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ARCHIVED DISCUSSION FROM 11/17/1999
All times are U.S. Mountain Time
View Yesterday's Discussion.
Jake
(11/17/99; 23:42:21MDT - Msg ID:19332)
@USA Gold
Got it today. Donovan gives new life to Eldorado. EAP never sounded so good.....Haunting. Thank you very much for the referal.
Jake
The Stranger
(11/17/99; 23:15:52MDT - Msg ID:19331)
Willo, You Wiley Warthog, You
Good Show! Thanks for bringing me out of the darkness and into the light. One fine point, however: While Buffett did buy a lot of silver last year, and he does tend to invest for the long term, I don't believe he has lately confirmed publicly that he still has the position.
No matter. It is a pleasure to learn the current thinking of someone whose judgement and experience are so widely revered.
Black Blade
(11/17/99; 22:41:27MDT - Msg ID:19330)
and you thought it was only Don Quijote who had a penchant for windmills
Y2 Krazy
Texas authorities are investigating a rash of windmill thefts -- and suspect the disappearances are related to the Year 2000 computer bug.
Two windmills disappeared last week from ranches near Dallas, including the 24-foot tower that held up one of the units. Authoritiessuspect that demand for non-power equipment, such as windmills and hand pumps, is being driven up by people worried electrical utilities will let them down when computers roll over to the year 2000.
``I've sold two hand pumps in 20 years,'' said one farm equipment supplier. ``Today, they cost about $650 and you have to get on a 16-weekwaiting list just to order one.''
``It's a bumper year for windmills,'' he told the Fort Worth Star Telegram.
It's a bumper year for canned food, too.
Del Monte, the country's largest producer of canned fruits and vegetables, said it may sell 1 million to 2 million more cases of goods because of Y2K fears, according to the company's latest quarterly financial statement filed with the U.S. Securities and Exchange Commission. Each case holds from 12 to 48 cans.
That's a lot of green beans and pineapple, but the increase is a sliver of the 100 million cases of canned food Del Monte sold last year. DelMonte representatives were careful last week to note that the company isn't forecasting year-end panic buying and mass hoarding.
Although most people think Y2K won't be much to worry about, they're still not taking their chances. A recent nationwide survey of U.S.residents found that:
20 percent will have access to a generator or other utility alternatives.
12 percent will avoid elevators.
9 percent will avoid public transportation.
7 percent plan to leave the metropolitan area they live in altogether.
6 percent will store guns, ammunition and other weapons.
3 percent will avoid driving their cars.
-- Compiled by Tim Nelson, staff writer
TownCrier
(11/17/99; 21:24:34MDT - Msg ID:19329)
After the Close: the GOLDEN VIEW from The Tower
Yesterday, the inhabitants of Wall Street were largely relegating inflation to the history books. my, how quickly sentiment can change, especially when surging oil prices act as a less-than-subtle reminder, equivalent to a 2x4 upside the head. More on oil later. Stock traders are still dizzy from these heights and barely able to sort things out. But the bond traders demonstrated again their better grasp on reality and had no difficulty spending the day in follow-through to the sell-off that started yesterday upon the realization that the Fed's comments were more substantially cautionary than a neutral bias would belie.
BONDS...BONDAGE...(same thing)
Jerry Lucas, government bond strategist for Merrill Lynch, told TheStreet.com, "The statement was much more hawkish" (than the one issued with the August rate hike.) "It really seems like Greenspan is a man on a mission, and it's probably going to take more than a 5.50% funds rate" (to bring the growth rate down to a level that doesn't pressure the supply of available workers.) Marcello Frustaci, a senior vice president at Daiwa Securities, echoed these perceptions to Bridge News : "I think a more thoughtful reading (of the Fed comments) comes out a little more hawkish." While he felt today's October consumer price report was "okay," he said "the housing market continuing to boom along, not really being slowed by rates" as revealed by October housing starts.
The overall CPI and the "core" rate (excluding food and energy prices) both rose 0.2% in October, in line with analysts'
expectations. More worrisome was the report for October housing starts which rose (0.1%) to a 1.628-million-unit rate, while experts were looking for a decline to a 1.595-million pace. Further, the revision to September housing starts altered the original report of a 3.2% decline to a decline of only 1.8%. The indcator of future housing growth, building permits, climbed by 5.2% which was above expectations.
With that in the background, the 30-year bond sold off another 31/32 in price, propelling the yield to 6.131%. Adding to the weakness in US Treasuries was competition for demand in the form of supply from Lockheed ( $2.5-billion of 6-, 10- and 30-year debt) and Freddie Mac ($2 billion of 30-year notes).
STOCKS...STOCKADE...(same thing)
Barry Hyman, chief market strategist at Ehrenkrantz King Nussbaum, offered these thoughts to TheStreet.com, "Psychology equals momentum on the Nasdaq and it gets absurd once in a while and becomes problematic short-term -- that's what's happened. Any correction is certainly manageable and will be contained to 3% to 5%. I don't look at it as a problem." The Tower naïvely wants to ask: Since when is the performance of a free-market stock exchange something to be "managed" and "contained"? It's like their not even attempting the free-market illusion anymore.
The most remarkable event of the day was the trade volume on the Nasdaq exchange shattering the previous recent record by a wide margin... 1,653,533,000 shares traded hands. On this generally downbeat day for stocks, the Nasdaq Composite Index "managed" to shed only 26 points (-0.79%), while after very volatile trading, the DOW lost 49 points (-0.45%) with NYSE volume of 960,070,000. On the Big Board, decliners outpaced advancers by a 3:2 ratio, new 52-week lows besting new highs 131 to 100. On the Nasdaq, decliners edged out advancers 2,141 to 1,911, but new highs came out on top 238 to 81.
CURRENCIES...CREATIVE ACCOUNTING...(same thing)
The euro lept to a six-day high against the dollar on what traders attributed to short covering. The surge was reportedly started on rumors of European Central Bank intervention stemming from an article in Germany's Handelsblatt. The article was itself a market commentary that simply made note of rumors that the "ECB was prepared for intervention at a rate of 1.0300." Given all that we know of the ECB's method of operation, that seems unlikely, and we agree with the comment of a chief dealer reported by Bridge News: "The catalyst for the rebound was an article in the German press, but the idea the ECB buying the euro is laughable." In case you weren't aware, the ECB policy has been "Hands Off: Let the Markets Decide."
The euro refused for 4 days to stay below the $1.0300 level, and today bounded considerably higher...gaining nearly a full cent. The euro closed at $1.0407, up 0.98¢. The dollar also lost ground against the yen, losing 0.41 yen to close at ¥105.52 per dollar.
GOLD...GOLD... (only gold is good as gold)
From the World Gold Council PRESS RELEASE:
LONDON - Gold demand continued to grow in the third quarter of 1999, rising 22% from the corresponding period of last year. Demand in the countries monitored by the World Gold Council [estimated at four-fifths of total global demand] was 877 tonnes, a record for the third quarter and a new all-time high for any three-month period, 8% above the previous peak set in the second quarter of 1999.
The WGC indicates that low prices and economic recovery lifted worldwide jewellery demand by 22% and investment demand by 19% over the third-quarter last year. Some individual quarterly stats to give you a sense for global appetite for gold from the latest issue of the World Gold Council's quarterly survey Gold Demand Trends:
(Values are for the third quarter...July, August, September)
Pakistan registered the largest growth rate, up 102% at 32 tonnes.
India, the world's largest gold consumer, saw demand increase 38% to 241 tonnes.
South-east Asia and South Korea demand was up 70% to 95 tonnes.
Middle East demand increased by 18% to 116 tonnes.
Demand in Japan was up 64%, and in North Asia up 30%.
And on the homefront, third-quarter demand in the United States was unchanged from the third-quarter record it set last year at 118 tonnes.
OK, so you're asking the natural question, what next? It is easy to assume that much of this record demand was spurred on by the 20-year low prices that bottomed in August and that all changed with the post-Washington Agreement rebound at the end of September. In the New York and London presentations by WGC staff George Milling-Stanley and Tom Butler to officially launch the latest quarterly survey, Gold Demand Trends No. 29, they tackle this same question. Let's listen in to this portion of their remarks...
"Looking forward, we are not expecting a dramatic decline in gold demand in the future. That said, there could be some slowing down during the fourth quarter of this year. The shock of the price rise following the Washington agreement caused demand to fall sharply - or even dry up entirely - in several countries. That is hardly surprising in the circumstances, with the price jumping by 35% from the 20-year low of around $250 reached in August to a high close to $340 in October. Consumers always take a while to adjust to sudden changes in prices. (It is also worth pointing out that demand was extremely healthy for three years in a row from 1994 to 1996, when prices were averaging over $380 an ounce.)
+
It was with all this in mind that I asked some of my colleagues in the field for any information they could give me about developments in their regions since the start of the fourth quarter.
+
There is no doubt that the higher prices, and perhaps equally important the greater volatility, had an impact on gold demand in India over Diwali, the most important festival in the Hindu calendar. Similarly, there was a decided slowdown during October in the Middle East. However, I am assured that people are already beginning to adjust, and the outlook for both India and the Middle East for the remainder of the year is good, especially because of the Indian wedding season over year-end, together with some important festivals coming up in the Muslim world, especially Ramadan, due to start on December 9.
