Goebells is primarily synonymous with propaganda. That he was a NAZI is incidental to the point I was making. You seem in an uneven mood this eve. I have not a clue as to what bait you say you rose to. Seems whenever F and I are working things out, somebody always takes it personally. This has nothing to do with you. Again, where have I ever denigrated purchasers of metals? I write one thing, you add your own meaning, and then ascribe it to me. Best to buy your gold from Bart. He has Mounties at a good price.

OK

I doesn't matter what the price is when we buy it, ask percentages are pretty stable. We sell gold to people. We make money when we sell a LOT. That happens when the metal runs not when it falls for two years. I trade long and short. I have zero agenda, let it go where it will. I will tag along for the profits.

OK

Regardless of all of the discontent and lack of vigor some have on this thread, lets all just keep in mind that there is no such thing as a premature ejaculation.

I am shaking my head in amazement.

My boss is the largest dealer of gold in the world, we would make a fortune if gold would take off. I would do flips in the air. We would all shout for joy.

But until then, I will call it as I see it.

Seeing that that is the way it is

I see it well, yes?

Besides, I challenge anybody to be more inadequately rude. I was taught that in the army, by professionals.

And who is trying to control opinion on this group?

Farfel propagandizes, I report.

Goebbles would vote for farfel

Yes, he would

PMF: In fact I believe that Y2k *is* the trigger, and it's why I'm long physical for the long haul ( strong hands ) .

Brief Background:

I began with autocoder/assembler/fortran 34 yrs ago. Then COBOL when it started. Today am owner of a vertical application for IBM Midrange

for Petroleum Traders. We're in the middle of our own Y2k project. Coding 98.3% complete. Testing starts July ( None too soon I might add ) .

For us, with the original developers still on board, it's been less of a problem than with those folks who have to remediate other's code. And since we've subscribed to the surgical team approach as espoused by Brooks, our top talent actually touches code, rather than being promoted to Senior, and letting juniors touch the code. Our coding discipline was and has been strong, and we've maintained the application with the 15 years of changes in the industry.

I am very concerned about what others who aren't in as good a shape as we are. I've spent many evenings/nights keeping the beast alive, all unbeknownst to the users, who, if you asked would say Problem? There've been no problems. I know how fragile the facade we DP people keep up is. Problem: The users don't really want to know. They just want it to run. Problem: There just isn't enough time to find and fix it all.

I've tried the Paul Revere route. Even though my friends know that I am a smart guy, and have been into' computers for decades, they still say I'm not so sure. At this point, I say nothing, except to tell them what I'm doing, if they ask. What will be will be. There will be no spinning a fine tale on 1/1/2000, we will know if we were successful. I have strong doubt.

As to non-DP people? They can't possibly know. They think that because they have written an Excel Macro, that they understand programming, and therefore ought to be able to figure it out. Only when you've banged your head against a piece of code for hours upon hours, and it STILL doesn't run, only after you get to a point when you realize what you are trying to do MAY not even work, when you hit the point where you say Oh Sh*t when you realize that the whole company will be down unless you get it fixed, and you've done it for years, and you've hired and fired bunches of programmers ( all primadonnas as a friend of mine likes to say ) , and see just how many ways of thinking about solving problems people come up with, and commit to code, can you even have enough background to comment rationally on the scope of the problem.

But, everyone is entitled to their opinion, and they like to think that their opinion should carry equal weight. Such is life.

I don't want to debate Y2k with anyone. I'm not interested. If what I post here has value for you, that's great. If you disagree, that's great too.

This from my post of 3/27/98 before farfel began his crusade against me:

I have no serious argument as to the direction with our far flung fellow. Gentlemen may disagree. To find who was right, just count the $ at the end. The rest is obvious. My bone of contention was his post of all these Buyers of gold, when some are sellers, and some - China and Russia - are impossible to quantify.

OK -

Now, this is not an attack on beliefs, it is a correction of farfel’s purported facts. Is calling attention to a mistake, stated as absolute fact, not a function of this forum? Should those who know better let the rest here be misguided by errors? Farfel’s posts are rife with mistakes like the short squeeze, but I have chosen to not yet post them. I too would like this to end, but it will not as long as he continues to attack and shout people down.

If I were to post the collected mistakes, the laughing would be heard all the way to Bel-Air where this buying more fellow claims to live. Believe it or not, this is an act of compassion. He could never live the humiliation down. By the way, farfel’s contention that the Russians were buying gold has been proven by history to be made at the EXACT time they were selling gold. Another boner for the F star thingie boy.

For the last time. It is not direction, short term, or long term outlook that is the issue. It is farfel’s shouting down all who do not agree and his constant recitation of factual errors.

If this continues, this forum will die

What use would it be?

