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To: Zardoz who wrote (33927)	5/14/1999 6:51:00 PM
From: goldsnow	Respond to of 116810

Aha, cash, how about Gold? :) Venezuelans Withdraw Money From Banks, Stock Market as New Tax Is Imposed By Peter Wilson Venezuelans Withdraw Cash From Banks as New Tax Imposed Caracas, May 14 (Bloomberg) -- Venezuelans lined up to pull their money out of banks and opted out of the stock market to avoid a new 0.5 percent tax on virtually all financial transactions that went into effect today. Venezuela is counting on the 0.5 percent tax to raise at least $1 billion this year. The proceeds would pay civil servants a 20 percent wage increase and narrow the country's budget deficit, estimated at up to $9 billion. Folks seeking to avoid the levy, though, may steer clear of the financial system, frustrating officials' plans. Banks could be left lacking deposits and the tax collector short of its projected take, ''I'm taking all of my money out and putting it under the mattress,'' said Patricia Santander, an employee at the national phone company, who was in one long bank line. ''This is going to hurt the working class worst.'' Stock traders business also nosedived. The first day of the new tax had an immediate impact on the Caracas Stock Exchange where volume tumbled, as investors cut back purchases, opting to buy the American depositary receipts of Venezuelan companies to avoid the tax. ''The tax is having an immediate impact,'' said William Boulton, a trader with the BBO Casa de Bolsa brokerage. ''Volume has suffered; all of our clients are aware of the tax.'' Trading Traded in CA Electricidad de Caracas was 1.92 million shares, one fourth its a year-to-date average daily volume of 7.4 million shares. Electricidad is one of more than a dozen companies whose shares trade abroad. Stock traders said the new tax is expected to hurt Venezuelan stocks, as it could be charged up to five times on each share transaction among domestic investors: It would be collected when a buyer pays the brokerage; when the brokerage pays the bolsa; when the bolsa pays the seller's brokerage; when the brokerage pays the seller, and then the seller would pay on his return. For sales or purchases involving foreign investors who need to exchange money, the surcharge will be 3 percent. ''This tax is going to hurt the markets,'' said Boris Molina, an analyst with Asesora Santander. The tax is being charged on all financial transactions, except purchases of Central Bank securities. The tax will automatically be collected by banks. The tax could slow the economy's recovery from recession, analysts say. To avoid paying the tax, many will try to keep as much money on hand, decreasing their deposits at banks. That, in turn, will limit the amount of money banks have on hand to lend. ''What you're going to see is that the average 'take' of a mugging or a bank robbery is going to increase as people are going to keep more money on hand,'' said Molina. ©1999 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks.

To: Zardoz who wrote (33927)	5/14/1999 6:52:00 PM
From: The Barracuda™	Read Replies (2) \| Respond to of 116810

I agree. The significance of the Canadian dollar is that it seems to lead gold by one to three days. On the very short term, the C$ seems to act like an oscillator. I think that since gold has been in a bear market, any decrease in the rate of decent of gold will cause a rally in the C$; Which is why we have seen C$.63 to C$.70 recently. Assuming Other non resource aspects of the Canadian economy are stable. Robert