+
Moving on to Asia: many people expected gold imports into Taiwan to fall in October. After all, September's earthquake, measuring 7.8 on the Richter scale, toppled 13,000 buildings and killed 2,200 people. There is bound to be some impact on the economy from devastation on that scale, and that is quite apart from the higher prices coming as a result of the Washington Agreement. In fact, October gold imports into Taiwan were up 13%, bringing the year to date level to 39% above the same stage of 1998." That Taiwan evidence for October is nothing short of remarkable!
FWN reports from London that the gold market got an early boost from improved physical demand and short-covering. In NY, while December futures gained 40¢, spot prices said "Watch me" and climbed 80¢ to $294.60 as the last quote of the day.
Bridge News offered:
"Gold continued to build on recent gains and settled up 40c at $295.70
per ounce after reaching $297.60, its highest level in 6 days. Buying
could be in anticipation of the UK's next gold auction on Nov 29, noted
George Milling-Stanley, analyst at the World Gold Council. The last
auction in September was well subscribed and was received as a positive
development for the market. Consequently, some players are betting that
the positive events of the last auction will be repeated, he said."
Today brought no change in COMEX gold inventories...though a check of their math reveals various addition errors among the Registered and Eligible totals. While COMEX lists a sum of 942,573 ounces, if you do your own calculations the actual sum is 945,674 ounces. Yesterday, Open Interest fell 575 to 64,089 contracts on December gold futures on volume of 17,077.
OIL...A TORCH THAT LIGHTS THE WAY (to higher prices)
The price of oil eventually affects the price of everything. To conclude that price inflation is in check, as Wall Street is wont to do, would seem misguided. Trading of crude futures on the NYMEX came within a whisper of the highest levels ever seen since the Gulf War, trading as high as $1 before settling for a 90¢ gain at $26.60. The market was supported by weekly inventory data, and production disturbances from weather and social disturbances. Following yesterday's API data showing a 2.5 million barrel decline in crude inventory, this morning's contradictory data of a 1.8-million-rise in crude stockpiles was shrugged off in light of decline in products inventory and expected disruptions. FWN quoted one broker's reaction to the market: "It's an incredible rally. If someone had told me that you were going to see $26.00 a year ago, I would think he was crazy. We haven't seen this kind of market in years. We're approaching 9-year highs." Another broker testified to the resiliance of this market, "I think you're going to see (participants) squeezing the Dec contract a bit more before the market comes off. But there is a chance it could come off late in the session Thursday. But even if we come off $1.20, we would still be a raging bull market."
And that's the view from here...after the close.
Scrappy
(11/17/99; 21:20:26MDT - Msg ID:19328)
I got one!
Not sure how to provide the link so it'll work, but,
"Inddia Gold Scheme" by Sunil Madhok, at Gold Eagle Editroials, 11/17/99. A new one! I can be useful!
Ray Patten
(11/17/99; 20:48:06MDT - Msg ID:19327)
Yesterday, I called my electric utility and....
told the receptionist that I was a customer and that I had a Y2K question. She connected me with the Y2K guy and I asked him how fast they could disconnect from the national electric grid if it looked like trouble. He told me 3 interesting things:
1. All their empoloyees would be working that weekend. Their contigency plan was to moniter the east coast and if there was any trouble to disconnect from the national grid and form a northern midwest grid.
2. They have been stockpiling coal and had enough to last the winter.
3. They are most worried about the malitary groups who may want there to be a problem on 1/01/00. The plan was to have employees and local law enforcement people at every sub-station in the area.
This last area of concern is new to me. I have been reading 3 Y2K newsletters for 2 years and they have not mentioned anything about the potential of this kind of terrorism.
It may be wise to call your local electric utility to see if they have anything to say about this threat.
There is going to be a made for TV movie Sunday night on NBC on Y2K, so it may be a good idea to call them before Monday.
WilloTheWarthog
(11/17/99; 20:41:40MDT - Msg ID:19326)
Mr. Buffet on the Stock Market (for The Stranger et al.)
http://www.pathfinder.com/fortune/1999/11/22/buf.html
Remember that he owns *a lot* of silver. You're welcome, Roger.
YGM
(11/17/99; 20:31:28MDT - Msg ID:19325)
Regressing to previous posts
Americans......
Comments made recently stirred my anger more than a bit.
Criticism of Americans by Americans is one thing but the same by outsiders rankles me. All I can say is (being Canadian) is that with "all and any" of its' many short comings the USA is still the most just and benevolent Nation on this planet. This world IMO would be indiscribable if it were not for the sacrifices made by its men and women in Military and
Humanitarian agencies. People who live in "Glass Houses"......................................YGM.
714
(11/17/99; 20:18:27MDT - Msg ID:19324)
Oro re: Kaplan
Thanks for your post.
Steve Kaplan is a trader. I'm an investor. He's short term. I'm long term. God bless him, I wouldn't want to be trading in these markets. That's Steve's home. I understand that now. I didn't when I first started reading his site. I didn't understand that when I first started buying gold. As a buy-and-hold investor, he is less than relevant to me, but I visit his site every once in a while. Like you, I glean what I can from his site...
The Stranger
(11/17/99; 20:18:11MDT - Msg ID:19323)
Willo
Hey, nice work! Now tell me where the Buffet article is (please), since I didn't know it even existed. Thanks, Amigo.
Twice Discipled
(11/17/99; 20:11:53MDT - Msg ID:19322)
A government of the people, by the poeple, enslaving the people
Does anyone here feel totally depressed?
I have learned so many things from this forum, that I otherwise would have remained in the dark about. THANK YOU ALL! Especially MK for providing this forum where we can learn about gold and the freedoms associated with it.
I am astounded that we the American people have allowed a privately held institution like the Fed to rape and pillage this country when the Constitution prohibits anyone, but the US government from coining money. Congress has no right to give this away without a vote to change the Constitution – The Fed is UNCONSTITUTIONAL. They have printed money out of thin air and charged us and our country interest on it. I was never really taught anything about the Fed while in school, public schools or private universities – I have been cast quite well in their mold until now.
After looking at the link posted here about the IRS and taxes, I am again astounded at how we have been manipulated to participate in a voluntary federal tax, by propaganda which has led us to believe it is mandatory, when in fact the Constitution prohibits a mandatory federal income tax. While the IRS is not unconstitional because as the law states it is voluntary, we have been duped.
I am ashamed of us in that we were once free and now are in shackles, but still think we are free. Can we not see that we are enslaved? The communists/fascists could not have done such a good job if they had invaded us.
Gold is the one thing which is FREE!!! From this tyranny – Do you have ANY doubt why they fight it so hard! Get you some!
The only question in my mind is what am I personally going to do about this besides load up on gold?
RossL
(11/17/99; 20:06:22MDT - Msg ID:19321)
Gandalf
Didn't Gollum control "the precious" for a long, long, time?? Glad to see you are back in control. <grin>
WilloTheWarthog
(11/17/99; 18:47:53MDT - Msg ID:19320)
Hey Stranger, here's that link:
http://www.forbes.com/forbesglobal/99/1115/0223099a.htm
...and another quote from the article.
"I would rather own, now, close to half the world's available gold than all the world's Internet companies."
This article plus Warren Buffet's article are going to bring in some big buyers that will make the next leg up happen. Better stay long, and get physical. This could be a wild ride any day now, when a larger segment of the general public gets in.
The Believer
(11/17/99; 17:37:21MDT - Msg ID:19319)
!!!
Whew!
We did take a spike today!
Must have scared the hell out of the shorts....
YGM...the Fed is full of crap and you know it...!
The Stranger
(11/17/99; 17:32:36MDT - Msg ID:19318)
canamami and Gandalf
canamami- the setback in POG this morning was nearly simultaneous with what was seen as a non-threatening CPI report in the U.S.
Gandalf- I'd say the Hobbits deserve an extra portion of mushrooms at dinner tonight.
megatron
(11/17/99; 17:32:09MDT - Msg ID:19317)
top ten
Finally, a ray of hope in this idiotic world. That must be an American poll because I can't believe that anyone in this socialist pig-sty (Canada) would even vote for Ayn Rand. I mean, they sent a lot of the old Lenin statues here, for Ch#$%t sakes!
Gandalf the White
(11/17/99; 17:04:21MDT - Msg ID:19316)
Oh OH !
LOOKOUT Aragorn III ! --- Townie has let the cat out of the bag! See what the sheeple are catching onto ? --
Books--Top 10 Titles
-------------------------------------------
1. The Lord of the Rings ~ J. R. R. Tolkien
2. Gone With the Wind ~ Margaret Mitchell
3. To Kill a Mockingbird ~ Harper Lee
4. The Catcher in the Rye ~ J. D. Salinger
5. Harry Potter and the Sorcerer's Stone ~ J. K. Rowling
6. The Stand ~ Stephen King
7. Ulysses ~ James Joyce, Morris L. Ernst
8. Atlas Shrugged ~ Ayn Rand
9. The Grapes of Wrath ~ John Steinbeck
10. 1984 ~ George Orwell
Author of the Millenium: J.R.R. Tolkien
Runner-Up: Ayn Rand
----
But do not worry Goldhearts, everyone knows that Gandalf still controls "The Precious", and this has to be good educational material and advertising for GOLD !