Recipes and guns and YK2 are all fine and dandy

But a gold forum needs to have contributors who understand gold

There are less and less to be found here

A process of terminal entropy

With little of value left

Sigh

http://www.mises.org/journals/aen_wi97.htm

I just spent a week traveling with the largest seller of gold bullion coins in the world and the chief global representitive of the oldest mint on earth.

Who has farfel gleened his reseach from?

By his own words, a guy at a cocktail party.

Let's get some perspective here.

Yes, let's

Do you have a single post from me to back up your assertion? Where do I denigrate buyers of PMs?

Farfel is jerk, this does not make the world so. You want some metals, feel free to call and ask for ANYBODY but me if you do not like the truth spoken. If you want to do business with someone who is bullied and browbeat, feel free. I walk my own road.

My clients who read this forum agree that the F thingie has gone too far. They want him to shut up. I get e-mails from lurkers who want him to shut up. I am the recipient of these attacks from an insecure pile of bombast. I stopped posting, the weasel kept it up. I go out of the country, the rodent picks as the subject of his first post for weeks to insult me and others.

Perhaps you should buy your metal from Bart to support the forum, yes?

It will need support

Farfel ruins this forum with his attempts to stifle any opinion that does not agree with his own

This forum is loosing its usefulness

It is dying

For those that have asked me, on these pages or through e-mail, to post my opinion of market direction or current info on this forum:

Sorry. It just ain't worth it.

Silence this clown first or have him forever

But not I

It will be like that

You are weak and getting weaker

I smell it

The sorry fact is, there are zero thoughts behind anything you say. It is all rubber stamped reactionism. When you do get a thought, let us know, we will be surprised but probably still bored.

Uh Huh

Every time I try to talk about the markets, F boy shouts me down with his endlessly repetitive rhetoric. If it is too noisy hereabouts, tell him to shut up. Even when I leave town this child sneaks back in to throw jabs.

This is not starting over. It never ended. You want peace? Then police yourselves and don’t let this little man ruin the forum for the rest. I disagree with many here, yet some of those would call me friend. It is not beliefs or opinions, it is style. That arrogant, condescending, pompous twit came at me relentlessly and silence issued forth from the collected Kitco masses ( save a few ) . So when I respond in full dress gear for a little clean up ops, everybody cries, Woe unto Kitco.

As long as this worm continues his attacks, I will wipe up the floor with him.

Endless mantras or real world info

Your call

Since he says the same thing over and over and over and over and over and over, and the bandwidth expenditure is farfel's blank check, and actual information about the markets has no place hereabouts, let’s just repost farfel’s yammering forever.

Yes…. Let’s

4/15

RJ capitulated to a powerful pro-gold polemic which he simply could not defeat. You understand the distinction? Bottom line: his retreat is a positive sign as predominant gold bear logic and arguments fall apart in the face of a New Gold Paradigm…..

…You see, when people make statements that you perceive will profoundly undermine your well-being, your respect, your entire perspective on life, then the normal reaction is confrontation...often heatedly at first...but over time, one learns to cast away the emotional handicap and rely entirely on pure, scintillating logical analysis.

To APH 3/27/98

However, I do resent technicians like APH who exhibit a negative bias against gold & silver. They are simply gold shorts masquerading as omniscient soothsayers. As I discussed in previous posts, the problem with the gold shorts such as APH is they prey on the significant insecurities of PM investors accumulated over years of watching their investments perform a slow dive…..

….So, forgive me if I speak out and declare the errors of negative PM prognosticators...as far as I am concerned, APH is failing to call a significant upward turn in PM's. Moreover, since I am a resolute long in PM's, his ilk are harming my ability to gain profit in this world. Ergo, they are my enemies and certainly the enemies of many Kitco posters who believe in Au and Ag

( @ALL...IN RJ'S 04:47, YOU CAN NOW SEE... ) ID#340302:

...evidence of compromise, concessions, and doubt. He is weakening in his beliefs because he knows he is wrong. Once he admits fully to his erroneous beliefs, then he will join the great gold bull. In other words, your friend APH has an Amen Gallery on this Kitco forum. He does not discern the patterns of the market...he affects them because sheep like you think he is the incarnation of Jesus Christ.

3/29/98

However, in a cumulative sense, I feel certain that Kitco has an effect on the markets. If the forum supplies continuously negative energy, then there are enough interlopers and visitors to this forum where various tidbits of such info will be picked up and disseminated broadly.

And:

However, as I said in previous posts, I do not believe we are entering a deflation. More than likely, we are witnessing the first stage of a stagflation... ( how many dozens of times has he repeated that phrase? Yet he repeats it still. Like his childish chant, he has one tune and bleats it endlessly )

3/30/98

No, Mr. RJ, you are the ostrich with its head buried in the sand. Start reading some of these erudite Kitco posts instead of basking in the narcissistic glow of your own automatic-pilot Bullspeak.

