I would like you to read this excerpt from Merrill Lynch's 10-Q filing....

"In light of the interdependency of the parties in or serving the financial markets, there can be no assurance that all Y2K problems will be identified and remedied on a timely basis or that all remediation will be successful. Disruption or suspension of activity in the world's financial markets is also possible."

"The failure of exchanges, clearing organizations, vendors, service providers, clients and counterparties, regulators, or others to resolve their own processing issues in a timely manner could have a material adverse effect on Merrill Lynch's business, results of operations, and financial condition."

" There can be no assurance that the costs associated with remediation efforts will not exceed those currently anticipated by Merrill Lynch, or that the possible failure of such remediation efforts will not have a material adverse effect on Merrill Lynch's business, results of operations, or financial condition. "

http://www.sec.gov/Archives/edgar/data/65100/0000950130...

=======

Now, I think it is very very plain that these people are making absolutely clear that ther e can be NO assurance whatsoever that your assets will be safe with them. Period. End of story.

In their press releases all is rosy. So I suppose that the Polyannas will just sneer and say that this is a typical disclaimer absolving them of any liability if they are wrong.

Think about that for a minute. It is NOT just a mere disclaimer. Read it again.

"In light of the interdependency of the parties in or serving the financial markets, there can be no assurance that all Y2K problems will be identified and remedied on a timely basis or that all remediation will be successful."

They have JUST stated EXACTLY what I have said all along. Only I said it far more succinctly.

"INDIVIDUAL COMPLINACE IS MOOT."

From day one, I have said that the complinace of any organization individually is meaningless. When **I** say it, I am castigated. When the Merrill Lynch Lawyers say it they are sage attorneys protecting their clients. You see, the banks have PROTECTED themselves from YOU if and when they fail. You are left holding the sack, the empty sack.

Do you get it yet? From the head high mucky-mucks at Merrill Lynch, they are telling you that NO MATTER what they do, no matter how much they spend, it means ABSOLUTELY NOTHING because of their third party dependencies.

Now to add salt to the wound they ACTUALLY say that there is no gurantee in regards to their own remediation efforts..

"There can be no assurance that the costs associated with remediation efforts will not exceed those currently anticipated by Merrill Lynch, or that the possible failure of such remediation efforts will not have a material adverse effect on Merrill Lynch's business, results of operations, or financial condition. "

They are saying that even though they 'think' they are remedaited, they could be wrong.

Why is this so significant? It is the same for any company. There are risks associated with Y2K. Risks that they say, flat out, that they can not control. Merrill Lynch is telling you that no matter what, you can not rely upon their compliance or even that they will remain in business.

Now think about your bank. Are they any different than Merrill Lynch? Nope. There is no way that they are not fully exposed to the effects of third party non-complinace. There is no way that they can assure you that their own remediation is successful.

So, let me ask you this. Do you have money in a bank? You do? Why? You worked hard for it didn't you? No bank can assure you under ANY circumstances that it will be safe becuase of Y2K. So why do you keep it there. I am sure that they will be most courteously apologetic if they fail and you lose every dime. And I am sure that they will point you at their disclaimers that told you they could not be ultimately responsible. You will find out, in the end, that the responsibility for your property was always, first and foremost, YOURS.

So in the end, it is a matter of confidence. It is a 'confidence game'. A "CON" game that the banks are playing with you. If they 'con' you into leaving your money in, you LOSE everything if they are wrong, and you lose everything EVEN if it was NO fault of theirs at all. You lose, everything, lock stock and barrel. You lose everything because your confidence was misplaced. You trusted an organization that 'conned' you into leaving your money there, while at the same time they told you that there was NO assurance that it would be safe. They con you because they know that they go out of business if depositors remove their money. They go belly up. So under ALL circumstances they MUST tell you it is OK to leave your money in for THEIR benefit , out of one side of their face, and out of the other, they tell you that there is not assurance ONE that your dough is safe.

So don't come whining and crying and weeping and gnashoing your teeth because you misplaced your confidence in a bank that TOLD you that they could not assure you your property's safety. You were the guy with the 'big brain' who could not figure out, that if you REMOVED your assets, they would be SAFE and you could re-deposit later if it was OK to do so..

Get you money out of banks NOW while you still have half a chance. Only the FIRST people to do so, will get their property back. Once the runs begin, you will be the fool in the back of the line weeping like a schoolgirl when you had all the opportunity in the world to secure your own property.

Like Merril Lynch AMPLY spelled out, your fault, my fault, no one's fault at all, you have NO ASSURANCE of the safety of your property while it is in their hands.

Only an IDIOT would take that risk with Y2K.

-- Paul Milne (fedinfo@halifax.com), July 25, 1999

Answers

No Paul,

They're just duped imbeciles that, like almost everyone else- have been raised in the faith and traditions of the Nanny State.

That is to say, they have never questioned or researched the institutions and situations that make up our modern-day Babylon.

They believe those in authority and power will take care of everything, including them.

The road to serfdom has been paved in Liberalism and complacency.

God help us all.

-- INVAR (gundark@sw.net), July 25, 1999.

Maybe, just MAYBE, it is the APOCALYPSE!!!

Babylon gone in AN HOUR!!!

-- K. Stevens (kstevens@It's ALL going away in January.com), July 25, 1999.

What is complinace?

-- $$$ ($$$@$$$.com), July 25, 1999.

Alan Greenspan said the same thing in 1995 (?). "99 percent readiness for the year 2000 will not be enough. It must be 100 percent."