<;-)
canamami
(11/17/99; 16:35:28MDT - Msg ID:19315)
The Stranger, Towncrier -Thanx
TC: Thank you for pointing out the POG's price range today.
Stranger: I hope your call of $308 tomorrow is as prescient as your call of a bottom around $290; it would make for a happy day tomorrow.
The POG was up about $2.50 this morning, but was driven down just before opening. Does anyone have the background story - seemed like currency movements should've favoured a strong day for the POG.
TownCrier
(11/17/99; 16:18:18MDT - Msg ID:19314)
Sir cananmami
Looks like a mistake. Our source for COMEX December gold reveals a range of $294.50 - $297.60 ...settlement at $295.70 for a 40¢ gain. Spot gold price gained 80¢ today.
The Stranger
(11/17/99; 16:16:17MDT - Msg ID:19313)
canamami
A mistake, to be sure, unless, of course, the reference is to tomorrow's price.
The Stranger
(11/17/99; 16:13:44MDT - Msg ID:19312)
Marc Faber in Forbes
I just got around to opening my new "Forbes" and was delighted to see the full page piece (p. 248) by Marc Faber, recommending gold to Bill Gates, and, presumably, the rest of us.
"Forget antitrust-troubled Microsoft. Gold is on its way back as a store of value."
"I very much doubt that we will see gold prices fall below $280 ever again."
Stranger's Note: I tried to find a link for this but failed. Still, I am delighted when this sort of thing hits the mainstream press and thought others might like to be aware of it.
YGM
(11/17/99; 16:08:52MDT - Msg ID:19311)
China, US Cyber War
http://www.washtimes.com/news/news3.html
(Excerpt)
The FBI in May sent out a memorandum warning of Chinese-origin hacker attacks on U.S. systems, including White House, State Department and other government computer networks.
"Much of this activity traces back to Chinese addresses, and much of the reporting of this activity comes from official Chinese news sources," the FBI said in the memorandum sent to private security managers. The cyber-attacks followed the May 7 bombing of China's embassy in Belgrade and were viewed by some U.S. national security officials as possible government-sponsored information-warfare attacks on the United States.
William Triplett, co-author of a new book on the PLA, said the Liberation Army Daily article appears to be the first time Beijing officially acknowledged having offensive computer-warfare capabilities.
Mr. Triplett, a longtime China specialist, said the article on information warfare appeared shortly after a Chinese air force general's public comments last week saying China will take the offensive in air power.
"All of this offensive-warfare talk, when China is not threatened by anyone, shows that the dragon is at the point where it doesn't have to hide its claws," Mr. Triplett said.
In his book, "Red Dragon Rising," Mr. Triplett said Chinese information-warfare efforts were boosted after President Clinton relaxed controls on supercomputers in 1996. China has since obtained more than 600 machines. The PLA also uses Chinese students trained at American universities for expertise in the field, he said.
According to the book, China could launch a devastating computer-run sabotage operation by attacking U.S. oil refineries, many of which are grouped closely together in areas of Texas, New Jersey and California.
A PLA computer attacker could penetrate the electronic "gate" that controls refinery operations and cause fires or toxic chemical spills that would "cascade" to other refineries in the area, he said.
canamami
(11/17/99; 16:01:04MDT - Msg ID:19310)
Gold was at $308.00 today? _ amistake on mcri?
Mcri shows that December gold was at about $308.00 at one point today. Is that true, or a mistake on mcri?
TownCrier
(11/17/99; 15:56:32MDT - Msg ID:19309)
Tea leaves: Most IMM currency futures close higher
http://biz.yahoo.com/rf/991117/78.html
For only the second time since it began trading, the euro was the most active currency future contract traded on the International Money Market. The ECB had no comment on traders' rumors that the central bank was prepared to intervene on the forex market to support the euro at $1.0300. Meanwhile, Economist C. Fred Bergsten foresees the next major shift in global funds will flow in the euro's direction, expecting a 20% swing for the single currency.
TownCrier
(11/17/99; 15:44:07MDT - Msg ID:19308)
We haven't seen the end to Fed rate hikes...
http://biz.yahoo.com/rf/991117/65.html
A brief pause as some see through the euphoric haze...
"I don't think the market is right if it thinks the Fed is sitting on the sidelines for several months. They (the Fed) will look carefully at the labor data and inflation numbers in the coming months and come February, who knows?" --former Atlanta Fed President Robert Forrestal
And supporting the suggestion that bond traders might be a wee bit sharper than stock traders, we have this from primary dealer Warburg Dillon Read, "We don't think the 75 (basis points) hike in official rates in 1999 is sufficient to slow the economy because all it does is remove the easings of last year."
Yep. That's what we thought, too.
YGM
(11/17/99; 15:43:14MDT - Msg ID:19307)
F.W.I.W. Column.............
From P. 220 of "Harry Brownes" "You Can Profit From a Monetary Crisis"
Pub. 1974
From July 1, 1970 to July 26,1974 Gold rose from $35.00 to $158.00 p/oz an
increase of "339%"
Gold Stocks rose as listed---As per the exact same dates as above.......
Durban Deep..$1.88 to $30.25--+1,509%
East Rand Proprietary..$1.56 to $30.50---+1,855%
Harmony...+758%
Kinross.....+690%
Loraine.....+1,820%
Southvaal...+773%
Stilfontein....+1,036%
These above examples were drawn from Gold Stocks that were "NOT" on the
popular lists of Gold Stocks Advisers and Brokers. Of the ones that were
popular the only high flyer was Hartesbeestfontein at +1,283% The rest of
that list never rose above +400%. There's more but many of the Cos' listed are not readily recognizable names.......Now does anyone want to take the 1999 Advisors seriously???
.....Regards...YGM.
Usul
(11/17/99; 15:35:14MDT - Msg ID:19306)
Fixing Extra URLs in my last message
http://news2.thls.bbc.co.uk/hi/english/world/letter_from_america/newsid_21000/21126.stm
Unfortunately, it seems that to make the URLs in my last message (except for the main Link) work, you must cut and paste the whole URL (perhaps in more than one cut and paste, to get it all), and replace each occurrence of %5F with the underscore character "_"
TownCrier
(11/17/99; 15:31:48MDT - Msg ID:19305)
NY Fed's McDonough warns banks against Y2K fears
http://biz.yahoo.com/rf/991117/3b.html
In a speech, New York Federal Reserve Bank President William McDonough urged banks to be prudent in responding to customers' reasonable needs...
"By reasonable needs, I have in mind that banks should think twice about huge demands based on what seems to be customers' excessive concern about Y2K." He suggested that banks should "grant appropriate credit for realistic needs, even if this involves somewhat greater use of their own balance sheets than would usually be the case." He said the public and private sector would face "a challenging period" over the next several weeks.
Usul
(11/17/99; 15:24:53MDT - Msg ID:19304)
Oldsters
http://news.bbc.co.uk/hi/english/world/letter_from_america/newsid_152000/152817.stm
Greetings to you Sir Aristotle. The thoughts of people such as Galbraith, who have seen at first hand the building up and bursting of an almighty financial bubble, and who now see echoes of history, will be seen as greater wisdom in hindsight to come.
Still going strong, also, is Alistair Cooke (1908-) whose next birthday is on November 20th, and whose Letter from America may still be heard on the BBC World Service every week. The above link is a Letter from America on the Y2K bug.
The next one mentions the Crash of '29, and the present context:
"And the Nineties are the Eighties writ large - the difference is, they now disturb us because the unbelievable prosperity has gone on for so long it begins to frighten people"
http://news2.thls.bbc.co.uk/hi/english/world/letter%5Ffrom%5Famerica/newsid%5F48000/48854.stm
And here are some more, which mention familiar topics:
The Crash of 1873, 1929, '87, '97.....
"Over-production of goods, over-capitalisation of property and railroads and feverish speculation in all sorts of corporate enterprise (does it sound familiar?) brought the financial panic of 1873."
"All we can do is watch and wait..."
http://news2.thls.bbc.co.uk/hi/english/world/letter%5Ffrom%5Famerica/newsid%5F21000/21126.stm
Doves, hawks, owls and the people
http://news2.thls.bbc.co.uk/hi/english/world/letter%5Ffrom%5Famerica/newsid%5F306000/306856.stm
Black Monday panic attacks
"My friend, a kindly man, who loved everybody on earth but took a dim view of John Kenneth Galbraith"
http://news2.thls.bbc.co.uk/hi/english/world/letter%5Ffrom%5Famerica/newsid%5F166000/166372.stm
News off the back burner
http://news2.thls.bbc.co.uk/hi/english/world/letter%5Ffrom%5Famerica/newsid%5F189000/189090.stm
America may not be immune to the Asian Flu
http://news2.thls.bbc.co.uk/hi/english/world/letter%5Ffrom%5Famerica/newsid%5F39000/39837.stm
Would that I were as lucid when I am over twice as old as I am today.