RJ...Oh, poor, poor agitated gold shorter, Wall Street Bull and America, love it or leave it chauvinist.

RJ, the people who no longer care about facts are you and your Wall Street Bull Mania buddies.. ( I guess he never paid attention to the fact that I trade metals for a living. His knee jerk reaction to anyone who disagrees with him is an automatic label. This is not thinking, this is reacting )

3/31/98

TYOUNG...if you want your gold & gold stocks now then I am afraid you are going to have to jump in and pay the full price. There are no more bargains to be had in this gold market. Most people holding gold today are die-hard gold chauvinists or new investors. If you are waiting for desperation amongst current gold investors in order to snatch up a bargain, I think you might find yourself waiting a long time. Today's gold investors have already survived their desperation phase. They are hardened by their journey through hell. Conversely, Dow & Nasdaq investors have never really experienced such a phase in many years. When their desperation phase arrives, it will be a frightful sight indeed.

At least, that's IMHUDO ( In My Humble Unemployed Drunken Opinion )

4/1/98

...nice to see you use my actual handle, FARFEL, instead of some silly, juvenile epithet.

4/2/98 - The guy who does not call markets called:

Silver should reach at least 9.00 an ounce by year end.

4/3/98

I sincerely doubt you will ever see gold at 280 again IMHO.

And this non sequitur:

I honestly believe that, at this point, there is considerably greater upside risk than downside risk to holding gold.

Yet he blasted me for the post I made on 3/27/98

I simply think gold will retest the lows. Everything, and I mean absolutely everything, points to 280. Maybe a little limp up to 310 - 315, but 280 - 285 will happen before June. The only people seeing bulls in the near term future for gold are those that wish them there.

I guess I missed that one by one week, yes?

As for all of you who say this is a fight over beliefs, it seems you are right. I offer analysis of the market and farfel attacks the beliefs. I was wrong in my timing on platinum, but for all the right reasons, but it is gold that farfel wants to discuss, at least that is what he posted earlier. Let’s see… gold went to EXACTLY 315 and closed today at 284. All farfel ever says is buy it now - just like he did at 315.

These are just tidbits, but oh what a mother-load they uncovered. I gleefully await the opportunity to post ‘em all.

Indeedy

Awaaay........ tocapitulatetoapowerfulprogoldpolemic

professionally. I am surprised that the WGC declined your suggestion. After all, the ANTI- gold crowd demeans and villifies gold at every opportunity, while extolling paper and equities as the new age road to prosperity.

The vast majority of people out there NEVER hear gold lauded for its virtues of intrinsic value and wealth preservation in uncertain economic times. The other side of economic reality is rarely exposed. It's a matter of education. Exactly what does the WGC DO with its budget? If it were a matter of funds for promotion and advertising the PM's, I would make a contribution if I had some assurance the promotion was done effectively across a wide spectrum.

Most gold bugs assume everybody else KNOWS the attributes of gold and silver and their role in the economic marketplace. That may have been true forty years ago, but it isn't now. Think how many younger people have never even SEEN a silver dollar, or a half dollar or a quarter, much less a real GOLD coin? REAL MONEY! The answer: Not many.

I wonder if it would be worth a try to approach the WGC again? That would be on your playground. Just a thought.

form or another, acknowledge the adage that Gold is now dead.

To borrow a famous phrase: The reports of ( Gold's ) death are premature. They are also mistaken.

As many posters here know, I head up the Gold commentary page at The Privateer website with the phrase: Gold is the POLITICAL metal. In the true sense of the phrase, its price is 'governed'.

Examine the genesis of the Asian Crisis since it was first noticed in July 1997. You will see that the peaks of the crisis were directly proportional to the size of the Gold price fall in $US terms. Gold fell sharply in July, when the Thai Baht collapsed. It fell below $US 300 when South Korea hovered inches from bankruptcy in Nov/Dec. 1997.

It has now gone from $US 314 to $US 284 since late April, while the Japanese Yen collapsed and South Korea and Hong Kong went to the wall.

The governing mechanism ( Gold loans, forward selling, Gold leasing, threats of Central Bank sales ) is well known here. The fact that the $US Gold price has been actively manipulated since the early 1960s should be equally well known. So too should the fact that control has only been lost once, for about a three month period between October 1979 and January 1980.

Since then, the U.S. has increased its funded debt by a factor of nearly 6 and has progressed from being the world's greatest creditor nation to the world's greatest debtor nation. The Dollar has gone from 260 Yen in 1985 to 80 Yen in 1995 to its present level of about 146 Yen. Gold has gyrated from just over $US 500 to just under $US 300.

