For some reason the NBR Market Monitor of last Friday was only recently available. Since gold is so sick I thought that posting this interview of James Dines may comfort gold bulls. Enjoy.
"Market Monitor"-James Dines
PAUL KANGAS: My guest market monitor this week is James Dines, editor and publisher of the well-known "Dines Letter" based in Belvedere, California. Jim joins us from nearby San Francisco. Welcome back, Jim.
JAMES DINES, "THE DINES LETTER": Oh, thanks. Good to work with you again Paul.
KANGAS: In each of your visits with us over the last two years, you predicted a currency crisis would begin in Asia which would result in a host of devaluations. I compliment you on your clairvoyance.
DINES: Thank you.
KANGAS: You also said there would be collapses in real estate and banks which seems to be the case presently. And you went on to predict that a trade war would develop. Is that what we're seeing now-the beginning of one?
DINES: Yes. This is like the 1930's Smoot-Hawley Act of trade barriers, tariff walls, where each nation now is devaluing against the U.S. dollar to gain a brief trade advantage. And it's a game of fools, because it's going to end badly.
KANGAS: Well, your final prediction last time you were with us was that there would be a major gold crisis. That seems to be a bit of, you know, somewhat self-serving, since you have been recommending the purchase of gold and gold stocks for a long time, and they've done little but go down in value. What do you mean, "gold crisis," and why?
DINES: Cross my palm with silver, and I'll tell you. Well, at some point when they realize that higher interest rates will not solve this currency collapse, the central bankers are going to have to go back into the open market and buy gold. And when they do, it's going to cause a gold bull market, the likes of which has never been seen before on earth.
KANGAS: All right. Now, what about Japan? The big meetings are this weekend. Is Japan going to be able to extricate itself from this thing anytime in the near or intermediate term?
DINES: Absolutely not. We flashed a major "sell" signal in 1989 at 38,000. I've had my subscribers out of there ever since. I have took my subscribers out of Asia in 1993, out of emerging market funds. Stay out of that area. They have no idea what's causing the crisis. It's a currency crisis, because the currencies are not backed by gold. They're running the printing presses like crazy. And I'm very upset that I have failed to transmit that communication to the world. They just don't get that there's a connection between dumping gold and these currency crashes. And-just in case there's somebody from any government watching me-watch me.
KANGAS: OK.
DINES: Dump Gold-Currency Crisis. Connect the dots.
KANGAS: I guess not too many subscribe to your letter up on Capitol Hill or something?
DINES: No.
KANGAS: What about our market here?
DINES: Well, over the last few years on your show, I've been calling this, "the mother of all bull markets."
KANGAS: Is it still intact?
DINES: Pardon?
KANGAS: Is it still intact?
DINES: It's still intact, unless it got down to 82000, or 8200, I wouldn't be concerned. And I'm looking for a blistering summer rally. I would stay away from anything to do with personal computers, especially semiconductors. But the rally will be led by Internet and telecommunication and gold stock-gold groups.
KANGAS: OK. The last time you were with us, January 16th, you recommended Keane (AMEX:KEA) which trades on the American Exchange. It was 38 then. Now, it's 49. Do we take some money away from that one?
DINES: No. I love that one. That's a Year 2000 millennium bug thing.
KANGAS: OK. It was up 3 points today, incidentally.
DINES: Oh, I like having that one.
KANGAS: We like Stillwater (NASDAQ:PGMS) at 19. It was-it's now 27. Good recommendation. What do we do with that?
DINES: Oh, I'd buy more. That's my favorite Palladium platinum stock.
KANGAS: Well, our favorite, if anybody bought it back in January, was American Online (NYSE:AOL) at 46. And it now has more than doubled. Do we take some money off the table there?
DINES: Oh, no, no. That's, American Online and Amazon (NASDAQ:AMZN) are my two favorite Internet stocks. I wouldn't even consider selling those.
KANGAS: You like Franco Nevada (FN.TO) at 29 3/4. It's down to about 27. Not too bad for precious metals.
DINES: Oh, that's my favorite blue chip gold stock.
KANGAS: OK. So you're keeping all of those. Any new recommendations?
DINES: Yes. What I would do is, first of all, get into the Internet. And here's a package of new ones I'd get. CMG Information, (NASDAQ:CMGI). Cybercash, (NASDAQ:CYCH). ONSALE, (NASDAQ:ONSL). U.S. Web, (NASDAQ:USWB). And, At Home, (NASDAQ:ATHM). And I'd buy them as a group. And then the telecom, I'd buy two CLECs, or competitive local exchange carriers. ICG Communications (NASDAQ:ICGX). Intermedia (NASDAQ:ICIX). And finally, Intasys, (NASDAQ:INTAF) which is a $3 stock with great growth. And then I'd hedge that with the golds, that I've mentioned.
KANGAS: OK. Now, ...
DINES: That's a great portfolio.
KANGAS: So you're saying the blue chips be damned.
DINES: Oh, no! The blue chips, anything that's a receptacle of the mass fear coming out of Asia. I laid all this out in my book, "Mass Psychology." The mass fear will stampede the money here. And that's what's causing, that's why those areas are so strong. And other areas, like low-priced natural resource stocks are so low.
KANGAS: OK. Quickly now. Would you buy bonds here?
DINES: Yes. I've been bullish on your show for the last few years.
KANGAS: Right.
DINES: But I'm looking for a top in the bond market, sometime in the next year. But I haven't flashed it yet.
KANGAS: All right. So the bull market lives on.
DINES: It certainly does.
KANGAS: All the money's coming here, OK. (LAUGHTER) Thanks, Jim.
DINES: My pleasure.
KANGAS: My guest, market monitor, James Dines of "The Dines Letter."
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The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT.
Information presented on Nightly Business Report is not and should not be considered as investment advice.
(c)1998 Community Television Foundation of South Florida, Inc.
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