TownCrier
(11/17/99; 15:19:52MDT - Msg ID:19303)
A good perspective, Sir ORO
Well said. Not everyone is fishing for the same trout in the stream, and that's not a bad thing.
ORO
(11/17/99; 15:05:59MDT - Msg ID:19302)
In Defense of Kaplan
He offers a conventional view of gold as commodity and inflation hedge. Nothing malicious there.
He does not consider manipulation on the grand scale we speak of as possible. Not considering the fact that the players in the market are very very short, he can only follow their actions. Nothing malicious there either.
The COT and correlated commodities he follows are good guidelines for trading paper gold in its various forms. The market and analyst sentiment factors he follows are solid predictors for the trader. Again, no problem.
So why is he getting goldbugs roused? Because we don't like what his conclusions are for the short term. I don't think that a trader thinking in $US and believing that contracts are honourable is anything but "normal" if somewhat naive.
Another point is that his outlook is short-term to intermediate - a few months.
I would add that he nailed the top on most gold shares perfectly. He is a trader. This is what he does. The hows and whys underlying the market are of no interest to him and he does well without them. At least for now.
I am happy to learn from him what I can.
JCS
(11/17/99; 15:01:03MDT - Msg ID:19301)
XAU
It acts sick!! Anyone have a thought about why its acting so badly given that gold is holding its own.
Looking at the volume on some of the SA's I was thinking maybe there's rotation out of one segment and into the SA's, but just a passing thought.
Thanks
TownCrier
(11/17/99; 14:58:46MDT - Msg ID:19300)
Forum related due to many references...The Amazon.com Best of the Millennium Poll
http://www.amazon.com/exec/obidos/subst/features/c/century/best-of-millennium.html/ref%3Dgw%5Fm%5Fce%5Fcol%5F6/102-8480738-9812807
As popular as J.RR. Tolkien and Ayn Rand apparently are at this forum of gold-hearts, it would appear that the rest of the world shares this affinity for these two authors. Could this be taken as an indication that the masses are just one small nudge away from joining us in our affinity for the precious golden metal? First, check out the top 10 list, then, check out the following choice for "Author of the Millenium."
Books--Top 10 Titles
-------------------------------------------
1. The Lord of the Rings ~ J. R. R. Tolkien
2. Gone With the Wind ~ Margaret Mitchell
3. To Kill a Mockingbird ~ Harper Lee
4. The Catcher in the Rye ~ J. D. Salinger
5. Harry Potter and the Sorcerer's Stone ~ J. K. Rowling
6. The Stand ~ Stephen King
7. Ulysses ~ James Joyce, Morris L. Ernst
8. Atlas Shrugged ~ Ayn Rand
9. The Grapes of Wrath ~ John Steinbeck
10. 1984 ~ George Orwell
Author of the Millenium: J.R.R. Tolkien
Runner-Up: Ayn Rand
Let the world take that last, tiny step...
John Galt
(11/17/99; 14:56:40MDT - Msg ID:19299)
Maryland Constitution - Your results may vary...
Art. 36. That as it is the duty of every man to worship God in such manner as he thinks most acceptable to Him, all persons are equally entitled to protection in their religious liberty; wherefore, no person ought by any law to be molested in his person or estate, on account of his religious persuasion, or profession, or for his religious practice, unless, under the color of religion, he shall disturb the good order, peace or safety of the State, or shall infringe the laws of morality, or injure others in their natural, civil or religious rights; nor ought any person to be compelled to frequent, or maintain, or contribute, unless on contract, to maintain, any place of worship, or any ministry; nor shall any person, otherwise competent, be deemed incompetent as a witness, or juror, on account of his religious belief; provided, he believes in the existence of God, and that under His dispensation such person will be held morally accountable for his acts, and be rewarded or punished therefor either in this world or in the world to come.
Nothing shall prohibit or require the making reference to belief in, reliance upon, or invoking the aid of God or a Supreme Being in any governmental or public document, proceeding, activity, ceremony, school, institution, or place.
Nothing in this article shall constitute an establishment of religion (amended by Chapter 558, Acts of 1970, ratified Nov. 3, 1970).
Golden Truth
(11/17/99; 14:52:27MDT - Msg ID:19298)
IS KAPLAN SHORT GOLD????????????????????
Kaplan reminds me an awful lot of Mr.Martin Armstrong. Same kind of negative drivel, but still camouflaged, i think he's hiding something! Could be he was/is short on GOLD also?. Why not everyone else was! right Mr Kaplan?
He seems to me to be a "play along boy" type, anything that makes him money, he probably invested in. This time the moron got his fingers burned to. Thats why he turned sour so soon. He's a lover of fiat money, not a lover of GOLD!
Like the rest of us who hold Bullion coins etc. This Kaplan guy is way to negative! for even me to read.
Something is rotten in "Kapland"(Denmark)
Netking
(11/17/99; 14:48:35MDT - Msg ID:19297)
Voyager
Voyager Sir (19296), I guess the word 'Bible' even in passing makes you glad, sad or mad depending on your perspective & where you're heading.
Despite the fact that this goes against our 'Bill of Rights' if MK & the other fine people of USAGold want this "word" prohibited even in passing then I am more than happy to comply. Otherwise Sir whilst I never seek to offend anyone I will always speak the truth (with respect) & will not be "muzzled" by anothers pre-concieved ideologies.
kind regards Sir - Netking
Voyager
(11/17/99; 14:12:28MDT - Msg ID:19296)
TO ALL
If I wish to read the Bilbe, I will go to the source. Please keep it off these golden pages.
Thank You
Netking
(11/17/99; 13:34:11MDT - Msg ID:19295)
Luv_G7
Sir, Do I sense just a tiny little bit of sour grapes, maybe? He will be wrong with his analysis from time to time as we all are including yours truly & I don't defend him or anyone else in this regard, the Bible says that in a multitude of counselors there is safety - wise advise for the times right?
However his pick on the recent top of POG around 320 was accurate although hated by his peers & some of those in the industry, as was his pick of Platinum's direction over the last week.
I don't believe he has any hidden agendas or links, but E Mail him & ask & I'm sure you'll get a reply. regards NetKing
Luv_G7
(11/17/99; 13:12:35MDT - Msg ID:19294)
On Kaplan
In answer to the post about Kaplan:
Steven Jon Kaplan's Gold Mining Outlook has greatly disappointed me lately. His writings suggest that he has ties to the bullion banks. He announces bearish positions with little factual info, except the fact that "people are bullish, so that's bad". As yes, he has very few comments on the supply/demand picture, the rise in oil prices, the upcoming BOE auction, and the option expiry date last Friday. I see Kaplan as cooky college professor with a private agenda. I read his web newsletter only out of curisity.
Nomad
(11/17/99; 12:48:10MDT - Msg ID:19293)
Sir Aristotle / Sir Farfel
http://www.fourthturning.com
Aristotle:
thank you for the further clarification. IMHO, i also see events transpiring almost exactly as you and Another (& FOA) have surmised. In Strauss & Howe's book 'The Fourth Turning' they speak of an event or series of events that will radically alter the perceptions and viewpoint of the entire society. this event is termed the 'Catalyst' and is predicted to occur within the next 3 to 4 years (Y2K being the obvious candidate for frontrunner).
eventually this Catalyst results in a 'Crisis' event in the succeeding 20 or so years. These events are products of psycho-historical cycles termed saeculums which occur roughly every eighty years (the length of a long human life). according to S & H, previous Crisis events in the USA have included WWII (1940), the Civil War (1860), the American Revolution (1776), and so on. simple math shows that these events occur with astonishing regularity (note the metronome-like 80 year time differential). it is my firm belief that we are, in fact, on the cusp of the next Catalyst event.
Farfel:
as for the unending Bubble.Com occuring in the financial markets these last few weeks, i am getting the exact same feeling that i had last summer when i was buying gold at the low point of the market, as one observer quoted 'the only people buying gold now are those who like standing in front of an oncoming train'.
i completely agree that there is absolutely nothing standing in the way of an already huge bubble growing even larger ... other than Y2K, that is :) it is my firm belief that the consequences of Y2K will be manifestly psychological and financial. think of it as the biggest *** POP *** in modern human history.
please remember that during the Great Depression, this country had MORE millionaires per capita than at any other time in history. so pick your markets, and place your bets ladies and gents ... those who choose incorrectly (the stock market/ the dollar) are going to end up in the brand new, improved version of the 1930's breadlines.
are you that eager to join them ?
or can you wait 44 days ? :)
Nomad
(11/17/99; 12:48:09MDT - Msg ID:19292)
Sir Aristotle / Sir Farfel
http://www.fourthturning.com
Aristotle:
thank you for the further clarification. IMHO, i also see events transpiring almost exactly as you and Another (& FOA) have surmised. In Strauss & Howe's book 'The Fourth Turning' they speak of an event or series of events that will radically alter the perceptions and viewpoint of the entire society. this event is termed the 'Catalyst' and is predicted to occur within the next 3 to 4 years (Y2K being the obvious candidate for frontrunner).
eventually this Catalyst results in a 'Crisis' event in the succeeding 20 or so years. These events are products of psycho-historical cycles termed saeculums which occur roughly every eighty years (the length of a long human life). according to S & H, previous Crisis events in the USA have included WWII (1940), the Civil War (1860), the American Revolution (1776), and so on. simple math shows that these events occur with astonishing regularity (note the metronome-like 80 year time differential). it is my firm belief that we are, in fact, on the cusp of the next Catalyst event.