We are now watching the culmination of the whole process of increasing financial chaos which forms the history of the past two decades. Asia, that part of the world which exploded into economic prominence and then economic pre-eminence over those same two decades, has now collapsed.

The Asian captains of industry, who rose to huge wealth, have now seen their fortunes disintegrate. They are attempting to rescue what they can, and all of this capital is flowing in a huge wave into the Dollar and into Treasury bonds.

The reason that it is NOT flowing into Gold - yet - is achingly simple. These men are not blind. They have seen the price manipulation of Gold. They know that Gold represents the biggest threat of all to the continued pre-eminence of the Dollar. Besides, many of them have to have Dollars, to service debt and to purchase the materials and goods they must have if their businesses are to continue to function at all.

We have now reached the end game, a situation unprecedented since the Dollar achieved global pre-eminence at the end of WWII, in which the U.S. bond market is booming while the stock market falls with ever greater speed. That, by all the factual data of post war financial markets, is a dead set contradiction.

To paraphrase a very famous lady: By the essence and nature of existence, contradictions cannot exist. If you find in inconceivable that the fiat currency and debt paper of the worlds' greatest debtor is being bought with a frenzy, while the metal which has been used as money for thousands of years gathers dust, seemingly spurned by all, check your premises. You will find that one of them is wrong.

While you're at it, watch US long bond yields.

PS, I've just put up P&F charts of the Dow and the Nikkei at The Privateer website. I've included a chart of the Nikkei as it was when it topped out in 1989-90. The comparison with the present chart of the Dow is very interesting indeed.

Now you know the top is in--- Sort of like Howard Ruff and the Ruff Times program on T.V. back a few years ago.... ( for gold )

you are too fast ( as usual ) to post I know it all - you don't without verifying the facts.

You say No one at Loral has a secret clearance, indeed, no one needs, to since we don't work on any classified technology.

That ain't true, you have many employees with top secret and top secret clearences - without it you would not be able to touch some contracts you work on.

BTW, the following is a description of one of your wanted and this possition requires much more than secret clearance:

Responsible for the supervision of a 24 hour Security Operations Center. Oversee a contract guard force that provides for the physical security of all buildings and structures to include alarms, entry control, CCTV and emergency response. Select, train, and evaluate shift leads in the use and operation of the Security Operations Center equipment. Develop and implement the Physical security budget. Requires 10+ years¹ direct experience in Industrial Security ( 5+ years in a supervisory capacity ) . Must be able to obtain TS/SSBI clearance; US Citizenship required. A BA in related field desirable.

Be careful with your facts!!

Brown set up Loral's Chinese contacts. He arranged personal meetings in China for Loral CEO Bernard Schwartz, with China's top military and political leaders. This was right after Schwartz contributed $100,000 in soft money to Clinton.

The Justice Department was running a criminal investigation on Loral. They suspected Loral had broken U.S. security laws by selling classified, top-secret technology to China. Clinton personally squelched the criminal investigation.

Because of all this, Loral received contracts from the Chinese, to supply them with critical missile technology. Loral made billions on its China deals. They continued to give huge financing to Clinton. In essence, China gave Loral the money ( albeit indirectly ) to help finance Clinton's campaign. ( China also used many other ways to give money to Clinton. ) Lo and behold, Clinton paid back his debt. He gave America's most formidable enemy the technology to destroy the U.S. And sure enough, that enemy now has 75% of its ICBM's aimed at the United States.

There is a name for this. It's called treason. China considers the U.S. its number one enemy. As a result of payoffs, bribes and campaign contributions to Bill Clinton, China has missile capacity that will soon rival the U.S. and Russia's. What's worse, the U.S. is dismantling her missile capacity, actually destroying missiles; while at the same time, China is using top-secret U.S. technology to develop and build up her missile arsenal.

( Besides Pakistan ) Missile technology Clinton gave to China is also filtering to North Korea and Iran. Iraq and Lybia will be next. And don't forget Japan. The Japanese were militarily neutral. Now they have very quietly bugun designing and building ICBM's to carry nuclear weapons. They have no choice. Their age-old enemy - China - is threatening the entire Asian region with the technology Clinton gave them.

Folks, the phone is ringing. This is the 3rd world nuclear wake-up call. Clinton's folly - his act of treason - has started the one thing no one wanted. An Asian/3rd world nuclear arms race. It is going to end in terrible disaster.

It sounds like a noble cause to seek out potentially dangerous personalities, but history says much about the futility and danger of such operations. Privacy is the first thing to go, then truth, and so went the Salem witch hunt....

The following image is not an advertisement, but simply an illustration of the level of absurdity we have reached.

Selby, good for you.

