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Gold/Mining/Energy : GGFI-GUYANA GOLDFIELDS

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To: CLK who wrote (166)	10/27/1997 11:53:00 PM
From: Aloysius Q. Finnegan	Read Replies (1) of 259

Thanks CLK I'll check it out. This evening may prove to be historic. As I speak the Hang Seng is down 15.6%. I wonder for how long the little guy will continue to utter the party line ... 'I'm in it for the long run'. He may soon be lucky if he can get more than a busy tone on his favorite mutual funds 800 line. The brokerage house media ... ie CNBC/CNN spin doctors ... would have us believe that the Asian economies have but a minimal impact as far as the US economy is concerned. If Japan continues it's melt down they'll be repatriating their dollars and as you noted else where ... we can by our own T-bills with our credit cards. The global market will magnify it's effect on the US economy as leveraged investors panic to cover Asian margin calls by selling US stocks tomorrow. Our controls over leveraged investing in the US are much more strict than abroad, but given the interconnected international nature of todays global market ... that makes little difference. Worse yet ... the derivative. Leveraging in that market is an order of magnitude greater. The following is taken from the Kaplan report: geocities.com "... Understandably, investors were not particularly sector-selective in their selling pattern; some may even have dumped gold mining shares to meet margin calls on their "good" stocks that are "sure to recover." The latter pattern would mark an exact repeat of the behavior during the 1987 stock market crash, when gold mining shares dropped sharply during and immediately after the Dow plunge, then recovered most rapidly thereafter. "The recent volatility in the financial markets at home and abroad will make it much more difficult for the Federal Reserve to raise interest rates. Therefore, even if inflation accelerates, as long as the stock market is declining, there will be no brakes put on the economic engine. The implications are strongly bullish for precious metals and their shares, since rising inflation and artificially low interest rates are the ideal combination for spurring investment in gold. " Hmm ... Wonder what will happen to gold stocks. Patrick

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