Farfel:
as for the unending Bubble.Com occuring in the financial markets these last few weeks, i am getting the exact same feeling that i had last summer when i was buying gold at the low point of the market, as one observer quoted 'the only people buying gold now are those who like standing in front of an oncoming train'.
i completely agree that there is absolutely nothing standing in the way of an already huge bubble growing even larger ... other than Y2K, that is :) it is my firm belief that the consequences of Y2K will be manifestly psychological and financial. think of it as the biggest *** POP *** in modern human history.
please remember that during the Great Depression, this country had MORE millionaires per capita than at any other time in history. so pick your markets, and place your bets ladies and gents ... those who choose incorrectly (the stock market/ the dollar) are going to end up in the brand new, improved version of the 1930's breadlines.
are you that eager to join them ?
or can you wait 44 days ? :)
Aristotle
(11/17/99; 11:58:58MDT - Msg ID:19291)
Nomad--please see yesterday's (Msg ID:19232)
http://www.usagold.com/cpmforum/archives/16199911/default.html
You might want to take another look at my second post to you yesterday (at link above, scroll down to (17:10:41MDT - Msg ID:19232))
The comments quoted by Eugenio Domingo Solans really represent my views well, barring an exogenous shock, "It will happen spontaneously, slowly but inexorably, without any impulses other than those based on free will and the decisions of market participants, without any logic other than that of the market."
He of course was describing the bright future of the euro, but as I explained in my post, the same applies for Gold. On the question of timing, due to the speed of the markets these days to react to changing sentiment, I expect Gold to achieve its proper place atop the cosmic order a lot sooner than the euro. As soon as the writing is on the wall, what began as a slow progression will suddenly snap into a new reality (I relate that as akin to ANOTHER's comments to the general effect that 'Gold will be revalued one time, and that will be enough.') After that point, I see Gold simply rising (or falling--rare) in price at the rate of inflation (or deflation--rare) of whatever national currency is quoting the price.
After the leap in value due to the worldwide market reaction to this better monetary architecture where everyone rushes to Gold, that's where I then see the various national currencies slowly and naturally sorting themselves out on their own merits, as described by Eugenio Domingo Solans.
I also covered the topic of Gold "backing" versus Gold reserves standing behind a currency, so you'll want to revisit the post for that. In what I've described above, you won't have any Gold "backing" (which means fixed "convertibility" to me) but you will have Gold reserves playing a supreme role. Only at some point in the distant future do I see the eventual elimination of the national currencies as middle men between us and our money(Gold). At such a time, you will have 100% "backing" because the Gold itself will change ownership with each and every transaction--done through a banking structure that doesn't permit fractional reserve lending. The steps I've described as my perception of where we are now headed (events currently underway!) are themselves a natural stepping stone to an eventual evolution of solid Gold banking and commerce.
My best guessimate on the Gold move would be a foolish attempt. Who knows when critical mass will reached, or when an exogenous shock will abruptly put us there. It could happen tonight while we sleep, next week, or next year. If I had to give an outside timeframe, I'd say within three years. I give the euro's ascension to international transactional dominance a five to ten year timeframe. Obviously, this perception is worthless as trading advice, but hopefully it makes you give some better thought to how you structure and manage your "portfolio" of wealth--property, Gold, investments, and currency (and let's not forget your own marketable skills for income).
Gold. Get you some. ---Aristotle
Farfel
(11/17/99; 11:19:20MDT - Msg ID:19290)
DOW moving steadily toward 12,000 (or higher) by Jan. 1,'00
The DOW will break strongly above 12,000 before the end of the year. It is an absolute given, NOT even a matter of debate. Load up on call options and prepare to rake in the bucks. Gold is dead in the water and XAU companies continue to pursue wrong-headed, moronic, business strategies guaranteed to send most into bankruptcy court, sooner than later.
Under the Clinton administration, ALL market constraints have been removed: there are zero constraints on money supply creation....zero constraints upon financial mergers (as a result of Glass-Steagel termination)....zero constraints upon financial manipulation (if the DOW is beginning to stagger, the solution: simply change the member companies of the DOW, substituting non-performers like Union Carbide for hi performers like Intel)...zero constraints upon market intervention (if bullion banks are having trouble covering gold loans, then lean on USA-owned, subsidiary countries like Kuwait to cough up their gold and save Wall Street bullion banks from disaster)...zero constraints upon market trading (brokerage firms moving toward 24 hour trading OR online trading firms merely required to provide disclosure forms to traders about "day trade" risks WITHOUT taking any real substantive measures to clamp down on excess margin trading, etc.)...zero constraints...zero constraints....zero constraints....
Nobody in Establishment circles wants this bull train to stop...so why should it? How can it?
An exogenous event maybe...but surely the Clinton government would simply suspend all market trading in the event of any unforeseen alarming event. Nothing less should be expected.
Forget what the market technicians and fundamental analysts say today...at best, they can never be more than mere cheerleaders to the developing market mania...at worst, they call for downturns that rarely ever appear.
Thanks
F*
Aristotle
(11/17/99; 11:14:57MDT - Msg ID:19289)
In the same boat--Mark Twain and John Kenneth Galbraith
http://www.amazon.com/exec/obidos/ASIN/0395971306/qid=942860461/sr=1-4/102-8480738-9812807
Hello Usul, thanks for the wake-up call--that's not the kind of mistake a guy likes to make!
Looks like JKG and MT have two things in common: Both fine authors, and also, rumors of their demise were greatly exaggerated.
I attribute my mental lapse to the impression left by a book I had picked up that was published earlier this year (See link above--"Between Friends: Perspectives on John Kenneth Galbraith") The book was a collection of commentary by notable figures and friends of JKG, offering memories and praise for the full life and career of this giant indivdual. The book was actually done in celebration of his 90th birthday, but the eulogizing style together with the passage of time left me with the wrong memory of the purpose being served by the book--a birthday celebration, and hopefully many more to follow. Thanks for helping me set the record straight.
Gold. Get you some. ---Aristotle
TownCrier
(11/17/99; 10:55:47MDT - Msg ID:19288)
Fed adds permanent and temporary reserves to banking system through coupon pass and overnight repos, respectively
http://biz.yahoo.com/rf/991117/rs.html
The Federal Reserve said it bought U.S. Treasuries dated from November 2016 to November 2021 for delivery on Thursday to add permanent reserves to the banking system.
Also, on this last day of the two-week reserve maintenance period, the Fed added $2.750 billion in temporary reserves via overnight systems repurchase agreements for tri-party settlement.
Netking
(11/17/99; 10:40:02MDT - Msg ID:19287)
Ross L
Ross L (19275) - I have not asked him this, but would suggest yes. Physical though is only part of the equation regardless of how short supply of it is/becomes. We all know that this is not a true market (eg willing buyer & willing seller) of physical gold but that there are so many other factors all working together to affect the POG.
TownCrier
(11/17/99; 10:34:06MDT - Msg ID:19286)
NYMEX crude, products surge midday
http://biz.yahoo.com/rf/991117/w6.html
Bent crude trading in London hits a nine year high above $25 per barrel, NYMEX December crude draws near to the post-Gulf War high of $26.74.
ward
(11/17/99; 9:27:01MDT - Msg ID:19285)
Oh-well
I'm just about ready to capitulate and join the good time crowd. A sure sign that the DOE has reached a peak?? I sure hope so because I dont know if I can take it until Y2K to find out if we are all crazy or not.
Alert: Commerce's Shapiro Sees No Shock to U.S. Economy From Y2K Problems Abroad (options) - Reuters - Wed 10:54am
Alert: Commerce's Daley-no Significant Impact on U.S. Economic Growth From Y2K Problem (options)
WilloTheWarthog
(11/17/99; 8:24:17MDT - Msg ID:19284)
Comex Gold Dec99-Dec00 Spreads Widen Yet Again
As of yestersday's close:
Date Dec99 Dec00 Int Rate
16-Nov $295.30 $307.60 4.17%
15-Nov $292.50 $304.40 4.07%
8-Nov $291.10 $301.90 3.71%
5-Nov $291.00 $301.60 3.64%
20-Oct $307.30 $315.80 2.77%
5-Oct $326.00 $332.00 1.84%
Nomad
(11/17/99; 8:12:30MDT - Msg ID:19283)
@ Sir Aristotle
thank you sir for your extensive reply.
i fully agree with what you wrote about currencies. i have several questions for you (and for any others who wish to contribute to this discussion) ...