Let's not proclaim the end of the world as we know it... just yet. After all, the Klintoc regime has to build 'profiles' of children who may become 'gun murderers' in school. Ahhh, the myriad uses of computers to track us all, with nary a word said to the quarry. A mark to be placed upon said 'child', unbeknownst to all but those in the 'know', perhaps for life? Now that's scary...................

BBML

Then $20 Saints and Libertys joined in a similar,steep price decline.But then,in September 1997,with Gold bullion still months ahesd of its final January 1998 low,the prices for Saints and Lib reversed sharply to the upside,parting company with bullion and causing their collector premiums over thier Gold value to DOUBLE in just months

Bid price for MS60 Saints put in a bottom at $400.00 during September 1997 more than 3 months before bullion bottomed at $278.00 in January 1998.The bid price then rallied to $460.00 per coin,where we find it today ( June 5 ) as this article is being completed

This sharp price increase in MS60 Saints-in the face of a continuing decline in the underlying Gold price-caused thier premium percentage over melt to explode to a decade high 58% today.

I thought you guys needed good news for GOLD the rest of the artical is even better,but typing is a pain

Date: Tue Apr 14 1998 14:49

farfel ( @LGB...let's go over this syllogism very slowly so... ) ID#340302:

Copyright © 1998 farfel/Kitco Inc. All rights reserved

...that even you can understand.

In my last discussion with Mr. RJ, he announced that gold was definitely headed South and it would see 280

before it ever saw 310 ( he was unmitigatedly wrong and that is why we no longer hear from him...it's called

embarrassment ) ...

At the same time, he forecast that Palladium would surpass gold in value... ( he was right...but for the wrong

reasons...not because of weakness in gold but simply because of unusual strength in palladium ) ....

Ergo, as per my previous post addressed to you, it is not particularly impressive that RJ made the call, declaring

Palladium will be worth more than gold this year.

After all, when someone is announcing that a particular metal ( Gold ) is headed for the toilet, then that same

person could forecast that virtually any commodity is headed higher than gold ( and, ultimately, that person would

be right, correct? ) .

Now, do you understand, my gold-always-viewed-as-a-half-empty-glass friend?

Thanks.

F*

Yes, like Haggis a few months before, RJ told the truth as he saw it. In both cases the experts were absolutely correct. This is, I guess, what you choose to drive out of Kitco.

For example:

( @HAGGARD HAGGIS...ARE YOU STILL MAD AT PEGASUS? ) ID#28585:

Haggard, are still pissed at Pegasus for digging that big hole in your back yard down there in good ol'

Aussiestralia?

Listen, Haggard, your guess is as good as mine. Whether or not Pego survives is being debated in a bank

boardroom somewhere...even as we trade insults.

If they do survive, it will be because the banks accept some equity in lieu of a portion of the loan obligations. In

doing so, they will immediately impart value to the equity, currently perceived as worthless.

The banks' final decision is something only God can discern...neither you nor I.

P.S.... How does an Aussie say thanks after a good meal?

He uses the toilet instead of his underwear.

The pattern is constant. Gentlemanly demeanor and nasty, snide anti-Scot and anti-Australian jokes. All the while, he was dead wrong on Pegasus, just as he was dead wrong on gold in April, on the stock market bottom, etc.

And what is the point of this?

Date: Fri Apr 17 1998 00:03

farfel ( KITCO...is it a glee club for gold? ) ID#340302:

Copyright © 1998 farfel/Kitco Inc. All rights reserved

A certain poster recently disparaged this forum as evolving into nothing more than a glee club for gold. The central

thesis...it is imperative to hear the opposing point of view, i.e., the derogatory perspective of gold's value, in order

to achieve balance and proper perspective.

Personally, I do not believe that Kitco's strong bias in favor of gold ( or silver ) is a a bad thing. Why? Because

today, we live in a world in which gold is disparaged routinely in virtually all mainistream media...or it is ignored

completely.

What is so wrong about the tendentious nature of this forum then? Why is it perfectly acceptable for a media outlet

such as CNBC to blast its frequent, total, chauvinistic support of the supremacy of equities and bonds ( and the

irrelevance of gold in a modern economy ) ...yet somehow various Kitcoites feel it is imperative for this forum to

present a fair balance between goldbugs and their pro-equities/anti-gold poster antagonists...and the very same

Kitcoites become oh-so indignant if they perceive the argumentation is balancing too far in favor of gold

What is wrong with having another strong mouthpiece for gold ( such as the Kitco Forum ) in this

paper-pyramid-economy-is-OK-by-me world? God only knows the World Gold Council is doing a miserable

job of propagandizing gold's merits. So, what crime exists in allowing a preponderance of goldbug intellectuals to

present their views over a non-mainstream internet site such as this and offer some token resistance to the mountain

of anti-gold nonsense out there?

