¥en, Swiss, Mark are OVERBOUGHT.

What to hold over the looooong weekend. Decisions.......

Gold?

Equities?

Bean&Cheese Burritos?

Friday will prove to be fun fun fun till daddy takes the T-bird......

AWAY!

Éß

Hey Oldman! How did Jake B. do this week Count 'em up! Cha-Ching!!!!!!!$$$$$$$$$$$$$$$$$$$$$$$$$$$

go gold

http:

//search.washingtonpost.com/wp-srv/WAPO/19980903/V000921-090398-idx.html

Kapex: Good advice. Short format only for everyone.

All: This is the most jammed I have ever seen Kitco this time of night. Says something, doesnt' it? Tomorrow it will be impossible. But -- I think we all know what to do -- if the right moment arrives.

Gollum -- I think we will all have to imagine your flight tomorrow in more ways than one!

G'Nite all! Sorry about the multiple posts bouncing in the Aether.

The fighting and spitting doesn't make much sense. RJ, LGB, and many others point out the obvious fact that gold as an investment has been poor. It really isn't an investment, unless you are buying stock in a mining outfit. ( I am ignoring all of the fiat money driven derivatives )

In a system where gold is the money, the gross inflation of the money supply could not happen, save the rare instances of large discoveries of gold in the ground, or from looting civilizations that have no trade with the home money supply.

This last case mercifully no longer applies, except possibly by war.

The first case cannot approach the depradations of the inflationists of this century.

To look upon a medium of exchange as something to hoard, is close to miserliness. Money isn't a be-all-to-end-all, it is simply a measure of exchange.

I want the stuff that gold can buy, not the gold.

It's just that the gommints devalue any medium of exchange so that they can have more without producing anything of value for the money.

Gold is there to keep the gommint honest.

Now that the dishonesty is a crecendo that rolls around the oceans, we don't want your gommint paper, we want real money.

I am looking at a graph of the purchasing power of the US dollar, versus gold, from 1792 ( in the USA ) . There is a 45-60 year cycle, deflationary and inflationary in both the US dollar and gold, until about 1920 ( no surprise, since the US dollar was on the gold standard for most of these years ) . This gold/dollar cycle caused a variation invalue of both gold and the US dollar, both of which went up and down together from $0.50 to about $1.20, with 3 well defined complete cycles. But, around 1930 ( as we know ) FDR started the inflation of the US dollar, but that 45-60 year up/down cycle in gold remained. We are apparently now on the downside of one of these gold cycles. Bottom soon I would guess, with next peak about 2010-2015.

But -- what is the problem? The US government/FED, in its infinite wisdom, has decided to inflate the US dollar. If it was worth $1.00 in 1930, it is now worth about $0.09 in 1998. But -- the price of gold has oscillated stably above and below that $1.00 price since 1792 or so. Not any more for the US dollar.

Another way of looking at this is that that $20 gold piece that you undoubtedly have is now worth $280/oz ( spot gold price ) plus whatever numismatic value it has. Now, doing the math, I get: $1.00* ( 20/280 ) or $0.07. Coincidence? When the purchasing power of gold cycles back up, will the US dollar go with it? I don't think so.

So -- which would you have? The paper dollar, which has been inflated steadily by the FED every time we are threatened by recession, or gold, which is now worth more than ten times the current value of the US dollar? Do you think the FED has stopped inflating the dollar?

Now, you will say, this is meaningless, because wages have spiraled up to meet the dropping value of the dollar. Well this is true, but what if you had just held on to those hard earned gold coins that your grandparents had saved, and just spent paper dollars instead? Think of how much better off you would be, wealth-wise.

Now if you argue about monetary growth, economic stimuli, monetary velocity, etc., I would agree that the US dollar has advantages over gold. We would not have had as much economic growth as we did over the years if we still had a firmly gold-based currency. But -- this was something like Pandora's box -- we got the downside of inflation to go with all the good things. And -- when all of this fiat currency stuff finally implodes, there will be alot of angry people that will want to go back to that old system because it cannot be corrupted -- like the crooked Roman politicians who demanded payment in gold, and paid out in worthless currency. As I'm sure you know, it was the Holy Roman Empire that outlasted Rome by nearly 1000 years, in large part because they did not inflate or otherwise corrupt their currency.

How about gold stocks? Well, as you know very well, for every dollar gold goes up or down, gold stocks go up or down about 3 dollars. I doubled my investment money during that one year gold bull in 1993 just by investing in gold equities.