Flint took great pleasure in pointing out Mr. Greenspan's sudden change of heart, by distancing himself from his initial analysis. I'm sure many here among us have had no trouble understanding why Greenspan might decide to 'sit down and shut up'. I personally believe this was the very reason de Jager did his little about-face. Mr. Flint himself, announced his intention to remove his money from the system....now that IS food for thought, coming from such a passive 'wait and see' type person, eh? I've always loved the hope some display for the *few* announcements made by a small percentage, of having met 'Y2K ready' status within an entire industry, which is desperately relying on others for it's survival, and of course, those being relied upon are heavily relying on others as well. The chain is only as strong as it's weakest link!

If you ask me, this statement by Merrill Lynch is one of the more honest reviews about their ability to become 100 percent compliant, free from disruptions. There have been others from different industries (oil, electric, phone) but none that I'm aware of coming from the financial. They stepped around the issue of importing bad data, but hey, this is far more honest than any I've seen yet from the money gurus. Have there been any similar from this industry?

Please consider this aspect of Y2K carefully. It's very difficult to say what kind of time frame you may be dealing with here.

-- Will continue (farming@home.com), July 25, 1999.

WHOA! Hold the phone!

Merill Lynch is definitly a 'Get It' organization. They spent over 400 million on Y2K remediation efforts. They started on Y2K years before it became the 'in thing to do'. They, like other huge institutions like Fidelity have a vested interest (were talking trillions of dollars) in keeping their systems up. If I were you, I'd worry about the smaller S&Ls that didn't have the hundreds of millions of dollars that the big guys spent to fix this.

Don't confuse standard 'legaleze' with their actual preparedness. ALL major companies that provide Y2K statements leave loopholes and disclaimers. THAT HELPS TO KEEP THEM FROM BEING SUED if there is a minor outage. A few hours of downtime for a big brokerage amounts to millions of dollars a minute that is lost.

Have you ever read a Y2K statement that leaves no legal loopholes? My company issued a statement, we also do internal tests to show 'due dilligance'. This doesn't mean we haven't done months of testing.

-- Bryce (bryce@seanet.com), July 25, 1999.

One other thing..

You say that we shouldn't trust any bank. What option does that leave the average american. I have a great deal of my money in 401Ks. If I were to cash them out tomorrow, I'd automatically give Uncle Sam my full withholding and a 10 percent penalty for early withdrawal. Uncle Sam gets enough of my money already!

Were talking about my taking a hit for one hell of a lot of money TODAY as a pre-emtive move for something that may not be to severe TOMMOROW.

-- Bryce (bryce@seanet.com), July 25, 1999.

Standard Milne Operating Procedure. As Bryce correctly points out, *every* corporation includes similar boilerplate. The future cannot be guaranteed, ever. Lawyers recognize this. A lawyer wouldn't guarantee the sun will rise tomorrow.

So we have three paragraphs that say (1) There might be some bugs we missed; (2) We might be affected by bugs others missed; and (3) If there are, it might cost more to fix them. Lawyers are very good at stating the obvious as part of the standard corporate CYA.

Look, when you buy most packaged software, the license agreement you implicitly accept by opening the package contains legalese that amounts to "This software is not guaranteed to do anything whatsoever, and any problems you may have are yours and not ours."

Does this mean the software *will* do nothing and you *have* been ripped off? If that were true, we wouldn't use software!

Read any IPO prospectus, and you'll find standard boilerplate that says "This company may go broke tomorrow and you'll lose every penny", albeit dolled up in legalese.

Milne recognizes that this is, in fact, a standard disclaimer. *Everyone* now includes it. It's absolutely true that there are NO assurances about the future. There never are. Milne is trying desperately to equate "the worst can't be ruled out" with "the worst is guaranteed to happen". This is like saying that just because there is no guarantee that your house won't burn down, therefore there IS a guarantee that your house WILL burn down. A clear, flagrant logical blunder of the first order.

For 'a', is this deliberate logical error a distortion? Is the bear Catholic? Doh!

-- Flint (flintc@mindspring.com), July 25, 1999.

Flint, its neither a logical error nor a distortion. Just because most companies are issuing this disclaimer does not negate or disprove Pauls rant. Try again Flint, this time addressing the issues expressed in the ML statement and not comparing civilization's entire financial system to a copy of Lotus 123.

-- a (a@a.a), July 25, 1999.

'a':

Rereading, I see that I did exactly as you are requesting. I didn't compare the world's financial system to Lotus 123. I used packaged software as *yet another* illustration of the ubiquity and meaninglessness of legal boilerplate.

Milne's distortion of this boilerplate into a *prediction* is a clear, obvious, stupid, logical error. It is not a prediction, it isn't intended as one. It is not a description of anything either, and not intended as one. It is purely and simply a legal CYA, that lawyers stick into everything.

If Milne could find anything in this report implying that ML has any known problems, he'd at least have the *basis* for a case, though he'd surely exaggerate it if it existed at all. That he must attempt to fabricate his case out of whole cloth, on the basis of a rubber- stamp legal disclaimer, is indicative. This is the best he can come up with? Sorry, his emporer is butt nekkid.

-- Flint (flintc@mindspring.com), July 25, 1999.

The first paragraph illustrates the problem ML is facing. Being external instead of internal does not make it any less dangerous to the corporation.

"Disruption or suspension of activity in the world's financial markets is also possible."

