwell too much on justifying why the financial markets are screwed up, stox are overvalued, and gold must eventually go up. It will, but don’t keep loosing your money in between. Don’t worry about missing a few days of profiting when the market turns up. If you protect you money when market goes down, you won’t miss anything, and if all gains were supposed to be made in the first few days, it would not be the rally worth talking about.

Investment better be separated from emotional feelings. That’s where the most gold bugs fail.

of 2.9% or so today, with the actual NAV off close to 2.5%.

This is by far the best performance of FDPMX relative to the drop in bullion on a huge down day I have seen in the past year, and I have not missed many days. The XAU is off 5.5% or so with bullion down around $7.

Usually gold stocks have been dropping 1% with every dollar drop in bullion, so today is an interesting day, possibly not as discouraging long-term as it might first appear.

Of course, the standing of FDPMX amongst PM funds is tremendously improved ( so far ) over last year.

Silverdolr@webtv.net

Does he believe himself?

Why hasn't he been able to convince Alan Greenspan to do the same with his money?

Do we have a double standard? Them and us?

I think gold will do this, though the CB's will do their very best to slow the rise of gold. Steven Leeb thinks so ( I respect his insight ) , and so does F Veneroso, the latter having compared the price of gold to inflationary trends for over 100 years. FVeneroso thinks the equilibrium price of gold is about $600 right now! Given the nature of gold to historically overshoot, it could well reach $1000/oz on its rise before year 2000, and then settle back. I think we will have a nice rise very soon!

Word is that there is one very large short position in silver that is getting squeezed today. Open interest down 25K contracts. Everybody else got to cover their shorts, where was this schmoe? The fact the nobody seems to be dumping London silver at 15 cents over New York today, is very bullish. Contrived or not, the market is in physical shortage right now. Lower lease rates, and a double top should combine with slightly higher warehouse stocks to push silver back to the $6 range, at which time I plan to buy a bunch of it. They're going to make a run at $7………. Soon.

The $9 drop in gold has buoyed my spirits some. I would love another chance to buy gold at $280. I still like gold here. The downside is risk is small and I think gold must move back to the mid $300 range before summer.

Platinum is in a coma. The break above $400, when it happens, will be swift on the heels of news that Russian shipments will be delayed. Another rumor today is that there was a large palladium sale in Japan overnight, but I could find nothing to support that. I'm still buying platinum.

Has anyone told you in a heavy wind a hollow pipe makes the most noise.

First -- why is gold going down? I plan to hang in there, and buy more when it bottoms. But the more important reason is: Why?

Is there a distress sale going on?

Is some CB in dire straights?

Or is it simply the gold shorts trying again.

I think we need to be on the alert for hidden problems that might come around to bite us -- like hidden financial crisis in Japan, a pending China devaluation ( ? ) , or a gold fire sale in South America.

I think the only real risk to the gold bug now is a financial or market collapse. Otherwise, gold/gold stocks are goin to be an excellent investment over the next 1 or 1 1/2 years!

I agree with you that we must separate money supply from credit somehow. I was thinking about that, and I think the solution will be using money that is firmly attached to a scarce commodity such as gold, and then work out a formula to allow for an average inflation rate for that currency, as well as rules for how much the M2, M3 can be amplified relative to the money supply base. These rules would have to be strictly ahered to on an international basis -- sort of like an International Bureau of Standards for money supply and credit. Fluctuations in the value of a given currency could be allowed by using gold reserves as a buffer.

By the way, there is no need to expand or contract the world currency for international trade -- only the individual currencies for each country in relation to their economic strength. This world currency should be rigidly linked to so many ounces of gold, just like the BIS does. If this were so, much of our problems in SE Asia would have been minimized.

Who Needs the IMF?

By GEORGE P. SHULTZ, WILLIAM E.

SIMON AND WALTER B. WRISTON

President Clinton and the International Monetary

Fund have shifted into overdrive in their effort to

save the economies of Indonesia, the Philippines,

South Korea and Thailand--or, to be more accurate, to

save the pocketbooks of international investors who

could face a tide of defaults if these markets are not

now shored up. But this must be the last time that

the IMF acts in this capacity. If it is not, further

bailouts, unprecedented in scope, will follow.

Therefore, Congress should allocate no further funds

to the IMF.