1) will most or all current fiat currencies be modified or replaced so that they have full 100% gold backing ?
2) if you believe that this scenario will occur, in what time frame do you envision for these events taking place (months/years/decades) ?
3) what events do you envision to effect such a monumental revaluation of the yellow metal (war/Y2K/other) ?
4) considering the relative scarcity of actual physical gold in the world, is a scenario of a (or many) 100 percent gold backed currencies even feasible in this age of multi trillion dollar stock/derivatives markets ?
thanks again for your interesting commentary. it just helps me adjust my mental picture of the future.
please, anyone interested in the four questions above please feel free to respond.
Nomad
(11/17/99; 8:12:22MDT - Msg ID:19282)
@ Sir Cavan Man
'It is obvious to me you really dislike the US and all Americans.'
sorry to disappoint you sir :) i AM an american and it pains me greatly to see how far i believe we will fall in the very near future as a result of the asinine decisions that are being made at many levels (personal/governmental/economic) at this time.
my viewpoint simply comes from conversations about america and american foreign policy with various foreign citizens during my extensive international travel in the last several years.
USAGOLD
(11/17/99; 8:05:54MDT - Msg ID:19281)
Today's Gold Report: World Gold Council Reports Record Surge in Gold Demand for Third Quarter
(For links, visit the Daily Market Report)
MARKET REPORT(11/17/99): Gold continued to move higher this morning
on the latest World Gold Council figures showing a 22% across the boards
increase in demand worldwide; short covering in London; and, a deal cut
between the White House and Congress to allow revaluation of the IMF
gold hoard but prevent sales. Underlying these headline grabbing events,
the markets, including gold, seem to be reacting in fits and starts to a
deliberate U.S. policy to weaken the dollar. The yen, Swissie and D-mark
are all up sharply this morning along with gold. The bond market is down
sharply and the DOW is off to a bad start. The two factors driving
physical gold demand at the moment are resurgent Y2K concerns and the
potential for a long term decline of the dollar as an antidote to the
record trade deficits over the last several months.
More on the IMF Gold Revaluation Plan -- With what can be gathered
from the reports last night published by Reuters, the new revaluation
and debt relief program agreed to by Congress and the White House does
not require a sale of gold. Instead, the IMF will revalue a portion of
its gold higher and use the proceeds gained from the interest on that
revaluation to fund the debt relief. Says the report: "The paper profits
generated by the gold revaluation will allow the IMF to finance its
obligations under a debt relief scheme which, coupled with debt-relief
from the Paris Club creditor nations, would cut the debt load of 33 of
the world's poorest countries to about $45 billion from $90 billion. The
deal would allow the IMF to use 9/14ths of the interest generated by the
gold revaluation immediately, with the remaining 5/14ths of the interest
requiring subsequent additional congressional authorization by May of
next year." If this interpretation is correct, a long-standing negative
for the gold market -- IMF gold sales -- has been removed from
consideration. The revaluation plan coupled with the European central
banks decision to curtail sales and lending have largely removed the
psychological dark cloud of institutional gold mobilizations which has
hung over the market for several years.
World Gold Demand Jumps in Third Quarter -- Gold demand jumped
22% worldwide driven by jewelry and investment off take, according to
the World Gold Council to an all time quarterly record of 876.5 tons.
For the first nine months of the year, gold demand reached 2471.6 tons
-- a 30% increase and also a record for the period. The demand surge was
led by a strong in Asia across the boards as it recovered from the
Contagion of last year. The U.S. demand, though unchanged, continued to
demand gold at the record rate of the previous quarter. The Council
attributes the historically high U.S. off take to "Y2K fears coupled
with concern over a stock market correction..." The Council called the
European central announcement to curtail gold sales and leases, a
"bombshell that changed the perspective of the market overnight."
That's it for today, fellow goldmeisters. See you here tomorrow.
Please call 800-869-5115 (Ask for Mary Conway) if you have an
interest in receiving a trial subscription to our widely read
newsletter, News & Views: Forecasts, Commentary and Analysis on
the Economy and Precious Metals. Or you can go to our ORDER FORM
and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.
714
(11/17/99; 7:42:49MDT - Msg ID:19280)
RossL re: Kaplan
I used to regularly read Kaplan's site about two years back when I got into the gold market and I do recall him commenting on physical supply & demand. I don't recall a studied analysis by Kaplan that we find here. But he's probably aware of the situation. Maybe Kaplan's old comments are archived somewhere. Of course, he was bullish on gold then, so I followed suit and invested in physical. POG kept dropping though and I subsequently quit reading him.
nickel62
(11/17/99; 6:56:33MDT - Msg ID:19279)
Greenspan and Clinton/Rubin(retired)et all looking to pass buck to Y2K
Not even a blind pig could think this market is fairly valued. The only question is who is going to get tarred with the blame for letting this thing get so out of control. Not Rubin,not Hilary's husband,not even Greenspan, who was clearly set up to take the fall,but all those unrulely little people who will lose their nerve when the government manipulators and their media create a panic around Y2K.
nickel62
(11/17/99; 6:55:59MDT - Msg ID:19278)
Greenspan and Clinton/Rubin(retired)et all looking to pass buck to Y2K
Not even a blind pig could think this market is fairly valued. The only question is who is going to get tarred with the blame for letting this thing get so out of control. Not Rubin,not Hilary's husband,not even Greenspan, who was clearly set up to take the fall,but all those unrulely little people who will lose their nerve when the government manipulators and their media create a panic around Y2K.
nickel62
(11/17/99; 6:46:54MDT - Msg ID:19277)
John K. Gailbraith
Gailbraith is still alive living in cambridge,Mass. I believe.
Al Fulchino
(11/17/99; 6:33:13MDT - Msg ID:19276)
19266 Steve H
Neat info on the ratios. Thanks
RossL
(11/17/99; 4:24:30MDT - Msg ID:19275)
Netking
Question for you or any other Kaplan follower:
Has Kaplan ever assesed the supply/demand situation of physical gold in his market analysis?
Usul
(11/17/99; 3:54:46MDT - Msg ID:19274)
TownCrier, Aristotle
Galbraith
Aristotle said "was"- Unless I am mistaken, J K Galbraith is still with us. Correct me if I'm wrong!
TownCrier
(11/17/99; 2:44:24MDT - Msg ID:19273)
Hello Sir Usul
Your post reminded me of one posted yesterday that you might enjoy...more words quoted from Sir J. Ken Galbraith:
Aristotle (11/16/99; 15:27:45MDT - Msg ID:19223)
More on Bubbles--explained for the common man
John Kenneth Galbraith was a noted economist ...
Time to blow out the candle for a bit, and let the wolves howl as they might without weary this rooftop audience.
Simply Me
(11/17/99; 2:16:15MDT - Msg ID:19272)
Duh!
Meant to say...lots more "bidding' than "asking" going on.
I think...I'll...hang...it up....ZZZzzzzzzz.
simple me
Usul
(11/17/99; 2:15:19MDT - Msg ID:19271)
Emeritus Professor John Kenneth Galbraith
http://www.economics.harvard.edu/faculty/galbraith/galbraith.html
"Nobody should be completely calm about the question of a bubble in Wall Street... Stocks have been going up at least largely because people thought they were going up, acted, and (the results) confirm their expectations. This is the classic speculative binge. We are presently witnessing - and in the frequent case rejoicing in - a stock market boom, a bubble, for which we may be reasonably sure there will be and unpleasant day of reckoning."
Sounds familiar?
John Kenneth Galbraith, May 1998.
Cited in:
http://www.equitiesonline.com/newsletter/
http://pages.infinit.net/westweb/Wed854.htm
(The Globe and Mail)
Galbraith has also written about the Great Crash of 1929 (!)- see Clif Droke's article: "History repeats: 1929 versus 1999 - Part 1"
http://www.gold-eagle.com/research/drokendx.html
"John Kenneth Galbraith, born in 1908, is the Paul M. Warburg Professor of Economics Emeritus at Harvard University... He lives in Cambridge, Massachusetts":
http://www.hmco.com/hmco/trade/nonfiction/catalog/AboutAuthor0-395-82288-2.html
Simply Me
(11/17/99; 2:13:56MDT - Msg ID:19270)
Who's Buying?
Anybody watching GC99Z tonight? Big buying $296 going on at 3am Central Time. Lots more "asking" than "bidding" on the board.
simply me
TownCrier
(11/17/99; 2:07:01MDT - Msg ID:19269)
After the Close: the GOLDEN VIEW from The Tower...by candlelight
As was mentioned yesterday, the prevailing view held by market players was that it wouldn't matter what the Fed actually did today, the stock market was prepared to like the news. Although we questioned why yesterday's markets finished flat instead of getting a jump on things when such overwhelming consensus called for a rally today, the answer now appears obvious...stocks didn't move yesterday because everyone was out working two or three jobs in order to earn the money they would be pouring down the gutters of Wall Street today. Well done, folks. Well done.