As these companies issue these stamped-out disclaimers and abandon all responsibility for the protection of the investor-depositor, then I accept that I am on my own and that I will take appropriate measures.

On the one hand they tell me everything is fine and on the other hand they take no resonsibility for failure resulting in the loss of my money. They are in a win-win situation. So am I. They do not have my money.

-- Mike Lang (webflier@erols.com), July 25, 1999.

Paul:

BankBoston/Fleet has been very explicit along the same lines of thought, specifically pointing out (in detail) the many "risks and uncertainties" that the banking industry faces, including BankBoston. I'll find the hot link for you if you wish, just lemme know.

Flint:

I've never heard of any bank, any time in the history of banking (from the Venice bankers till today) talk about "RISKS" and "UNCERTAINTIES" and "NO ASSURANCES" with "MATERIAL ADVERSE EFFECTS" (please think YOUR money) and "SUSPENSION OF ACTIVITIES" (read 'we do have your money but we won't give it to you or let you use it') and "DISRUPTIONS" ('here now you sissy crybaby, have $1000 per month of your money, not more'). We are talking about Merryl Lynch and BankBoston, the best students in the y2k class!! Flint, your analysis constantly violates common sense, the least common of all senses apparently. And you are also a bit contradictory buddy, 'cause you have made it very clear that you will be taking your money away from the bank anyway, as much as you can, and if you had more you would also withdraw it, or so you've said to me in this forum. So you must have most serious second thoughts on this subject matter, or a hidden agenda, or both. Right Flint?

(3) Bryce, it's your choice guy. It's like paying insurance to hedge yourself against what evermore seems to be a most probable event. Do not complain later sir. You have PLENTY of info right now before your very eyes to make up your own mind. Yes Bryce, life's a bitch and then you die. Welcome to the 21st. century.

(4) Everyone, please go to the following hot link and check out for yourselves the bank run probabilities based upon official US Census Bureau data and Federal Reserve Board information. You input your own assumptions and you get a solid answer back:

http://www.y2knewsw ire.com/cashcomputer.asp

The underlying algorhythm can actually be improved and it is quite conservative by the way, for several reasons. For example, it DOES NOT take into account foreign US dollar cash demands from western Europe, Japan and cash-rich countries in Latin America, Asia, and the rest of Europe, where cash sometimes is 80% of GDP (Argentina, Indonesia, India, etc.). This is of utmost importance and it would make things far worse because the Fed would have to take care of foreign US dollar cash demands as it happens to be the 'store of value' currency worldwide, which means that we can all expect bank runs and/or abnormal cash demands EVERYWHERE. Remember, the globalized economy is a two-way avenue.

(5) Bank runs and/or abnormal cash demands will, at least, generate the following

(a) Sharp contraction of the international banking system (the US banking system is no exception, sorry) with its corresponding, unprovisioned costs and cascading cross-defaults. The fractional reserve banking system (only 1.7% liquid) is simply not designed nor prepared for such unforeseen stresses. Furthermore, interconnected bank loans (domestic and abroad), foreign debts, etc., do not allow for ANY ONE bank nor group of banks to be safe from Y2K and,

(b) Serious distribution problems, because physical printing and severe conceptual disruptions are only part of this "mission impossible". Distributing to physical points of demand (worldwide) is something else. There are not enough armored vehicles and/or personnel for continuous replenishment of empty ATM's, branches, etc., worlwide. There is no viable Plan B for this scenario.

Take care

-- George (jvilches@sminter.com.ar), July 25, 1999.

Mike: LOL

Flint: What do you want? A full page ad by ML telling you to cash out of the market? ROTFLMAO As I said earlier Flint, some of us are no longer satisfied with your "Nobody Knows" noises and have moved on to the "What If" stage.

-- a (a@a.a), July 25, 1999.

George:

These disclaimers are now a legal requirement. As laws (or regulations) change, organizations change with them. Milne is using legal compliance as proof of the future. It's a joke.

'a':

There's no difference between "nobody knows" and "what if". If we knew what was coming, there wouldn't be any "if". Gamblers know the odds precisely (in many cases), and know that the odds lie with the house. Yet they gamble anyway, and almost half of them win. In the case of y2k, the odds can at best only be guessed at wildly.

Just because you and your superego Milne have traded certain doubt for irrational conviction, doesn't mean the doubt isn't there. It only means you have chosen to blind yourself to it. "Nobody knows" is the truth, whether you can handle it or not.

-- Flint (flintc@mindspring.com), July 25, 1999.

Newbies, lurkers, please be advised that Flint DID NOT address any of my points.

By the way, it is not legally required to publish boilerplate disclaimers from Y2K problems. It is legally convenient to do so, which has nothing to do with the debate at hand. The FFIEC, FDIC nor the FRB require any such thing. Banks do it because in view of the serious, impending Y2K threat their lawyers insist on the disclaimers.

These disclaimers were NEVER EVER used in the banking industry before Y2K. Your money was always 100% insured by the FDIC, bla, bla.

Not any more, despite Flint. Oh, by the way, Flint is the acid test. If this is all that Flint has to say, please beware that there are no more nor no better counter-arguments against what you are reading in this thread.

-- George (jvilches@sminter.com.ar), July 25, 1999.

Regarding the markets and 401Ks etc. I was listening to Y2K News Radio I think it was Friday's show.. and if so it is still on there for your listening pleasure.