It is the IMF's promise of massive

intervention that has spurred a

global meltdown of financial

markets. When such hysteria

sweeps world markets, it becomes

more difficult to do what should

have been done earlier--namely, to

let the private parties most involved

share the pain and resolve their

difficulties, perhaps with the help of

a modest program of public financial

support and policy guidance. With

the IMF standing in the background

ready to bail them out, the parties

at interest had little incentive to take these painful,

though necessary, steps.

Largest Bailout Ever

The $118 billion Asian bailout, which may rise to as

much as $160 billion, is by far the largest ever

undertaken by the IMF. A distant second was the

1995 Mexican bailout, which involved some $30 billion

in loans, mostly from the IMF and the U.S. Treasury.

The IMF's defenders often tout the Mexican bailout as

a success because the Mexican government repaid

the loans on schedule. But the Mexican people

suffered a massive decline in their standard of living

as a result of that crisis. As is typical when the IMF

intervenes, the governments and the lenders were

rescued, but not the people.

The promise of an IMF bailout insulates financiers

and politicians from the consequences of bad

economic and financial practices, and encourages

investments that would not otherwise have been

made. Recall how the Asian crisis came about. Asia's

tiger economies were performing well, with strong

growth, moderate price inflation, fiscal discipline and

high rates of saving. But these countries encountered

a currency crisis because their governments

attempted to maintain an exchange rate pegged to

the U.S. dollar, while conducting monetary policies

that diverged from that of the U.S. Capital inflows

covered up this disparity for a time. But when the

Thai currency wobbled on rumors of exchange controls

and devaluation, the currency markets quickly swept

aside increasingly unrealistic currency values.

This led quickly to a solvency crisis. It became

difficult, if not impossible, to repay loans made in

foreign currency on time. The devaluations shrank the

values of local assets, which were often the product

of speculative excesses, unwise ventures directed by

government, and crony capitalism. The private

lenders and borrowers involved were in deep trouble.

They were, and are, more than ready for money from

the IMF.

The world financial system has changed

fundamentally since 1946, when the Bretton Woods

agreement was approved. The gold standard has

been replaced by the information standard, an iron

discipline that no government can evade. Foreign

exchange rates are now set by tens of thousands of

traders at computer terminals around the globe. Their

judgments about monetary and economic policies are

instantly translated in the cross rates of currencies.

No country can hide from the new global information

standard--but the IMF can lull nations into

complacency by acting as the self-appointed lender of

last resort, a function never contemplated by its

founders. When the day of reckoning finally does

arrive, the needed financial reforms are extremely

difficult politically because they are imposed by the

IMF under duress, rather than undertaken by the

countries themselves. The photograph, widely

published throughout Asia, of Indonesian President

Suharto signing on to IMF conditions with IMF

Managing Director Michel Camdessus standing over

him imperiously reinforces the perception of an

outside institution dictating policy to a sovereign

government.

Even though the IMF recognizes the causes of the

crises and conditions its loans on remedial measures,

many observers believe that these remedies often

make the situation worse. In any event they are

rarely carried out in a timely fashion. There are

already indications that several Asian countries have

violated the terms of their agreements. Furthermore,

IMF-prescribed tax increases and austerity will cause

pain for the people of these nations, producing a

backlash against the West. There is already talk of a

conspiracy to beat down Asian asset values in order

to provide bargains and control for Western investors.

And yet, because these countries are able to avoid

fundamental economic reforms, their currencies

continue to collapse. Indonesia, South Korea and

Thailand have each seen their currencies lose more

than half their value against the U.S. dollar in recent

weeks, despite the promised IMF bailouts. The loans

from the IMF are, in fact, trivial when compared to

the size of the international currency market, in which

some $2 trillion is traded daily. These markets'

instant verdicts on unsound economic and financial

policies overwhelm the feeble efforts of politicians

and bureaucrats.

The IMF's efforts are, however, effective in distorting

the international investment market. Every

investment has an associated risk, and investors

seeking higher returns must accept higher risks. The

IMF interferes with this fundamental market

mechanism by encouraging investors to seek out risky

markets on the assumption that if their investments

turn sour, they still stand a good chance of getting

their money back through IMF bailouts. This kind of

interference will only encourage more crises.

Asian nations are facing financial difficulties not

because outside forces have imposed bad economic

policies on them but because they have imposed

these policies on themselves. The issue is not

whether the IMF can move from country to country

dispensing financial and economic medicine. The

issue is whether the governments in these countries

have the political will to fix problems of their own

making.