And, that was despite the fact that we were in the long-term downside part of the gold cycle. I didn't know that at the time. Do now. But I still don't understand how to define this gold cycle better.

One more thing about equities. If you correct the US stock market for the effect of inflation ( real gains in investment ) , you will find that in over 100 years or so you have done little better than inflation if you just bought and held.

How does one maximize profits? Buy equities during times when there is little inflation, and gold stocks when there is. Anyone who did this would certainly do better than the buyer and holder of gold equities alone, or general equities alone. Wish I understood this in 1975 when I was still wet behind the ears. I'd be a millionaire now -- probably just from investing in the 1975-1980 gold bull. The profits from the equities markets during the last 20 years would have been extra.

http://www.nandotimes.com/nt/images/swissair.html

Kapex, you may have to type in $indu and change the time to 60

rb

Pre-labor day in the US is usually upbeat, so the limp behavior of the markets is very disturbing. So -- playing the odds, I would expect another downswing in the markets next week. Therefore I would suggest to all that you should keep your powder dry -- not too much in gold equities, please -- because this current mini-gold rally may be a brief one. What is far more important than making money in this rally is the realization that the anti-gold tide is receeding.

We are going to have plenty of opportunity for gold investment profits -- soon. But we certainly don't want to get caught in the downdraft of all of those margin calls, etc. that may materialize over the weekend.

normal state of affairs. But something new has been added. Gold rose

$US 5.

That move, to $US 286, simply puts Gold back to about where it was a week

ago, in $US terms. But Gold is NOT back to where it was a week ago in

terms of most other strong currencies, notably the D-Mark and Yen.

While the Dow has weakened, so has the Dollar. With the expectation

growing that the Fed will lower U.S. rates, the safe haven stampede

into the U.S. Dollar from the rest of the non-European world shows strong

signs of turning around.

There is no doubt in our mind that the U.S. stock market is in a

confirmed bear. We do not yet have sufficient technical evidence to call

either a top on the $US, or a bottom on Gold, but the evidence is

mounting.

The Privateer has posted up to date charts of the U.S. and Japanese stock

markets, which show a remarkable correlation ever since the June 1998

joint intervention by the Fed and the Bank of Japan to prop up the Yen.

We also have updated our Gold pages, including the very important Gold

charts in foreign currencies ( D-Mark, Yen, $A ) .

If Gold gets above $US 290, and/or above $A 500, I will commence to become very interested indeed.Don't have sufficient evidence yet to call a technical bottom - in $US or D-Mark terms. Gold bottomed long ago in $A terms.

PS Watched the Yeltsin/Clinton press conference last night. Ouch! I have seldom seen a performance, from both men, more likely to spook investment markets everywhere. Rubin and Greenspan have their work cut out for them.

Collapse of the Russian economy and political instability in

the halls of the Kremlin indicates a terrible upheaval may

take place in the near future.

Russia has traditionally turned to radical answers to

internal problems. There may be a return to communism

that will totally disrupt the current world power structure.

This is exactly the type situation Anatolia Golytsyn warned

would happen.

Couple all this with the President in Moscow, the clamor to

impeach Clinton, the planned attack upon Iraq by the

United States, economic collapse of the major world

markets, a major war looming in the Middle East, the

threat of major terrorist attacks, and we have a possible

scenario for World War III.

American investors are in for a bumpy ride. The

deteriorating situation in Russia is guaranteed to cause

another major plunge of the Dow on the New York Stock

Exchange.

**********************************************************

10:00 Q2 UNIT LABOR COSTS UP 3.9%.

10:00 Q2 MANUFACTURING PRODUCTIVITY REVISED TO 2.5%.

10:00 Q2 NONFARM BUSINESS PRODUCTIVITY REVISED TO 0.1%.

09:45 MEXICO PESO SINKS FURTHER, OFF TO 10.10/10.14 PER DOLLAR.

09:44 DOLLAR FALLS LOWER, OFF TO 133.03 YEN, SINKS TO 1.720 MARK.

09:34 YELTSIN READY TO ALTER LAWS TO GIVE GOV'T MORE POWER - REUTERS.

09:21 DOLLAR FALLS AGAINST MARK ON SOROS SELLING - DOW JONES.

09:20 DOLLAR OFF VS GERMAN MARK, SINKS 1.6% TO 1.722 MARK.

09:20 DOLLAR SINKS VS JAPANESE YEN, OFF 2.2% TO 134.75 YEN.

http://www.stocksite.com/features/contrarian/rap/

( Go to As I see it section at bottom of page ) Welcome aboard Bill!