Some things were said that I thought important enough to copy down (this is from my notes and may not be word-for-word accurate):

Only the Gorss Domestic Product of the ENTIRE WORLD (at $25 Trillion) exceeds the U.S. Stock Market Capitalization at $13.5 Trillion.

At $13.5 Trillion, the U.S. Stock Market capitalization is 150% of the $8.8 Trillion U.S. Gross Domestic Product.

The ratio of market capitalization to GDP is NEARLY TWICE as high as it was in 1929... the previous all time high.

We are (i.e. the ratio is) light years away from the 70 year average of 50% and from the low of 33% seen in '74 and '82.

In the last 2 years stock market capitalization has increased over 5 Trillion dollars which equals 60% OF U.S. GDP.

The market value of AMAZON.COM is greater than that of Boeing (which has hard assets).

The market value of AOL is an equal trade with CITICORP.

The market capitalization of the 5 largest companies - Microsoft, G.E., Walmart, Intel, and IBM - equals $1.4 Trillion and is larger than the market value of the entire U.S. Corporate Bond market.

Former Fed Chairman Pual Volcker:

"The fate of the world economy is now TOTALLY DEPENDENT on the stock market, whose growth is dependent on about 50 stocks, half of which have never reported ANY EARNINGS." Paul Volcker, Fri. May 21, 1999

-- Linda (lwmb@psln.com), July 25, 1999.

Linda,

Never in the history of banking and finances have so many trusted so much to so few. The problem is that these 'so few' are a bunch of conceited, illiterate, unaccountable idiot savants that the "bottom line" system pushes to ever short-sighted, short-lived strategies that the 'so many' don't want or care to hear about (yet) as long as the 'so much' keeps coming in.

Take care

-- George (jvilches@sminter.com.ar), July 25, 1999.

I just verified that it was on Friday's Y2K News Radio show that I heard the stuff I posted above. If you want to hear it yourself, it starts at 15:00.0, and the discussion continues past a break.

Here's the direct link to the RealAudio file ... or use the link above and click on Today's show. It should remain "today's show" until sometime Monday.

By the way.. just a tidbit I found out about listening to those shows... unlike some other shows where you can fast forward to anyplace on the show, these shows seem to download in sequence. That's bad, but the good thing I have discovered is that once the show has ALMOST played to the end, if you pause (not stop) it, at that point it has downloaded the whole show and you can go back and listen to any part or all of it again...offline. If you go all the way to the very end though you have lost it. Don't understand it.. just use it.

-- Linda (lwmb@psln.com), July 25, 1999.

George,

I'm not bit**ing. I've prepared. It's foolish to say 'dont trust banks'. If you only have a few K, then it's no problem yanking it out of the bank. For the rest of us, moving money around typically COSTS ALOT and requires planning.

Personally I just got out of stocks and went for high quality, short-term bond funds. If my funds fail, it means that the US Govt has failed with the major banks. BS! If that happens then your CASH is useless. Gold and precious metals are useless (can't eat them) as well. That leaves food and barter goods. 'Already have them just in case I'm wrong about this being a 2 or a 3.

Like I said, cashing out my 401K would involve a 40% loss TODAY. It's much safer for me to keep my high quality bond funds that only pay 5% interest and use this as the vehicle to ride this thing out.

Show me a better way that doesen't involve my giving tens of thousands to the government.

-- Bryce (bryce@seanet.com), July 25, 1999.

Flint,

Are you taking your money out of the Bank or Not? Are you cashing your investments or Not?

Father

-- Thomas G. Hale (hale.tg@att.net), July 25, 1999.

Thomas:

I don't have any investments, nor any money in the bank. IF I can get out of (unsecured) debt by the end of the year, I may have a few hundred dollars left over. This won't be in the bank, of course. I think it's prudent for everyone to have at least this much cash on hand. If I had $50K in the bank, I'd pull out a couple thousand.

-- Flint (flintc@mindspring.com), July 25, 1999.

Thomas G. Hale, you have to learn the FLINT RULE: The more simple, direct the question asked, the more complex and indirect the answer will be. (And long. Always long. That, and the speed of light, are the only constants in an ever changing universe.

-- King of Spain (madrid@aol.com), July 25, 1999.

Flint: You have no money in the bank? How do you pay mortgage, bills etc? What are you, some kind of "cash only" seditionist? Don't trust the system?

-- a (a@a.a), July 25, 1999.

Bryce: I can easily see a situation where your bonds would be so much worthless paper. In that case, at least cash would be recognized for a while as means to expedite bartering. Gold, OTH, has always held value, especially in times of monetary turmoil.

If and when your bonds tank, gold will quadruple in value. For it to do otherwise would mean civilization had regressed to before the Dark Ages.

-- a (a@a.a), July 25, 1999.

KOS:

Simple, direct questions based on false assumptions can only generate misleading short answers.

Have you stopped beating your wife? Yes or No will do, thank you.

-- Flint (flintc@mindspring.com), July 25, 1999.

Fleet will clean you out.

-- $$ purge (splurge@now.or else), July 25, 1999.

My two cents worth ----- Get you cash out of you bank. What kind of cash. Well one hundred dollar bills might not do you very much good if this Y2K thing turns really bad. Ever try getting you pay check cashed and asking for only five dollar bills. Not easy. But always remember it is "Your Money". Even better go into your bank and buy a five hubdred dollar box of quarters. Thats right 2000 quarters. If you think money is going to be scarse, and due to that reason increase in value, you can never have enough quarters. It will also save you from make change. You can always say to however you exchanging your quarters with for goods " Thank God I had a few quarters laying around the house." Just think what kind of story you'd have to make up if tried to exchange a one hundred dollar bill for some goods, someone might follow you home to see if you had any more. Y2K could get real serious. That means we should be doing some real serious thinking on how we are going to get on the other side of it.

