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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Bill Murphy who wrote (2855)	1/1/1999 8:44:00 AM
From: ForYourEyesOnly	Read Replies (2) \| Respond to of 82162

METAL COMMENT FOR DECEMBER 31, 1998 Hi Bill! Happy New Year! May 1999 be the DAWN OF THE AGE OF MIDAS!! I recently noticed that Martin A is available for discussion/debate on the chat section of the PEI website. Perhaps you might want to visit and challenge him to a friendly duel this year......that would be highly interesting indeed! Good luck to all, THC FWIW website: lfgllc.com CLOSES METAL DEPOSIT RATES (based on 30 day maturities) February Gold $288.10 March Silver $ 5.035 GOLD 2.00% January Platinum $361.40 SILVER 2.50% March Palladium $327.85 PLATINUM 4.50% DAILY COMMENTARYGENERAL COMMENTS: In quiet holiday markets, the precious metals were mostly higher with silver, which had a very good day yesterday, unchanged. Platinum and palladium were nicely higher with platinum now convincingly closing over $360.00 basis cash. It was very slow today, in fact, there was a 12 minute period in which gold did not trade on the floor. That's slow. Some very interesting news came out of India this morning. Officials in India are searching for a way to mobilize the enormous investment funds that go to buy precious metals in that country. While details are not clear on how they plan to go about such a plan, there were some very striking comments. India, the world's largest consumer of gold imported over 700 tons of gold this year for personal investment purposes. That is about 6.5 Billion dollars and believe this or not, this amount is higher than it's import bill for oil. The citizens of India have absolutely no confidence in their currency and they spend more money, per capita, on gold than oil. Think about this one for awhile. The funds are heavily short gold amidst an environment where all market participants are concerned about the possibility of central bank sales by entrants into the ECU. After all the countries involve contribute their quota of gold into the supernational reserves, about 13000 tons of gold will be left in national coffers. The ECB (European Central Bank) is expected to announce guidelines on reserve management before year end. This point was reiterated today by an Australian government department who said that the impending euro will have an adverse effect on the gold market. This may be true but we could just as easily “spinEthe story the other way. Only time will tell. Well, it has been a couple of weeks since we had a strike at the South African Platinum mines. So, the NUM (National Union of Mineworkers) is striking a mine owned by Amplats (the largest producer in the world) and this strike is expected to spread to other mines owned by this firm. These strikes may curtail short term production but none this year has really made a difference in yearly production so this is truly a non-event. So far, that is. There was an important meeting between the two sides yesterday and both participants expect the strike to be solved shortly. However, please note that this mining complex produces 40% of the world's supply. Should the strike last a couple of more weeks, it would get very very serious. We remain very bullish on platinum and palladium. We are seeing a lot of interest in our reverse repurchase agreements, which, on an economic basis, allow an investor to capture current lease rates. Most of the interest is in 1 year platinum. Think of this, not only do you benefit from the possible rise in price of platinum over the next year, but you can receive a stream of income of about 5.25%, well above some certificates of deposit and money market funds. We like this trade for conservative investors.GOLD YESTERDAY'S RECOMMENDATION: As a cheap speculation, traders who follow our recommendation bought Feb 315 calls at .70 per ounce, now trading at .10 cents. Gold broke through its support at $287 but did hold at $285.00. If gold does not break soon, we would be buyers at these levels, but there is no reason to “pull the triggerEuntil next year. RECOMMENDATIONS: none.SILVER YESTERDAYS RECOMMENDATION: We advised aggressive traders to sell March 475 silver puts at 10 cents or better and they closed at 6 cents. We still like this trade. Look to cover at 2 cents. Silver closed unchanged but had a constructive day with its second close over the 100 day moving average. I have a feeling in the pit of my stomach that something very interesting will happen shortly. Resistance overhead is at $5.10 and major resistance is at $5.20. We have been recommending the physical purchase of silver at anything under $5.00 per ounce and we still feel that this would be quite advantageous. Please note that most physical investor-related precious metal products are selling at enormous premiums and should be swapped into lower cost items at this time. Please call or email the trading desk for specific recommendations. Silver can be placed into IRA accounts. RECOMMENDATION: none. PLATINUM YESTERDAY'S RECOMMENDATION: Our recommendations have our clients long 3 units of January Platinum at $345.70, now up about 16 dollars. We still believe that there is a lot of room left. Use a stop on 1/3 of the position at $339.50. Sell one third of the position at $367.00. A very big day for us with the “boat fully loadedE We went through resistance and should go higher now. Follow recommendations above. RECOMMENDATION: as above. We strongly recommend the physical unleveraged purchase of platinum for conservative investors under $350.00 per ounce. Naturally, all investors who hold precious metals should look into our reverse repurchase program whereby they can capture current lease rates. It makes no sense to own physical precious metals without gaining a stream of income. Please call with any questions.PALLADIUM: YESTERDAY'S RECOMMENDATION: Aggressive traders who followed our recommendations bought Dec Palladium at about $278 and are up about $50(about $5000 profit per contract) at present. This recommendation was specifically targeted for aggressive traders who have a high tolerance of risk. First target is $335. A very sharp rally on very low volume. Still, up $6 ain't bad. We are now within striking distance of our goal of $335.00. RECOMMENDATION: none. Leonard KaplanChief Bullion DealerComments are solicited at lkaplan@lfggold.com Futures Trading is for individuals willing to accept a higher level of risk for the opportunity of greater returns. This information is obtained from sources considered reliable, but its accuracy is not guaranteed by LFG Bullion Services. The recommendations reflected are those of LFG Bullion Services and are based upon circumstances it believes merit such recommendations. It is possible that individual brokers of LFG, LLC may disagree with our opinions based on their current commodity research analysis or the analysis of commodity trading advisors. Expressions of opinion are subject to change without notice. Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of LFG Bullion Services. There is a risk of loss trading futures. You should carefully consider the risk associated with futures trading in light of your specific financial position. Past performance is no guarantee of future performance.

