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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: robnhood who wrote (12042)	5/22/1998 12:37:00 PM
From: long-gone	Read Replies (1) \| Respond to of 116825

RE: IMF Funding Something is changing - Congress does not want to give away our money. Just a little hearing from us is all it will take to stop it! rh

To: robnhood who wrote (12042)	5/22/1998 1:16:00 PM
From: Alex	Read Replies (1) \| Respond to of 116825

Interesting read from U.S.A.Gold today...................... MARKET UPDATE (5/22/98) AM ---- Lots of news this morning pertinent to gold, though none of it seems to have affected the market in any material way. We will get right to it. We'll start with Japan because much of today's market activity centers around their still growing, still not-even-close-to-being-resolved banking crisis. Bank of Tokyo-Mitusbishi, one of the world's largest, announced heavy losses due to the expanding Asian monetary crisis. BTM has an exposure they will admit to of $14.8 billion, much of it in Indonesia, and almost all of it at the brink of going bad. Rumors of a major commercial bank failure have been running through the markets for weeks and BTM might be the entity at the center of the rumors, though some say "take your pick" -- anyone of half a dozen Japanese major banks are teetering at the brink. What does this mean to Americans? A great deal. First, our bond market could sour overnight. As it is bond dealers report rumors over Reuters this morning that "the Fed(eral Reserve) sold Treasuries on behalf of a customer, possibly the Bank of Japan" Thursday afternoon. The issue of Japanese bond selling is a familiar topic on these pages. What happens when the Fed can no longer find takers in a sliding bond market for unwanted Japanese held U.S. Treasuries? Do we resort to the printing press? Simultaneously, Thailand slid further down the steep rampart yesterday when its parliament refused to OK a bond float. Not wanting to go further into debt, Parliament by doing this showed categorically that they would not be party to bailing out the Thai banking system and in turn U.S. and Japanese banks. This could get ugly today and over the weekend as world markets position themselves for what seems to be a deepening level of financial crisis in Asia. In gold news, I had the opportunity to speak with old friend, James Turk, yesterday (after a miserable ( scratch that) -- "deplorable" -- 9 holes of golf. (One wonders why we submit ourselves to this type of degradation. Resolving my sad relationship with the little white ball has moved high on my agenda for early summer.) At any rate, Mr. Turk, who writes an admirable newsletter for those interested in the mysteries of gold and international finance called THE FREEMARKET GOLD & MONEY REPORT, tells me that he suspects that the reason why there hasn't been an announcement on the gold content of the euro is because "the Dutch are in the process of dishoarding all or a major portion of their 1000 tonnes of gold." Those of you who have followed Mr. Turk over the years know that he has done some of the heavy lifting for the rest of us gold analysts on international gold flows, particularly in Europe. He says in his May 18, 1998 letter: "No announcement has been made by the new ECB (European Central Bank) about its future gold policy because the new ECB governor (who by coincidence is Dutch) is purposefully allowing the Dutch -- with the tacit approval of each of the member countries in the monetary union -- to complete their dishoarding before ECB makes any definitive and formal policy statement about foreign reserves and Gold. The reason: After ECB goes into effect the Dutch will not be able to mobilize reserves. The Dutch know that Germany, Italy and France favor a strong gold reserve. The Dutch would just as soon sell, according to Turk. So this is the reason for the delay. It all makes sense save for one small problem: There has been no announcement along these lines from the Dutch so we can't know for sure if Turk's theory is reality. I asked Mr. Turk, "Do you really think that the Dutch are selling all their gold? His response was that there has to be some reason for gold's dismal performance in the face of everything's that gone on lately (the euro, Japan, Asia, etc.). Somebody's got to be selling and most the most likely candidate is the Dutch. The golden lining to this gloomy cloud however, says Turk, is "once the announcement is made, buy gold. That will be the bottom of the market." If his scenario is the correct one, we would concur. If you have an interest in Mr. Turk's newsletter -- the May 18th a particularly strong issue -- write James Turk, P.O. Box 5002, North Conway, NH 03860. That's it for today. We'll update if the markets gear up in any distinguishable way. ÿ