-- thinkIcan (thinkIcan@make.it), July 25, 1999.

Bryce- I understand your dilemma. the only money I have is my IRA- if i pull it out- I pay big taxes and penalties- I have it in a very secure money market fund- about as conservative as one can get- I figure- if it goes down- what will cash be worth anyway?? The money market is invested in US treasuries and stuff.......so- it's a risk I suppose but oh well.....if it goes- so did the US government and then who knows......

-- farmer (hillsidefarm@drbs.net), July 25, 1999.

Bystander: "Aside from that, Mrs. Lincoln, how did you like... [aaarrghkkk!]" Mrs. L. (aside): "Asked, and answered!"

Basically, we're being told here that despair (the 10+ scenario) is the only realistic option. Yet the myth of salvation through gold persists. Since gold has no intrinsic value -- a characteristic shared by currency -- it can only function as a medium of exchange within a society possessing some consensus as to the value of gold.

Under the 10+ scenario, sooner or later most people will find nothing they need available for purchase. Who would trade part of a limited supply of food for inedible, undrinkable gold?

I'll stick with hope. If nothing else, it's the only way to keep going.

-- Tom Carey (tomcarey@mindspring.com), July 25, 1999.

Hello a@a.a,

I respect your viewpoint, but I disagree. Gold is no longer used as protection against inflation by investors. You might have noticed that gold has steadily declined. It makes nice jewelry, but in a real emergency I think it would make a poor bartering good. It's bulky, expensive and doesen't meet basic needs. Fuel, Food or supplies like lamps, cigaretts, etc. seem to be a lot more practical if something really bad happens.

A lot of people I know have gotten burned by adding metals to their portfolio only to find that they can't even keep up with inflation. Gold is a dismal place to put money.

If US govt bonds fail, it really is armageddon. This has NEVER happened. It means the government can no longer tax citizens, it cant borrow and it can print money. How could this happen.. (really, think about it).

I'll have a lot more than my money to worry about if US govt bonds fail somehow.

-- Bryce (bryce@seanet.com), July 25, 1999.

Bryce: Here's the trend for gold, now at a 20 year low:

And here's the trend for the market, now somewhere between the ionosphere and pluto:

Now then. What does the phrase "Buy low, sell high" mean to you?

-- a (a@a.a), July 25, 1999.

a@a.a,

I Don't want to be a smart a**, but what does 'buy low, sell lower' mean to you!!?

Your chart proves my point!

Gold is a dismal place to put money. Silver is even worse because of the difference between buy/sell spreads (about 20%!!).

If you bought Gold today, there is NO reason that it will be worth more in the future. Demand is declining (obviously) and coutries like Great Britain and Russia are dumping millions of ounces.

-- Bryce (bryce@seanet.com), July 25, 1999.

Bryce: have you ever seen the graph of a cyclical function, like a sine wave? Looks like this:

     xx      xx      xx      xx
    x  x    x  x    x  x    x  x
x  x    x  x    x  x    x  x    x  x
 xx      xx      xx      xx      xx

Trends do not continue forever Bryce. Gold was a dismal place to have put money. The market was a great place to have put money.

And of course there is a reason gold will be worth more in the future. Look at the cyclical function. Do you think that economic cycles no longer cycle? If so, you would have been in good company back in 1929:

"Stock prices have reached what looks like a permanent high plateau... I expect to see the stock market a good deal higher than it is today within a few months" Irving Fisher, Professor of Economics, Yale University, Oct 15, 1929 "The markets generally are now in a healthy condition... values have a sound basis in the general prosperity of our country" Charles E. Mitchell, president of the National City Bank, October 15, 1929

-- a (a@a.a), July 25, 1999.

a@a.a

I think we have a basic diffence in opinion..

Yes, some things do go down 'forever', they fall out of favor indefinitely, they become marginalized. You CANNOT just plot a sine wave over things and assume that a given marketable commodity will behave that way.

Do you really want a long term investment that follows a sine wave? We are talking about a place to 'park' the bulk of your savings for Y2K right!? (not short term speculation).

By looking at your chart, and following Gold prices off and on since they were in the 900s it appears to me that Gold has fallen out of favor permanently among investors.

1. Can you name a time since gold hit the 900s (and fell) that gold has made a sudden upswing that was anywhere near as large in recent history?

2. If you look at the chart over the last ten years, would any long term investment have even kept up with inflation?

3. Have you observed that during market corrections, gold has risen?

4. If you actually own gold (instead of just push it) and you have had it for more than one year, were you happy with your return?

I believe the only answer you could give to all four is NO.

In short, if you have owned gold for any amount of time, you have lost your butt. Why do you believe this trend will not continue? The reason gold is so low is that NO ONE WANTS IT.

In any case, wouldn't you rather wait to buy gold until after the beginning of an upsurge? (not falling like a rock as it is now!!).

-- Bryce (bryce@seanet.com), July 26, 1999.

Bryce, no one "wants" gold because they're too occupied falling over themselves scarfing up more shares of amazon.com. And that's fine -- while it lasts. But the days of wine and roses are coming to end. Questions:

1: Who in the heck do you think is going to be patronizing amazon.com during a serious recession or 10 year depression?