What should we do about the problem? We certainly

shouldn't follow the advice of George Soros, a well

known figure in the international currency markets,

who has called for the creation of a new International

Credit Insurance Corporation to be underwritten by

taxpayers of the member countries. The new

institution, which would operate in tandem with the

IMF, would guarantee international loans up to a

point deemed safe by the bureaucrats running the

organization. The private sector is ill-suited to

allocate international credit, Mr. Soros writes in the

Financial Times. It provides either too little or too

much. It does not have the information with which to

form a balanced judgment.

Appalling Comment

When will we ever learn? This appalling comment is

exactly the opposite of the truth. The protected

markets, not the open ones, are in trouble. Only the

market, with its millions of interested participants, is

capable of generating the information needed to

make sound financial decisions and to allocate credit

( or any other resource ) efficiently and rationally.

Governments and politically directed institutions like

the IMF have shown time and again that they are

incapable of making these kinds of decisions without

creating the kinds of crises we are now facing in Asia.

The IMF is ineffective, unnecessary and obsolete. We

do not need another IMF, as Mr. Soros recommends.

Once the Asian crisis is over, we should abolish the

one we have.

Mr. Shultz, a distinguished fellow at Stanford

University's Hoover Institution, was secretary of

state under President Reagan. Mr. Simon, president

of the John M. Olin Foundation, was secretary of the

Treasury under Presidents Nixon and Ford. Mr.

Wriston is a former chairman of Citicorp/Citibank.

What a touch.

We might need it more than ever to take the sting out of what appears to be coming in the gold market in the next week or two.

I just left Albuquerque... what a friendly town.

Friday night, we went up on the tram to the top of the Sandia Mountains and the High Finance restaurant up there.

Did not see any gold. Just a lot of shimmering lights in the valley.

Down to Las Cruces to visit the in-laws.

And back to good ole' Maryland.

Lihir produced 150,170 ounces at a total cash cost of US$ 200/oz ( A$303/oz ) for the quarter. The result exceeded forcastes due to higher than expected grades in the sulphidic ore.

Cash operating cost of US$220/oz ( A$330/oz ) are forecast for 1998. Debt now stands at US$295 mill

It is going to take all the financial legerdemain that AG,RB & all their cronies can muster to avert a financial disaster. The global economy may be able to withstand the shock waves from seasia but if Japan goes-- it's all over. The most fanatical GB's fondest fantasy may come true.

Gold: In a tight upward channel within the broader long term downward channel. Reaching the point where it must either break the down trend, or head back down, reaffirming the bear is not dead. Many of our wiser heads are predicting it will head back south. Whichever way it moves, it will likely move swiftly.

Silver: Still moving within a broad upward-trending channel. Now in the middle. If it breaks the previous high, it could cruise to roughly 6.85 before it hits the channel border. Perhaps the collective wisdom of the Kitco clan can help determine the most probable direction.

Platinum: As with gold, platinum is in a tight upward channel within the longer-term downward channel. Again, the next few days are critical. Some, including John Disney, are predicting the next move is up. If so, it will break the long-term downward trend and could make a major move.

Palladium: I've given up trying to define a channel for PA. It does seem to be roughly following a trend line which I've shown.

http://www.kitcomm.com/pub/discussion/Chan0202.gif

The chart of currencies of gold buyers has also gone haywire. It seems that because of the traumatic weakening of the Asian currencies, the connection to the price of gold has been lost, at least for the time being. If not, either the currencies will make a quick recovery, led by the gold price, or US$ gold will drop to new lows, far below the previous lows. Or a little of both. At the moment, all I can say is this chart does not bode well for gold.

http://www.kitcomm.com/pub/discussion/Curr0202.gif

Good hunting all!

( Hope this does not post all jammed together as it appears in the preview. Here goes! )

Let me correct you.

This is not basically a gold site. This IS a gold site. The only other stuff that it is wide open to are silver, platinum, palladium, and rhodium. ( Did he say rhodium? ) The space cadets were supposed to have been filtered out by dumbfounding them with our complex registration procedures, but it seems we underestimated their computing skills.

To Marshall: Thank you for your excellent example of a posting that has no place here. Not only is it completely unrelated to the metals but it also breaks Kitco netiquette guidelines #1, #3, & #4 as well as some of General Discussion Group guidelines found at .

To Bernatz: You make me laugh. How do you possibly claim that you're a victim of racial discrimination HERE?! Look around! Can you tell who's what? You'll probably wind up getting kicked off the site yet again, but if it makes you happy I'll make sure you'll handle gets changed just before doing so.