Balance...schmalance.

I welcome anti-gold exponents to post on this forum...I beg them to do so. However, be warned...there are those

here ( myself included ) who will dispute your anti-gold logic until it crumbles into the nonsensical gibberish it really

is. If that should happen and you run away, crying to mama, then do not blame us!! Furthermore, let no other

Kitcoites scold those of us who take no prisoners in such argumentation either.

The pro-gold/anti-gold schism is not a mere dialectic...it is nothing less than a cultural war. Despite the ostensible

appearance of pandemic prosperity, this country is at war with itself. Anyone who would deny this is viewing the

world through blinders.

There are many in this world and on this forum who have built their houses upon foundations of gold and

silver...who clothe their families out of the fabrics of gold and silver...who feed their families from plates of gold and

silver...so...

...when you come on this forum and declare that these metals are effectively worthless...or headed to the dustbin of

history...then you might as well be a rapist who breaks into my home. I will shoot you...I will kill you...I will rip off

your ears and gleefully watch you bleed to death on my floor.

Thanks.

F*

Is this really the way you believe discourse on this site should be conducted? Please, before you start again, read back over time. Take a good, hard look at what you're supporting.

Haggis has stopped posting, and we're likely to lose RJ too. As you like to say bad driving out the good. Only I see it quite differently.

Promey

I hope that you realize that RJ's input is much more useful to this site than my posts or your posts -- you must be honest about that. You do not have the resources that RJ has. And neither do I.

I will not support you if you do not compromise in this matter. Think about it. If your advice was followed by everyone on this site, everyone would be 100% invested in gold and gold stocks, and regretting every minute of it. The real world is much more complex than the world you see.

What really worries me is that the rising US dollar will have deterimental effects on other parts of the world that are still stable.

I think more and more that the Communist Chinese leadership is hanging on to a growth dream that they cannot achieve. Boom and bust is their history, and the bust is about to hit, with associated turmoil. After the dust settles this time -- within a year or so -- I would guess that China will start to recover. It is possible that China will recover much faster than Japan.

http://quote.yahoo.com/?u

http://quote.yahoo.com/m3?u

http://biz.yahoo.com/finance/980615/markets_eu_1.html

http://dailynews.yahoo.com/headlines/upi/story.html?s=n/upi/98/06/15/international_news/stkskorea_1.html

http://news.bbc.co.uk/hi/english/world/europe/newsid_112000/112701.stm

Nice day today, BBML. Going to enjoy it.......

Platinum:

Ouch

The trip was fantastic. Still have my sea legs and the room seems to tilt to and fro, but the effect is slowly wearing off. Killed 'em at the seven card stud table. The dealers and pit bosses were either Aussie or Romanian. I LIKE those Romanians..... Smooth, almost translucent skin; eyes like chips of blue ice; the oddest mixture of Romanian and British accents that had me hanging on the most mundane of sentences just to hear words pronounced that way. The wine was extraordinary, the full moon cast a silvery spear at our ship every night. Fine Cuban cigars with 30 year old brandy on the deck at 2 AM on a sultry overnight on the Sea of Cortez on a brand new ship with nary a scratch or bit-o-rust to be seen.

The mind is clear, the soul is rested.

This does not mean I have become a carpet. I will not be trod upon.

Learned some info on gold that is modestly bullish.

Later

The gain from a 127 Yen to 147 Yen slide is 15.75%, now throw in some meager interest and you have a +20% gain backed by the U.S. Gubament...

OK, that being said, get the darts out, pick some numbers, start throwing darts.... :- ) )

I'm not sure if this has been posted previously.....a good read.

Global Intelligence Update

Red Alert

June 15, 1998

Collapse of the Yen Places China in a Precarious Position

Those of you who have subscribed to STRATFOR's Global Intelligence Update

for a while, or who have perused our archives, know that we have been

extremely negative about the Asian economy since 1996. Our predictions

concerning Asia have come true, thus far, save for one. We have argued

that the final Asian domino to fall would be China, and that the collapse

of China's economy would signal the beginning of the second phase of the

Asia saga, as the focus turned from economic disaster to the political

consequences of that disaster. Those consequences would include both

internal and regional political realignments that would redefine both East

and Southeast Asian politics and the global system as well. Thus far,

China has struggled successfully against this fate. Last week, its room

for maneuver narrowed dramatically.

As with most events in the current Asian crisis, China's problem began with

Japan. Japan's problems began when they reported that the Japanese economy

had contracted in the last quarter. Japan's slide into recession was

devastating news for the Japanese government and the permanent bureaucracy

that controls the Bank of Japan. The BOJ had been holding interest rates

at next to nothing. The reason had less to do with stimulating the

Japanese economy than with providing Japan's ailing industries with enough

cheap money to keep going. Low interest rates placed substantial pressure

on the yen, as Japanese corporations unloaded yen in favor of other

currencies. This weakened the yen, which is precisely what the BOJ was

hoping for, since it reduced the cost of Japanese exports, thereby

increasing exports and postponing the day of reckoning. Postponing the day

of reckoning has become the sum total of Japanese economic policy.