2: If the stock market loses 40, 50, or 90% of its value (a figure alluded to by Yourdon), what do you think the price of gold will be?

3: If hyperinflation sets in, or even serious inflation, do you think gold will continue to fall?

4: Have you considered the possibility that markets are manipulated?

5: Did it occur to you that the move to sell the UK gold "to alleviate the suffering of the poor" seemed a little bit suspicious?

6: Where are you on the scale described in this poll:

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=0015U1

7: When TSHTF as 80% of the international banks sieze up after y2k (see CNN story on other thread), do you think gold will be in demand again?

-- a (a@a.a), July 26, 1999.

Bryce,

We are in a TOTALLY unprecedented and UNIQUE situation, you simply cannot look at history (say of gold since the 70's) and come to your (admittedly logical on the surface) conclusions.

When things start tanking all logic goes out the window - there will be an almighty scramble for safety - where will the big players put their moola? Where will the small fry like myself put it?

Gorbachev is reputed to have lost his life savings of $137,000 on the Russian banking fiasco (course he still has his swiss accounts :) ), do you think investors in Brazil and Russia and Thailand hadn't wished they had the bulk of their wealth in gold???????

There are infinite variables at work here - I'm trusting my gut instincts and knowledge of how I believe y2k will play out in the banking and global trade arena... that's all anyone can do.

I still predict that gold and silver will go BALLISTIC.

-- Andy (2000EOD@prodigy.net), July 26, 1999.

a@a.a,

First off, take this in a 'jovial interchange of ideas' spirit, as that is my intention. I can't predict the market, but I try to investigate the facts. I think many people are falling into knee-jerk reactions as far as gold is concerned mostly because they are scared. Gold is reasuring in that it is solid, but so is lead.

In answer to your questions..

1: Who in the heck do you think is going to be patronizing amazon.com during a serious recession or 10 year depression?

No one in that case, but I don't believe in the 10 year depression scenario. I think Y2K bugs will affect profitablility, and thus the market. I don't believe companies will be destroyed left and right though, they are more flexible than people assume. (I sold my AMZN ;-) ).

2: If the stock market loses 40, 50, or 90% of its value (a figure alluded to by Yourdon), what do you think the price of gold will be?

Certainly down. Investors (the real ones) may sell gold to cover options they have placed on stock. If the stock market tanks, people will not have the money it takes to buy gold, the stock market can tank before people get the chance.

There are other, more liquid places to park cash (like govt bonds).

After such a drought in gold prices, the first minor upswing in prices will cause investors that have been screwed with their gold holdings to suddenly come out of the woodwork keeping prices down.

3: If hyperinflation sets in, or even serious inflation, do you think gold will continue to fall?

No, but I don't believe this will happen.

4: Have you considered the possibility that markets are manipulated?

To what end? Why (and HOW) could any government dump gold at below market prices? They would lose billions before they affected the market much. Speculators that would take advantage of their loss instanly. What's the advantage of giving money away?

5: Did it occur to you that the move to sell the UK gold "to alleviate the suffering of the poor" seemed a little bit suspicious?

The reason they state is probably false. I think they realize that after holding it for decades that it was not doing them much good. Other major countries have moved off the gold standard.

6: Where are you on the scale described in this poll:

Recession. If the power grid stays up (assumption), then myself and a lot of IT guys will make bucks fixing the bugs slopily left in by our predicessors. I'm damn good at fixing things, so are a lot of other people. Fixing all this stuff might spur a short time economic boom ;-).

As I've said in other posts, I write IBM emulation software and we have tested our emulators, gateways and hosts for months. One of our mainframes has been running in the Year 2000 for months without issue. This has helped to form my opinion that problems will be limited to application bugs. These will be a BIG mess, but they are fixable. 7: When TSHTF as 80% of the international banks sieze up after y2k (see CNN story on other thread), do you think gold will be in demand again?

No, in your scanario, investors and individuals will not have the means to purchase it. They would not be able to sell their stocks at what they perceive is a fair value. So they wont liquify stocks to buy gold. Stocks stop their slide, gold doesn't rise, IMO.

Imagine how would you purchase gold if you had your money in stocks and the market took a 50% hit. Investors are CONDITIONED to buy and hold. Investors BELIEVE that the market will correct eventually, this becomes a self-fulfilling prophecy.

-- Bryce (bryce@seanet.com), July 26, 1999.

OK Bryce - you haven't answered my points...

check this out

http://www.gold-eagle.com/editorials_99/taylor071999.html

[LONG snip]

A. Well I'm talking purely from a technician's standpoint now. I believe that the orthodox top, if we use Elliott Wave analysis, was made in July 1998. Just as the orthodox top of the previous summer peak was made in 1928, not 1929. And the correction in October was the "A Wave" correction. The high which I believe was made in late May this year was the "B Wave high. I believe that was a high because at that point in time we have a key point reversal on both the Dow and S&P.

Q. O.K., for our non-technician readers, can you tell us what you mean by a "key point reversal"?

A. It is simply when a weekly bar makes a new high but closes below the close of the previous bar of the previous week. That is a very, very strong indication that the trend has been reversed.