To: Bill Murphy who wrote (2855)	1/1/1999 4:45:00 PM
From: m.philli	Read Replies (1) \| Respond to of 82162

An editorial from Singapore Business Times Jan/99 Time for a new exchange system S TATESMANSHIP is a quality that seems to be in short supply these days in the world of international monetary affairs. So when Japanese Finance Minister Kiichi Miyazawa attempted to fill that gap last week by proposing a series of monetary reforms, his was a voice crying in the wilderness. But sooner or later, such voices will have to be heeded. Mr Miyazawa made several sensible suggestions in a speech on the need for a new international financial architecture. He proposed inserting some real discipline -- rather than so-called market discipline -- into the management of exchange rates among the world's major currencies, and he suggested that monetary cooperation needs to be enhanced at the regional level. The problem on the first of these two issues is the United States is too busy trying to maintain the hegemony of its dollar and the ascendancy of market principles to give time to suggestions for more formalised exchange-rate cooperation. And Europe is too preoccupied with trying to establish the credentialsof the euro versus the dollar to look beyond its own shores. Yet, if we are to have a bipolar global currency regime -- or a tripolar regime if the yen is included -- to which other nations will inevitably link their own currencies in some combination, then it is clearly essential that exchange rates between these principal reference currencies should be stabilised. The Asian crisis has illustrated only too vividly how swings between one reference currency and another can wreak massive damage. Moreover, the fact that hedge funds can build up massively leveraged positions in major currencies and then have to be bailed out when rates shift rapidly against them, is further evidence of the need for reform. As Mr Miyazawa said, the need is to "create an exchange-rate regime that will bring about greater stability on the one hand and needed flexibility on the other". It should not be beyond the wit of the world's financial leaders to devise a system of target rates or exchange bands in which major currencies would be permitted to move with respect to one another before inviting official intervention. A banding system (rather than pegged rates) would mean that speculators would take a much bigger risk if they attempted to attack one of the currencies, and the pooled reserves of the US, Europe and Japan could also deter speculation. As for Mr Miyazawa's suggestion that a series of regional currency funds should be established, in Asia, Latin America and elsewhere, to provide a "bulwark" against speculation bycreating a pool of regional reserves, this idea, too, seems to represent a legitimate approach. Regional economic cooperation is currently limited to the areas of trade and investment in Asia and elsewhere, whereas the International Monetary Fund (IMF) in effect claims a monopoly on monetary cooperation. This is tantamount to the World Trade Organisation attempting to prevent trade cooperation from taking place within Asean, Nafta or other such forums. Reserve-rich nations It is entirely logical that countries such as those in East Asia which trade and invest heavily among each other at the regional level should have institutionalised forms of monetary cooperation. Reality dictates that Japan or China or others among Asia's more reserve-rich nations have a greater vested interest in monetary cooperation with their neighbours than they do with countries outside this region. But they need to create mechanisms to exercise such cooperation. The IMF (pushed on by the US Treasury) opposed an Asian Monetary Fund in September 1997 on the grounds that it would compromise IMF loan conditionality, and that the existence of a pool of regional reserves to meet crises could create moral hazard. It can be argued that IMF conditionality has been badly compromised anyway by its own bungling. Likewise, the very real damage inflicted by currency speculation outweighs the arguments about the potential moral hazard created by putting in place mechanisms to deter speculation.