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To: Terry Rose who wrote (18884)	9/14/1998 11:03:00 PM
From: PaulM	Respond to of 116756

Gold is an Underperforming Asset - Oppenheimer biz.yahoo.com

To: Terry Rose who wrote (18884)	9/14/1998 11:07:00 PM
From: PaulM	Read Replies (1) \| Respond to of 116756

Terry, I still feel we are in a dollar bear for the fundamental reasons set out in previous posts. No market ever goes in a straight line forever, so two days of dollar strength isn't surprising. What is surprising is 16 months of dollar gains wiped out in one eighth that time. The dollar may well outperform Mexican and Brazilian currencies, but that's about it.

To: Terry Rose who wrote (18884)	9/15/1998 12:06:00 AM
From: Alex	Read Replies (3) \| Respond to of 116756

I read privateer Friday also. He seemed to feel that the market turmoil would be over for a spell with the Starr report out and a new Russian P.M., if I recall correctly. Maybe I took it wrong, but it seemed he had turned negative on gold short term. Hope not................. Allies stay distant from Primakov By James Meek in Moscow Tuesday September 15, 1998 Yevgeny Primakov's weekend honeymoon with the politicians who brought him to power ended yesterday as the liberal Yabloko movement and the Communist Party distanced themselves from the increasingly contradictory aims of the new prime minister's government. Yabloko's leader, Grigory Yavlinsky, without whom Mr Primakov would never have risen so far so fast, turned down a job in the new cabinet, saying sarcastically that it would make him "second first deputy prime minister". The post, he said, would put him into direct conflict with the "first first deputy prime minister", Yuri Maslyukov, a Communist who believes the solution to Russia's economic crisis are protectionism and rapid, cheap rouble loans to industry. "The government shouldn't be a debating club, and conflict within the cabinet is impermissible in the present circumstances," Mr Yavlinsky said. Despite Mr Maslyukov's leading role in Mr Primakov's plans - yesterday he took over the office suite previously occupied by the archetypal "young reformer" Boris Nemtsov on the fifth floor of the government building - the Communists too are wary of identifying themselves too closely with the new regime. The three-party alliance which the Communists lead said in a statement that it would not be putting forward candidates for the government and would concentrate its energies on a day of protest on October 7 to demand the resignation of President Boris Yeltsin. Already, with his government barely half-formed - Mr Primakov said he would have a full list by the end of the week - serious policy disagreements are emerging on such core policy issues as whether to increase the rouble supply, stoking inflation, or stick to the tight-fisted supply-side policies which have kept a trickle of IMF credits coming at the expense of an economy sucked dry of liquidity. Viktor Gerashchenko, the new head of the Russian central bank and a figure regarded with ill-disguised contempt in Western financial circles, has already said there will need to be a "small, controlled" injection of roubles into the economy to pay off debts and compensate Russians for the collapse of the currency. He was directly contradicted yesterday by the acting finance minister, Mikhail Zadornov, who is likely to keep his job. "We would prefer not to resort to central bank credits," he said. Addressing his first cabinet meeting yesterday, Mr Primakov soothed, stirred and reassured but was short on specifics. He talked of "extraordinary measures" to solve the problem of wage and pension arrears "once and for all". But did not say what they might be. He denied that the new government would be communist, or even centre-left, or would seek to isolate Russia from the rest of the world, saying it would be "a national and a patriotic government, which must be concerned for Russia's interests". He spoke harshly of the "shock therapy" policies of his predecessors - Yegor Gaidar, Viktor Chernomyrdin and Sergei Kiriyenko. "If the 'therapy' stretches out for almost a decade and there's no sign of improvement, then of course it's not in the interests of the country or the people," he said. Mr Primakov appears to be setting the stage for Mr Maslyukov to realise his long-cherished dirigiste dream of mass rouble investment to revive industry, combined with tarriff barriers to protect Russia's inefficient producers. But the programme Mr Maslyukov drafted for the Communists during the 1996 presidential election campaign also included the questionable assumption that the IMF would go on supporting an expansionist, inflationary Russia. Before he headed the state planning ministery Mr Maslyukov was chief engineer at the Soviet Union's main factory producing Kalashnikov rifles. He may overestimate the ability of Russia's still vast military complex, collapsed farms and feeble consumer-goods plants to benefit rapidly from cheap credits and protectionism without massive waste, shortages, pilfering and the further decay of stagnant communities. Despite the reputation of Mr Gaidar and Mr Chernomyrdin as industrial wreckers, they were never able to bankrupt or shut down more than a handful of enterprises. Despite its shrivelled defence budget, for instance, Russia still has four working shipyards designed to produce nuclear submarines. The United States has only one. reports.guardian.co.uk