Q. So your feeling is that this great bull market is over?

A. I feel that we have already come to the end of autumn and autumn is nearly always signaled by a stock market crash.

Q. So a stock market crash is what we have to look forward to here? Thanks a lot Ian!

A. Well, if we use the previous autumn - 1929 - even if we are to look at values say 1929 stock values vs. 1999, using things so simple as PE ratios, book values and so on, we see that we are excessively overvalued in 1999 compared to 1929. But using 1929 is a good example because it was the end of the previous autumn period. The Dow topped on September 3rd., about out six weeks before the crash started. By the middle of November 1929, stocks had fallen by 50%.

Q. Amazing! Stocks fell by 50% in just a few months. But didn't the Dow actually fall by something closer to 90% until this stock market debacle was all over?

A. Yes! The ultimate result by June-July 1932 was a decline of 90% from its September 1929 high.

Q. Amazing! But you hear most analysts talk today about corrections. They believe bear markets have been eliminated forever. We are only going to have corrections - you know - on the order of 10%, 15%, 20% and then we will inevitably move toward new highs. Investors these days cannot fathom even a 50% decline, never mind a 90% fall in prices. And you know if you go back over the century, the only time we have had a decline anything like a 90% fall was during the 1929- 1932 down period. How does the magnitude of the 1929 decline compare to these crashes that took place during the winter of the previous Kondratieff cycles?

A. The 1874 autumn decline was about a 40%. During the autumn season ending in 1819 stocks plunged 80%. So the autumn is really characterized by a significant loss in stocks values. But the one that is, in my mind, the most relevant to the current period is 1929.

Q. Why so?

A Because in 1874, the U.S. economy was built around the railroads. It was not yet an industrial economy. By 1929 we had a full-fledged stock market that was driven by an industrial economy. Another example I think is important to look at too is the Japanese autumn because the Japanese economy is also fully industrialized. The Japanese market peak was on December 28, 1989, but in its initial decline, it lost 50% of its value.

Q. Right. What did it ultimately lose?

A. Well, it hasn't finished losing but since its December 28, 1989 peak it declined from 39,000 to 12,000 so that's nearly a 70% decline. But in my view the Nikkei has still not yet bottomed.

Q. You must be kidding! All the media discussion I have seen and heard is certain the Nikkei can't go lower and that in fact, with its most recent advance is on the mend.

A. I think that when the U.S. stock market declines the Nikkei will suffer further decimation. I think you can use the Nikkei as a close approximation for the New York market in 1929 because the Nikkei topped at just under 39000. NY topped at just under 390 in 1929. NY dropped to 41. So if we are going to see a similar decline, we can see the Nikkei at about 4100.

Q. Sounds like a thrill! Of the three Kondratieff cycles, 1929 was the worst wasn't it?

A. Right.

Q. Well, this is kind of scary stuff for a lot of people. Readers of this letter are perhaps not so shocked because this newsletter serves to provide hedging advice for the small investor. They are comfortable and prepared to face the day when stocks suffer a devastating decline. But most of the world of course looks at these predictions as "off the wall" just as they did in 1929. But if the masses refuse to learn from history, I suppose there isn't much we can do. What are the implications for gold then? If stocks are destined to suffer through a devastating decline, what do you see for gold?

A. Well, the winter period of the long wave season is the deflationary depression segment of the cycle. The whole purpose of that period is to clean up the debt. And so during that period, the value of commodities themselves, drops dramatically as demand drops. But I think that gold on the other hand comes into the fore, fulfilling its traditional role as money. This is because during the winter period, enormous pressure is placed on the world banking system. A good example of this is Japan, which is now well advanced into its winter season. When you get this intense pressure in the banking system, there is a huge flight out of paper money.

Q. Right - So are the Japanese buying lots of gold now?

A. Well, they are beginning to, but don't forget, they are still sending a lot of capital into the U.S. market. And it is only when the U.S. market declines that those capital flows reverse back to Japan. Once the U.S. stock market drops it will lead to a drop in the U.S. Dollar and there will be no safe haven currency. The Japanese Yen is still a leading currency, but the Japanese have tremendous problems. The Japanese are going to issue 90% of the world's debt this year, so the yen is going to remain suspect. The Euro certainly has displayed its problems, and I believe its promise will never even come to fruition by 2002 as it is scheduled to do.

Q. Can you run that by me again? You said the Japanese will issue 90% of all debt in 1999. Why are they doing this? To monetize their debt? To try to print their way out of trouble? Is that it?

A. When the U.S. stock market gives up, the U.S. dollar will become suspect, especially since the U.S. is now the world's largest debtor nation - unlike the last cycle when the U.S. was the largest creditor nation.

Q. So what's going to happen then? Will there be a flight to gold because investors will have lost confidence in paper money?

A. Well, that's what happened during the 1930's. While the Dow was losing 90% of its value during the 1929 to 1932 time frame, Homestake Mining for example rose in value by 300% without any corresponding rise in the price of gold, which was fixed at $20.67/oz.

Q. Right you are Ian! Our readers know all about that. As you know, I actually received daily stock price data from Homestake dating all the way back to 1888. From that I provided the results of a statistical study I carried out in which I allocated 15% of an hypothetical portfolio to Homestake Mining shares and 85% to the Dow Jones Industrial Average. I assumed that at the end of each year, investors would begin the year with 15% allocated to Homestake and 85% to the DJIA. What we found was that this gold exposure not only virtually eliminated the huge 90% decline suffered in the DJIA, but that the portfolio containing Homestake performed significantly better than the straight DJIAportfolio. In fact, as late as December 1998, the portfolio containing Homestake was still worth 25% more than the one without Homestake despite the fact that gold has been in a 19-year bear market. So you are definitely preaching to the choir on this issue. Actually, Roosevelt revalued gold from $20.67/oz. to $35 oz. Do you remember when that took place? Not that you were around at that time, but

A. Very funny! The year was 1933. I was born about 9 years later. Investors knew they could take their paper dollars to a bank and receive an ounce of gold in exchange. Therefore, the dollar was as good as gold. A vast majority of Americans chose to take gold rather than paper because so many U.S. banks were closing their doors. So Roosevelt confiscated the private ownership of gold and at the same time he revalued gold to $35 per ounce which is where it stood until 1971 when Nixon defaulted on this obligation.