The one bit of good news that was supposed to come out of all of this was

that the Japanese economy would grow due to increased exports. Instead it

contracted. There were two reasons for this contraction. First, Japanese

exports into Southeast Asia were slashed due to that region's economic

collapse. Second, the importer of last resort, the United States, is

undergoing an unprecedented economic renaissance in both productivity and

creativity. Japan, which has not been in a position to reinvest in its own

economy due to economic problems going back to 1991, has an aging

industrial plant that simply can't compete with American products,

particularly in the American market. Although the Japanese continue to be

able to compete on price, the vast difference in quality between Japanese

and American products simply isn't there any longer. Moreover, the most

dynamic sectors, such as software and biotech, are simply beyond Japan's

capacity to dominate or even seriously compete in. Thus, its primary

market, the United States, responds to low priced goods which have minimal,

if any, profit margin, while Japan's secondary market, Southeast Asia, is

unable to buy anything compared to what it purchased last year. The

result: Japan is in a depression, dispensing with the circumlocution of

recession.

With this realization, Japanese and foreigners holding yen frantically sold

them last week, driving the price down to levels that haven't been seen in

seven years. This is not a temporary phenomenon. With interest rates at

virtually zero, a contracting economy, difficulty in profitably penetrating

the U.S. market, and a vanishing ASEAN market, who in their right mind

would invest in Japan? Moreover, there are no obvious solutions. The Bank

of Japan could raise interest rates to attract foreign investors, but

higher interest rates would trigger a wave of bankruptcies among second

tier companies that are barely holding on, in turn triggering a new banking

crisis, and so on. Japan could stimulate the economy by encouraging

domestic consumption, but that would cut the savings rate, destabilizing

the banks once again. So, unless the United States decides to buy yen,

there is little to raise its value. And the U.S. doesn't mind the weak

yen, as it causes massive inflows of money into the United States, thus

helping to maintain U.S. capital formation.

All of this puts China in the cross-hairs. The Chinese yuan and the Hong

Kong dollar are the only major currencies that have not readjusted to the

new Asian reality. It has been the absolute policy of the Chinese

government not to devalue its currencies. But with the yen at 144 to the

dollar, the pressure on the Chinese to devalue has become irresistible.

The ASEAN collapse has already slashed Chinese exports. With the yen's

collapse, what little market share Chinese exports to ASEAN retained is

being destroyed by now cheaper Japanese goods. Moreover, with the Japanese

forced into a price-based export surge into the U.S. market, they are in a

position, along with the ASEAN countries, to place tremendous pressure on

Chinese exports into the world's largest and most dynamic economy.

Indeed, with the yuan unchanged and the yen down, the Japanese will be able

to increase their exports to China itself.

Price had been one of the great advantages that China enjoyed in the global

economy. Maintaining the value of its currencies at pre-collapse levels

has effectively undermined that advantage. Thus the key question: Why have

the Chinese remained so stubborn about maintaining the yuan and HK dollar

at irrationally high levels? Why not devalue? Since an export-based

economy has been a cornerstone of Chinese policy, resisting devaluation

appears to be irrational in the extreme. Since the Chinese are rarely

irrational, it is necessary to look beneath the surface for an answer.

The key, we believe, is the fragility of investment in China, including not

only foreign investment but domestic Chinese investment as well. The focus

here is on Hong Kong, which is the financial interface between China and

the rest of the world. By holding the yuan steady and keeping the HK

dollar pegged to the U.S. dollar, China has limited what it dreads the

most: capital flight. One of the things that shattered ASEAN economies and

which prevents Japan's economy from recovering is the constant flight of

money to foreign economies, and particularly to the United States. China

has already seen some of this. Its strategy has been to stem the tide by

creating confidence in the markets. The key to maintaining confidence is

to maintain the value of the yuan and the HK dollar. In order to maintain

their value, it must maintain confidence. And so on, in an endless cycle.

The cycle, in the end, depends on reality, but the reality has a

psychological component. China has tried to create a reality of a robust

economy immune to the problems faced by the rest of Asia. Part of this

strategy has been political. Clinton's upcoming visit to China is a

crucial link in this process. Clinton, in a speech before the National

Geographic Society this weekend, explained that good relations with China

are critical because, after all, China has maintained a 10 percent growth

rate, on average, for the past 20 years. In other words, China is a

powerful economy that needs to be treated with respect. Apart from the

geopolitical benefits of this viewpoint, Clinton reinforces the psychology

China is trying desperately to maintain.

