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To: Bobby Yellin who wrote (10324)	4/21/1998 4:38:00 PM
From: Tom Byron	Read Replies (1) \| Respond to of 116897

Correction: That post number on the Homestake story purchase shuld be #8436

To: Bobby Yellin who wrote (10324)	4/21/1998 5:55:00 PM
From: paul ross	Read Replies (3) \| Respond to of 116897

A couple of interesting items in this months News & Views (USA Gold) newsletter of 4/98. The first is about the fact that old Fort Knox may not hold as much gold as we think (have we heard this before on GPM ?). N&V muses "do you remember recently when the IMF considered selling its gold and Robert Rubin was pulling out the stops to force the issue? Dumping gold appeared vital to the US govt. then as it is now. Why? Germany and Japan, as you may recall, blocked the sales. If the US was that adamant about selling gold, (and you've got to believe that the sales had more to do with holding down the gold price and bolstering the dollar than aiding 3rd world nations as Rubin maintained), then why wouldn't the US dip into its prodigious 8000-ton hoard to do it themselves..." And from "Is the Gold Still in Fort Knox?", an article N&V quotes from James Turk: "Ed Durrell believed that the Fed. govt. was not being honest with the American people. He believed that substantially all of the gold held by the US Treasury had been dishoarded, and he began to make his views widely known in the 70's. He contended that the US Gold Reserve... was vastly overstated and that this deception was being perpetrated on the American people by successive US administrations either ignorant of the truth or afraid to tell it." "ED Durrell's evidence was largely circumstantial, but nevertheless part of it was also somewhat compelling. For example he noted that the gold disposed by the US govt. by auction in the late 70's was "coin melt" quality, i.e, the gold that had been confiscated in the 1933 seizure by FDR and "melted" into bars less than 99.9% pure. Ed Durrell believed this lower grade gold was sold because the pure bars were missing." "The US govt. had not undertaken a proper audit of the gold since...the 1950's." Another article N&V quotes is "The Real Inflation Rate" by Richard Maybury: " The govt. omits stocks from the CPI, apparently on the assumption that stock prices are not prices. If they aren't prices what are they? I and many others have long argued that if stocks were included in the CPI, the CPI would be much more complete and would better reflect the true changes in prices from the govt's counterfeiting (expand the money supply)... We asked, how many stocks the avg. consumer buys each year and what do they cost? Sifting a mountain of data we came up with ... the Maybury Complete CPI (MCCPI)." "Since 1929 the govt.'s CPI is up 842%, the MCCPI up 1582%... Since 1989, the govt.'s CPI is up 2% and MCCPI 8.8%. Prices in this decade have risen three times as much as the govt. admits...The MCCPI is highly instructive for investors. Since WWII, except for brief periods, the money supply has increased steadily and so has the MCCPI. The new dollars are always going somewhere and wherever that is, prices rise. In creating the MCCPI, we discovered a cycle, an oscillation. The money goes into stocks, then consumer items, then stocks, etc. When stocks are fashionable, money goes into the stock market. When they aren't, money goes into "stuff" like food and clothing that show up in the CPI..." "In the period 1950 to 1970, stocks were rising strongly while ...the CPI was rising only mildly. From 1970 to 1980, stocks were flat and "stuff" was soaring. From 1980 to now, stocks have been the skyrockets... To me the most realistic approach is to wait until one side of the cycle is at least 7 years old, then begin gradual accumulation of the other side. You might have to wait ten years for the big jackpot, but it will be worth it."