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

To: Enigma who wrote (21781)	10/16/1998 1:27:00 AM
From: Sergio R. Mejia	Respond to of 116785

"dollar to get crushed and gold to shoot higher" - "Greenspan is going to go down as one of the most irresponsible Fed chairmen of all time" - "unless something catastrophic happened between now and the next FOMC meeting, they wouldn't change rates. Something major is brewing in the bad news department" - a story in the Washington Post (the official Fed leak source) Tomorrow is option expiration. Most of the narrow indexes (Nasdaq 100, Sox, MSH, BKX etc.) expire based on the opening prices. If you were going to do something to cause the most aggravation, it would be in the last 45 minutes on a Thursday afternoon before expiration, while the rest of the world was asleep. Either the Fed is stupid (and we can make a pretty good argument for their lack of wisdom, as I have documented in past Raps) OR it intended to MANIPULATE the stock market WITHOUT the discipline of the dollar getting hammered or the gold market rallying. It is unclear what its motive was, but naivete or stupidity is hard to believe. Bad news brewing... We have now seen a stupendous turnaround from last Thursday. However violent the selling was a week ago, the buying has been just as aggressive. Some of the big names that I follow have rallied 40-50 percent in the space of five sessions. Obviously the rumors about Bankers Trust (BT), Lehman and BankAmerica (BAC) et al. being in huge trouble, must be true. To compound matters, there was a story in the Washington Post (the official Fed leak source) that quoted an unidentified Fed official as saying that unless something catastrophic happened between now and the next FOMC meeting, they wouldn't change rates. Something major is brewing in the bad news department. I have said in the past that Greenspan is going to go down as one of the most irresponsible Fed chairmen of all time, and I stand by those words. Some would say that of course, we need to ease, but the reason we are in this predicament is because we created too much money and a bubble. Creating more liquidity does not solve that. Once you have 40 shots of tequila, the best way to drive home is not to have another 40 so you don't feel bad. Take the money and run... Anybody who doesn't have to be in the market should take advantage of whatever rally ensues and get the hell out. Obviously there are tremendously large problems in the world if the Fed panicked like this. You are going to see the dollar turn to confetti over time. All these problems are just going to pile up. Use this rally as a gift and take your money and run. I have no idea what is going to happen tomorrow, but I wouldn't be surprised to see a dramatic turnaround in stocks happen rather quickly once it starts. We are in uncharted waters. I expect the dollar to get crushed and gold to shoot higher. The Fed has no respect for markets, as it sees fit to manipulate them all. A currency crisis lies ahead. When your currency goes bad you are sunk: Just ask Asia, Russia and Mexico. Whatever manipulation the Fed attempts will be short-lived. Stocks aren't pieces of paper they are shares of businesses. Should they be worth more because big trouble is coming? Currencies are just paper and without sound policies they are worthless. Two thousand years of history show us one certainty: All paper currencies go to zero. Greenspan has accelerated the process while accentuating and abetting reckless and destructive speculation. Remember that he is supposed to know what the banks are doing. Once again he was asleep while they engineered themselves into a position to implode (see yesterday's Rap and link). Now that that giant mistake (and really this is all an extension of bailing out Mexico in 1994) has erupted, he is pursuing the same policies that got us into this jam in the first place. The stupidity and arrogance is nauseating. Our children all will pay for his incompetence. ENOUGH IS ENOUGH. Somebody get Volcker back before it is too late. As I see it I thought I would share with you the name of a very good analyst, John Doody, who puts out a terrific gold research letter. Anybody who is going to own gold should make the few- hundred-dollar investment for his research as he puts out the best product. I have a lot of confidence in his research, which is the most thorough. If you are going to be making an investment decision, you should do some research on your own. Don't just rely on what Wall Street tells you or what you read in my piece. I have had a lot of e-mails asking me about gold since I made the case back on Sept 2. I would encourage you to ask him the questions, as he is more knowledgeable than I am. William A. Fleckenstein <fleckenstein@go2net.com>, special to StockSite. stocksite.com

To: Enigma who wrote (21781)	10/16/1998 4:25:00 AM
From: IngotWeTrust	Read Replies (1) \| Respond to of 116785

Whilst U've no use 4me, this article re: China gov't gold advisor shd shed some light. Here's the quote, E, you're looking for so that you can "believe Bill's sources!" WAY TO GO, BILL MURPHY!!!! "Liu Shanen, vice director of the Gold Economic Development and Research Institute of the State Metallurgical Industry Bureau, recommended that the People's Republic should increase its gold reserves from the current level of 397 tonnes or 3% of total foreign exchange reserves of $140.5 billion to between 1,000 and 1,500 tonnes, between 6% and 8% of external reserves, "to prevent financial risk." The reasoning behind this recommendation is apparently the belief that China should cut its holdings of dollar-denominated foreign reserves to guard against a possible fall in the dollar on the introduction of the Euro, the single European currency, at the beginning of next year. China currently holds about 60% of its external reserves in US dollar- denominated assets, including about $60 billion in US Treasury bonds. "Compared with cash, gold is stable and safe," Liu Shanen said. He also recommended that the Chinese government should ease controls on buying and selling by individuals in a bid to boost what he described as "non-governmental" reserves. Liu Shanen pointed out that China ranks third in global consumption of gold and fifth in mine production, but only twelfth in terms of its official reserves in gold.