But the premise of Clinton's assertion is that a high growth rate denotes

power. In fact, there is no necessary correlation between growth and

health. Anyone willing to sell below cost will have a high growth rate,

until he goes bankrupt. That is what happened to Japan. China's high

growth rate does not mean that it has had profitable growth. Japan's

problem, prefacing China's by about 8 years, was that it had magnificent

growth, but the lowest rate of return on capital in the industrial world.

The result was short term growth rates that were astronomical, followed by

economic collapse.

Consider: The rest of Asia has had a massive economic collapse. Yet the

Chinese are claiming that they will be able to achieve 8 percent growth in

1998, just as they had before. That seems to be an impossible feat. Now,

all Chinese economic statistics are to be taken with a grain of salt, but

we believe that China will achieve 8 percent growth in production in 1998.

The reason can be found in an example cited by China's Xinhua News Agency

on May 25. Xinhua reported: Despite growing demand for nice suit from the

nouveaux riches men, the domestic supply of suit has far outstripped the

market demand, today's China Daily quoted the China National Garment

Association as saying. According to Chen Ling, an association official,

China last year turned out more than 10 billion suits, half of which were

exported, but only 13 million suits were sold in domestic market. As more

and more suits are stockpiled in the warehouses, production costs of many

enterprises are growing rapidly, which has led to the rising price of

suits, she pointed out.

In other words, the Chinese have FIVE BILLION suits sitting in their

warehouses, priced beyond the reach of the Chinese market. They are also

saying that they sold five billion suits last year, without selling more

than a few million in China. We have confirmed this figure from other

sources, but we still find it absolutely astounding. Indeed, we have to

believe that this number is exaggerated. Either way it is bad news for

China. If the number is correct, then it means that the garment industry

has produced itself to oblivion. If the number is lower and there are

only, for example, five million suits in warehouses, it still means that

they are overproducing. It also means that Chinese economic statistics,

like Chinese suits, are not always made of the finest fabric.

It is in this context that we should take the report by the Chinese State

Statistics Bureau last week that production in China rose by about 8

percent over the same period last year, and nearly 1 percent over the

previous month. China is producing and, if need be, it can sell what it

produces. What is not clear is that it can sell what it produces at a

profit, or if it can even break even. In other words, the Chinese are

suffering from the Japanese disease, in which growth has psychological

value at the same time as it undermines economic well being. Thus, the

Chinese are trying to hold up the yuan and Hong Kong dollar to maintain the

illusion that they can escape the Asian disease. Their theory s that, if

enough people believe that China is invulnerable, there will be no capital

flight. If there is no capital flight, eventually there will be an inflow

of capital. If there is an inflow of capital, everyone will forget about

the old suits sitting in warehouses.

The key to this is psychological. The Chinese are desperately trying to

portray themselves as the equals of the United States in dealing with the

crisis. George Bush was in China last week announcing that the Asian

crisis will be short-lived. Clinton is heading there next with the same

message. Both are creating an aura that is absolutely essential to China's

well-being: that China is a vibrant, functioning economy, that can work

with the United States in reviving Asia. The Chinese have indeed played

this brilliantly.

Unfortunately for them, the yen collapsed last week. China is overpriced,

overproducing and over the barrel. The lowered yen has created

overwhelming pressure to devalue. The psychological game cuts both ways.

Having worked to create the illusion of invincibility, devaluation will

reveal that the emperor has no clothes. The Chinese began a campaign last

week placing the blame for the yen's rise on Japan and demanding that the

U.S. do something about it. Thus, China's next ploy will be to portray

devaluation as a defensive measure against American indifference and

Japanese predatory behavior. But it will be a feeble ploy, officially

believed only by those Western banking houses that have led their clients

into disastrous investments in China.

We believe that the Chinese game is about up. The next question, as in

Indonesia, will be political. What will economic contraction mean to

China's domestic and foreign policies? That is an interesting question, to

be posed after this one: What will Japan's economic collapse mean for its

domestic and foreign policies?

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European markets down substantially across the board

http://quote.yahoo.com/intlmarkets

US Dollar up to 146.30 Yen and 181.50 Dmarks. US yield curve is almost absolutely flat from 2 to 10 year with 30 year yields at all time lows.

It's going to take some doing for the US market to hold up in the face of this.

I am inclined to put more faith in Ed Dames and TRV than Scallion's visions. Dames's predictions of super lethal solar radiation have made me a little uneasy. His track record is much more credible, IMHO.

G'Nite all! sharefin -- Looks like Ping II is still in control. Hope your foul weather gear is out.

My Mexican puts will do fine unfortunately, also.