So there you are, the proud new holder of shares in a company...shares representing such a miniscule percentage of ownership in the company that your standard calculator can't display all of the zeros following the decimal point before the significant figure is found. And the P/E ratio looks just as bad (assuming that it's positive, that is!) On a glorious day such as this, you've got to ask yourself a question. What fool in his right mind was willing to sell you his stock, parting ways with this investment vehicle that will surely be taking you promptly to the moon? The future is so bright, The Tower reminds you to slather on some sunscreen and don some sporty shades.
THE Fed SHOULD HAVE STAYED IN BED
This exuberance is surely not pleasing to anyone sitting at the helm of this Federation Starship America. You hem and you haw and you beg for restraint, veiled, of course, as politically correct warnings of the most gentle nature (Greenspan's Dec.1996 "irrational exuberance", and his Aug. 1999 Jackson Hole speech about market crashes in general); yet instead of heeding the warnings, the crew of the ship gleefully shovels more dilithium crystals into the reactor for warp(ed) speed. *sigh*
The Fed surely doesn't want to take the fall as the obvious pin which pricked the bubble, so until the mania either runs itself out of steam or encounters a heretofore unforseen external Event, expect the course steered by the Fed to be steady-as-she-goes. The Fed did exactly as much as they could get away with, raising the rates on fed funds (the target rate at which banks lend each other federal funds, you know...Federal Reserve Notes masquerading as dollars) by 0.25% to 5.5%. They also raised the discount rate by the same amount to 5% (the discount rate is the interest rate at which banks may borrow outright directly from the Federal Reserve.) Accompanying this smallest possible rate hike, the Fed relaxed their former tightening bias to neutral, or "symetrical" in their words. However, in this excerpt of the Fed's official statement, do you see anything that calms your sense that price inflation is not looming large? With oil hitting $26 I should say not. For anecdotal evidence, have you checked the price of milk lately? Way up from just a year ago.
"Although cost pressures appear generally contained, risks to sustainable growth persist. Despite tentative evidence of a slowing in certain interest-sensitive sectors of the economy and of accelerating productivity, the expansion of activity continues in excess of the economy's growth potential. As a consequence, the pool of available workers willing to take jobs has been drawn down further in recent months, a trend that must eventually be contained if inflationary imbalances are to remain in check and economic expansion continue."
The market pundits with much ballyhoo made sure that the masses were well-aware that today's increase in the federal funds rate, together with the actions in June and August should be seen as nothing more sinister than the Fed undoing the three rate cuts it made last year in the wake of the financial crisis brought about by the Russian default on debt and ruble devaluation. They wanted the word on the Street to be that this was not a braking action, it was merely a restoration to the way things were before the crisis. Apparently, because they all know that will never happen again, it is indeed appropriate to pick up were we left off, although with the Nasdaq well into new record territory.
Just for some context, the average target rate for Fed Funds has been about 5.7% during the twelve years that Mr. Greenspan has been the Fed Chairman. Seeing that today's move still leaves us 20 basis points shy of that average, would you be as inclined to say that the inflationary pressures you see around you are less than the average threat that you've seen or felt over the past decade?
MARKETS
The Dow climbed 171 to 10932 as nearly a billion shares traded hands on the NYSE. Advancers beat decliners 1,788 to 1,256, and new 52-week highs finally bested the new lows on the Big Board, 97 to 88. The Nasdaq knows no fear. The Composite index gained 73 points to set a new record at 3293.07 on its heaviest-ever volume. 1,469,294,000 shares where swaped with winners beating losers by 2,243 to 1,812, new highs getting the upper hand by 220 to 77 over new lows. Here's a word to the wise, something not likely to be widely pointed to by the cheerleading media, though mentioned only as a footnote. The Nasdaq stock market said its trade reporting and quotation system shut down due to "technical problems" of new software ironically installed to help it function at times of surging volume. The shutdown occurred at 3:40 p.m. EST. It went back on line 17 minutes later, and was said to be functioning properly during the 4 p.m. through 6:30 p.m. extended hours trading session. Nelson Gold, a trader at Wachovia Securities told Reuters he took the system glitch in stride..."It's a little traumatic when you're trying to do business. But it's not the end of the world."
Unless, of course, it happens *during* the end of the world...or else precipitates the same.
Although bond market participants said yesterday they were prepared to rally whatever this day's move might by the Fed, apparently they were a little more in tune with the nuances of the written word than your typical stock buyer, and were less than calmed by the statement announcing the Fed's neutral bias. Good call, my friends. They ancipate tougher times to come, and sent the 30-Yr Bond down 17/32 in price, lifting the yield to 6.056%. Will the stock markets come around to this way of thinking tomorrow, after they've had a chance to look up some words in their dictionaries? Oddly, though, the dollar went ganbusters, gaining more than a full yen to close at ¥105.92, and climbed 0.32¢ against the euro to push the single currency toward the lower regions of its recent trading band. The close was at $1.0298.
GOLD
The London PM Gold fix today was $294.25, up nicely from yesterday's $290.90. By the time trading ended in NY, the spot price settled in at a $2.80 gain over yesterday, last quoted at $293.80 per troy ounce.
Here is a very, very interesting picture painted by the Bridge News Market review, especially when considered in tandem with an earlier Reuters report form London (which, by the way, attributed the up move to a "brief, short-covering flurry") and also our GOLDEN VIEW from a week ago in which we covered the Argentine response to Y2K. You might recall that we reported on the direction given by bank managers whenever lines would form that threatened an impending run on the bank. They told the tellers to pile stacks of cash around their tills in direct sight of those in line in the hopes that they would be appeased by the vision alone, and perhaps would hopefully wander away without waiting in line for their share of the apparently *abundant* resourses. Keep that in mind as you read on.
Reporting on trading in London, Reuters quoted one London dealer who said, "There's a lot of metal around with a fair bit of gold lending over the turn of the year." This notion of ample gold is once again flaunted to a degree in the Bridge review of dealings in New York on the COMEX. See for yourself...and note that you'll also see in this report some support for an old notion we ran up the flag pole a short while back (nobody saluted at the time) that the relaxing lease rates might very well be driven by attenuated borrowing demand rather than by an ample supply of lendable gold...which seemed unlikely.
NY Precious Metals Review: Dec gold up $2.8 on short-covering
By Darcy Keith, Bridge News
New York--Nov 16--COMEX Dec gold futures settled up $2.8 at $295.3 an
ounce after climbing as high as $296.00 on short-covering and technicals.
Despite Tuesday's advance, players were not optimistic gold had a lot
further upside potential as there is little in the way of physical
tightness.
Gold-lease rates continue to hold at very low levels, with 1-month
rates currently near 0.57%. With such low lease rates, and the perceptions
of a market with ample supplies, gold is unlikely to stage a significant
rally, said Leonard Kaplan, chief bullion dealer with LFG Bullion
Services. "We're still in a relatively restricted range. I'd expect us to
range-trade between $288 to $296 or $297," Kaplan said.
Kaplan said quite a bit of gold is available in the short term,
keeping lease rates low, in what could be a signal of a drop off in demand
rather than new supply hitting the market.
He noted that producers have bought back forward commitments and are
returning gold to the market, leading to more supply.
But he said longer-term lease rates are firmer, with 1-year terms
going for about 1.88%, pointing to the possibility of a tighter market
further out.
David Rinehimer, director of futures research for Smith Barney, said
lease rates are lower than expected after the announcement earlier this
fall from key European central banks on restricting future sales and
lending activity.
"We could be seeing reduced borrowing demand to establish short
positions," Rinehimer said, noting that lower lease rates may help shorts
to exit their positions.
David Meger, senior metals analyst with Alaron trading, said now that
Dec gold tested and held the $290 area, it should be able to spring back
up to test resistance at $300-302.
The US Federal Reserve increased its key federal funds rate target to
5.50% from 5.25% just before market close, but did not
appear to have much impact as stock and bond markets initially absorbed
the hike fairly well.
Rinehimer said gold's ability to hold above $290 has spurred some
general buying interest, and there are expectations that the UK's next
gold auction on Nov 29 will see fairly strong demand.
But he noted that trading volumes are thinner then they have been in
recent weeks. "Trading levels are back to the more lethargic levels seen"
before the European Central bank announcement in September, he said.
Rinehimer expects more range-trading between $290 and $300 ahead of
the UK's next gold auction, and said sentiment has been dampened by
agreements reached by troubled gold producers Ashanti and Cambior to
restructure their hedging positions and reduce short positions.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.
---
A quick reality check begs the question, if the metal is sitting around in ample supply (and not just as a showpiece on an Argentine teller's countertop) and the buyers aren't exactly beating down the doors to get at the precious stuff, then why didn't prices fall through the floor? Supply without demand begs for lower prices. "Welcome, my friends, to Buenos Aires! Stand in line if you insist, but as you can see, we have plenty of gold. Please. Come outside instead where the weather is so nice this time of year, and let me distract you further with visions of a surging stock market!"
