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To: PaulM who wrote (21763)	10/15/1998 9:16:00 PM
From: David R. Schaller	Respond to of 116786

PaulM, I can't believe that WB hasn't completely evaluated all the available sources of silver and how much was overhanging the market and even how much was apt to come loose at various spot prices. He's one of the most sagacious investors on the planet & wouldn't buy 30m oz without having had the best minds and information available to back up his play. Just my opinion, Dave

To: PaulM who wrote (21763)	10/15/1998 9:31:00 PM
From: goldsnow	Respond to of 116786

In the mean-time Dollar is getting lighter and Commodities heavier... Dollar Slips vs Major Currencies After Fed Unexpectedly Lowers U.S. Rates Dollar Slips After Fed Unexpectedly Lowers U.S. Interest Rates Tokyo, Oct. 16 (Bloomberg) -- The dollar fell against major currencies after the U.S. Federal Reserve unexpectedly cut benchmark interest rates to keep the U.S. economy from slowing too much amid turmoil in global financial markets. Lower U.S. rates reduce returns investors can get on their dollar-denominated deposits, though they help the economy by making borrowing costs cheaper for banks and companies. ''I'm afraid the dollar will slip below 110 yen today,'' said Takeshi Hanai, a foreign exchange manager at Industrial Bank of Japan Ltd. ''People will sell dollars because the U.S.-Japan rate gap is narrowing.'' The dollar fell as low as 115.40 yen and recently traded at 115.93 yen, little changed from 115.80 yen in late New York trading yesterday. It was quoted at 1.6112 marks, down from 1.6131 marks in New York. The Fed's policy-setting Federal Open Market Committee yesterday cut the rate target for overnight lending between banks by a quarter percentage point to 5.00 percent. It was the second quarter-point cut in the last 17 days and the first time the Fed changed interest rates between official FOMC meetings in more than four years. The Fed Board of Governors also reduced the more symbolic discount rate for Fed loans to banks by a quarter point to 4.75 percent, after holding it steady at 5 percent since January 1996. IBJ's Hanai said the federal funds rate on overnight loans between banks could fall as much as another 1.5 percentage points in coming months. ''Because the U.S. has entered the phase of monetary easing, the dollar is poised to weaken,'' he said. Positive Impact Not everyone is convinced the dollar will keep falling, because the Fed's action could calm financial markets and prevent a credit crunch. U.S. stocks and bonds surged yesterday, with the Dow Jones Industrial Average rising 4.2 percent to 8299.36. A rally in U.S. securities boosts demand for dollars to buy them. ''In the bigger picture the cut is a positive for the U.S. dollar, but the immediate reaction is to sell,'' said Andrew Willett, a currency trader at Colonial State Bank in Sydney. ''Overall, it's got to be positive for the U.S. banking system as the cut will provide stability in financial markets and relieve the pain in emerging markets.'' The dollar last week posted its biggest weekly decline since 1971, falling 14 percent, as hedge funds bought yen to pay back loans that financed investments in global financial markets. The funds -- which speculate in stocks, bonds and currencies on behalf of wealthy investors -- borrowed yen at Japan's record-low lending rates in the past three years and then converted the proceeds into dollars for investment elsewhere. As Asia's economic crisis spread to Russia and Latin America, the funds were forced to reverse these so-called yen- carry trades to pay back the loans. As their global investments turned sour, lenders to the funds were also hurt. In Japan In Japan, the central bank has kept the discount rate at a historic low of 0.5 percent since September 1995. The Bank of Japan isn't likely to raise it anytime soon because the country is in its worst recession in more than 50 years. The record-low Japanese rate helps prevent the dollar from plunging against the yen as Japanese sell yen to invest abroad for higher returns. Daiwa Securities Co., for instance, received about 1,000 requests from customers via the Internet to invest in dollar- denominated money market funds between Wednesday and Friday last week. That's when the dollar reached a 16-month low of 111.58 yen. The company usually gets just 30 to 50 requests per day. ''We were quite surprised,'' said Masato Kuroda, a spokesman for the brokerage. ''Because it was through the Internet, not through our salespeople, the investment decision was 100 percent based on the customers' own outlook on the dollar. We didn't say a single word about 'Now is the chance to buy.''' In other trading, the dollar was quoted at 1.3100 Swiss francs, down from 1.3256 Swiss francs in late New York trading yesterday. The British pound was quoted at $1.7113, up from $1.7090 in New York. The mark was quoted at 71.87 yen, up from 71.81 yen in New York. bloomberg.com