Additionally, all that talk of reduced demand for new gold loans, and lethargic trading of the COMEX futures contracts, and the steep decline of December open interest (the amount of gold futures contracts outstanding between buyers and sellers) all lend support to various reports that the pros are reckoning their books and closing out their positions to walk away from this untamable beast in order to lick their wounds with vows never to be so foolish again. A Solomon Smith Barney Precious Metals Report issued October 18 is titled "A New Millennium Gold Market: Bull Market is Just Beginning" proclaims in the start of the Executive Summary "The market's explosive response to the specter of reduced central bank gold liquidity highlights the metal's burgeoning supply/demand imbalance." The report continues to say that gold carry trades and other short strategies generated huge losses "as liquidity dried up in the short covering scramble, gold prices, lease rates, and options volatilities spiked -- with disastrous consequences for hedge funds, traders, speculators, and producers caught short." And elsewhere, "The carnage in the gold derivatives market resulting from a 25% jump in prices is astounding to us, especially against a backdrop of double and triple-digit percentage gains in oil, copper, aluminum, and nickel; resurgent inflation signals; dollar weakening, and looming Y2K concerns." Excellent points, all of them. Especially about the carnage from the small bump up in gold while there is no similar "carnage" from huge gains seen in oil and other metals. Are you smiling at the birth of a new paradigm, yet? (Or should I say, the return of an old one.) The bottom line is that the damage has been done, and tents and folding tables are being packed away.
Here's one final word from the good folks at SolSmiBar, "While the motives behind the G-10 initiative will be debated exhaustively--whether to support reserve values, signal departure from dollar hegemony, or capitulate to producing country pressure--we believe the effect on gold bullion and equities is unequivocal--it's positive."
House Majority Leader Dick Armey announced at a news briefing today that a deal has now been struck amid budget negotiations which would allow the International Monetary Fund to revalue part of its gold according to Reuters. "We have agreement on it and it allows us to move forward with the plan ... to give debt forgiveness to poor nations." Though not out of the woods completely... the issue must still receive an 85% majority vote of IMF members (the U.S. had effective veto power with approximatly 18%). Bridge News reported that today Peru's President Alberto Fujimori said though his nation supported debt-relief efforts, the possible sale of IMF gold reserves could bring down the metal's price and affect producers such as Peru. Somebody from the IMF had best be getting on the phone to President Fujimori to reassure him the operation will look like a simple feat of accounting book wizardry rather than a sale such as we have seen from the Old Lady on Threadneedle Street.
Speaking of accounting book magic, it would appear that Canada marks the gold in their reserve books to market value much more frequently than the quartly revaluation we see from Euroland. In the Bank of Canada's release today of the country's official international reserve position at the close of business on November 15, their gold reserves were shown to have increased in value from $520 million on Nov 8 to $525 million on Nov 15. While the FWN report which delivered this news said "Canada reserves data imply no gold sales in last week," we are led to believe the value gain was on the books rather than on the scales.
For the record, Canada's total reserve position stood at $27,054 million (including US dollars, SDR's, other foreign currencies, gold, etc.)
Speaking of reserves, values, and scales, the European Central Bank announced in their weekly financial statement that while their net foreign exchange assets fell by €300 million to €236.8 billion, their gold assets were rock steady at € 114.988 billion.
Wrapping things up in the gold world, there was no change to the COMEX gold inventory, where 942,573 troy ounces are under safekeeping. Open interest on the December futures made some small gains yesterday following the previous days massive settling of net positions. 17,870 Dec futures traded hands, resulting in a net O.I. increase of 4,760 contracts to 64,664.
OIL
December crude futures traded on the NYMEX faced option expiry today with a stiff upper lip and rallied to close withing 2¢ of its intraday high, reaching a fresh 34-month high price. Settlement was up 57¢ at $25.70. Overnight Access trading quickly tacked on another 33¢ to push the price above $26 following the release of American Petroleum Institute data. Brokers had expected to see US crude oil stockpiles drop by 1.5-2.0 million barrels, and were pleasantly surprised by the data showing a fall of 2.490 million barrels. Gasoline inventories also surprised them with a drop of 4.949 million barrels.
At this late hour, a fresh look at the early price in London shows gold to be up another dollar over the NY close.
And that's the view from here...after the close.
Netking
(11/17/99; 1:54:41MDT - Msg ID:19268)
POG / CAVANMAN / BONEDADDY
"My current outlook has fallen to NEUTRAL for gold and its shares. On Tuesday, November 16, the XAU significantly
underperformed the price of gold, as the XAU continues to struggle mightily with the key 70 level, while put buying on gold mining shares almost
vanished completely, and lease rates are at even lower levels than they were in the summer, all of which are significantly negative. Platinum is in
serious trouble and crude oil may well be making an intermediate-term top; the whole house of cards looks about to collapse. The Federal Reserve
has demonstrated its resolve to act in a manner which will preempt any threat of inflation. Though the Fed could not continue to act so aggressively in
the event of a recession, such a possibility of an economic contraction is remote before the year 2001 as the Presidential election approaches. On the
positive side, the JOC index of commodities remains above important support levels, while the ECRI-FIG gauge of future inflation registered its greatest two-month
surge in 16 years, improving gold's long-term fundamentals. The traders' commitments remained little changed as the price of gold fell from $338 to $290, while
open interest has been contracting sharply, indicating that commercials do not believe that gold has a significant base of support around $290, otherwise
they would have gone long aggressively on all dips below that key level, as they have had many opportunities to do so in recent weeks but spurned
each of them in turn. Many analysts are proclaiming that they like gold "as long as it remains above $285," which is the proverbial kiss of death as speculator sell
stops are no doubt concentrated at and just below that key level. Commodities and currencies in general are showing signs of exhaustion, with their traders'
commitments clearly showing that they have become markedly overextended. The one-month lease rate for gold is having trouble staying above 0.5% after being
slightly above 10% in early October. Those gold analysts who were most bearish this summer remain the most vocally bullish. The most likely outcome would
be to see gold eventually drop to $275 and the XAU go to 58. The strong performance of unhedged mining shares is a cause for serious concern; many of
these shares are still trading close to the same prices as when gold was at $320, while hedged shares are at lower prices than before the early autumn
rally even began, when gold was below $260. This divergence is illogical, and demonstrates a recent obsession with unhedged shares well out of
proportion to their profits and actual proven growth potential. Before any strong rally in gold, the unhedged producers are almost always the weakest
performers, as investor skepticism about the prospects for a gold rally scares share buyers away from the uncertainty of always selling at the spot price. Bonds may
recently have bottomed, and rising bonds are very bad for gold since a certain critical mass of money often switches back and forth between fixed income securities
and the yellow metal.
THOUGHT OF THE DAY: My apologies for beating a dead horse, but selling platinum short is still the best play around, even if you missed today's
euphoric peak (classically failing once again at long-term resistance) at $432. Be sure to have plenty of extra cash in case the market briefly moves
against you." (Steven J.Kaplan)
CAVANMAN(19254) Agree Sir.
BONEDADDY(19259) I Agree also Sir. Personally religion did nothing for me in my life, I hated it. It is was vanity Bonedaddy, simply man reaching up in his strength to try & reach/know God. Christianity on the other hand set me free as it was God himself reaching down to man through his son Jesus Christ.
SteveH
(11/17/99; 0:34:25MDT - Msg ID:19267)
Nightly view
www.stratfor.com
repost of latest mailing. A snippet... (add this to the crescendo list):
Summary:
The Arab states in the Persian Gulf are taking a significant step
toward a mutual defense agreement. Although the Gulf Cooperation
Council (GCC) has made similar commitments over the years, it
appears that the six countries are striving for an unprecedented
level of integration between their militaries. If properly combined
with improvements in their forces, the GCC may be on the threshold
of creating a more credible military force of its own: one that
complements U.S. forces in the short term, but is increasingly
independent in the long term.
SteveH
(11/17/99; 0:15:53MDT - Msg ID:19266)
Nightly view
http://www.goldensextant.com/commentary5.html#anchor10776
snippet -- The Dow/gold ratio moved from 1.01 in 1897 to 18.4 in 1929 before the crash, then fell to 2.01 at the bottom in 1932 (gold fixed at $20.67/oz.). From 28.26 at the Dow peak in 1966 (gold fixed at $35/oz.), the ration fell to about 3 at the bottom in 1974, and to 1.04 in January 1980 at the modern peak in gold. At the Dow's peak in August 1999, the ratio was over 40, an all-time high. Portrayed on a chart covering this century, the Dow/gold ratio presents a violent saw-tooth pattern that would scare a roller coaster fan. For a long term Dow/gold chart, see www.franco-nevada.com/fn_gold.htm; for charts since 1984, see business.fortunecity.com/wrigley/585/Markets/GoldDow.htm. The peak ratios of 1929 and 1966 both resulted from credit expansions that ultimately strained the existing international monetary order to the breaking point. The 1932 and 1974 troughs in the ratio coincide with those breakdowns, events virtually unavoidable in retrospect but not widely anticipated in advance.
SteveH
(11/17/99; 0:02:14MDT - Msg ID:19265)
Nightly view
LT Bond lowering (yield rising): 114.12
Gold rising. $295.90
Oil rising. $26.10/bbl
S&P;Dow;Nasdaq futures falling.-2.10;-17;-6.50
Now...this makes sense.
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