Today, with the dollar having no backing by gold, the demand could be enormous. In fact when you look at the public purchases for gold now, it is already up 1,400 times since 1996.

Q. So that's the off-take of gold coins in North America, right?

A. Right. And in the first quarter of l999, North American demand for gold coins rose 141% to 32 tons! So Americans, and to a lesser extent Canadians, are already starting to accumulate gold.

Q. And that coincides with the autumn or winter seasons?

A. Yes, with the onset of the winter cycle and that is why I believe the world's central banks are doing anything and everything they can to keep down the price of gold. They want people to believe that fiat paper is more valuable than gold itself.

Q. I think you might be right about that. While you are talking about this enormous demand in gold, the media and government are acting as though no one except a few radicals want or should want to invest in gold. What we do hear is that "gold has lost its luster" or that it no longer serves as an effective insurance policy against all kinds of political and economic chaos. We hear all kinds of stories about governments and central bank gold sales, most of which are spoken of but never take place. So your belief is that this is an orchestrated effort to keep people believing and hence remaining in paper money rather than gold?

A. Right. And I mean so it was - it has always been that way. Whenever governments have introduced a fiat system, governments have always tried to convince people that paper is more valuable than gold.

Q. And of course, all those paper systems have ultimately failed throughout history. Right?

A. Yes, they have.

Q. Well, there has been an enormous amount of money and credit created during the summer and fall seasons in the current 60-year cycle. So that leads me to ask you what price gold might ultimately rise to, if and when governments are no longer able to fool the populace into thinking paper money is better than gold? Or does that question make any sense?

A. - It's very difficult to come up with a price. However, James Dale Davidson and Lord William Rees-Moog in their book, "The Great Reckoning," wrote that the price of gold in the deflation period - and they traced this back through five periods in history - rose an average of 8% in real terms over the inflationary peak in the gold price. If that's to happen this time - I mean - we are taking the average - but if that is to happen, then we are looking at something over $2,000 per ounce.

If you look at a chart that first brought me to your attention. This was the chart that you showed in your newsletter displaying the price of gold divided by the Dow Jones Industrial Average. That chart now shows the disparity between the price of gold and the DJIA.

Q. That's right. When gold reached $850/oz. in January 1980, and the Dow was under 1,000, we had essentially a 1:1. Now the relationship is around 40:1! So the very high price of gold in 1980 co-incided with the end of the summer season in the current cycle, is that correct?

A. Yes because gold is a commodity as well as money and in 1980, when the summer season ended, we had an inflationary blow off. During such a time, people look to secure their wealth by purchasing tangible items because they realize fiat currency is not all it is advertised by politicians and bankers to be. Following the 1929 crash, the gold/DJIA was a 2:1 relationship. But only because the price of gold was fixed. We know that demand for gold was enormous, but if it were floating as it is now, I'm convinced we would have seen at least a 1:1 relationship. So based on this historical activity, we have to try to envision where the Dow will be and where gold will be if we get back to a 1:1

Q. Well Ian you know that I am of a like mind and agree with most if not all of what you say. I have, since the 1970's always believed that gold provides a portfolio insurance policy. Accordingly, I believe prudent investing requires you to allocate a portion of your portfolio to gold. I'm telling my subscribes to have at least 10% of their portfolios allocated to gold shares and 2% in gold and silver bullion. What is your advice now with respect to allocations of stocks, bonds and gold?

A. Because I believe we are on the cusp of winter in North America, I do not think that stock investments make sense at this very critical juncture of the long wave cycle. Long bonds may act as a temporary haven in any severe stock market decline, but I stress that would only be temporary. During the onset of winter in the long wave, gold and cash have performed very well. Cash because the value of everything falls precipitously and gold because winter creates severe problems within the banking system and the world financial system as well.

When the winter season gets under way, capital will dry up dramatically. In the current Japanese winter, that country will repatriate their long-term holdings, and probably are already doing so and the Chinese will do the same. What you will see is U.S. interest rates rising as foreigners take some or most of their $1 trillion of U.S. debt home. The U.S. dependence on foreign nations should not be forgotten. Without foreigners supplying $1 trillion of the $5.6 trillion U.S. debt, interest rtes would be much higher than they are now. When our winter arrives, we will see much higher interest rates.

Q. So you are suggesting that we could have plunging commodity prices and rising interest rates at the same time?

A. Well, we had that in the 1930's. It's interesting. The U.S. was not a debtor nation, so there were no long government bonds then, but AAA corporate debt rates rose in 1933 to a level where they were higher than at the inflation peak of 1920, even though the U.S. was in the Great Depression!

Q. Wow! People were just scared they were not going to get their money back, even from Dow Jones blue chip companies right? So the default risk was perceived to be very high. Investors had the spit scared out of them, right?

A. Right. Bear in mind that the U.S. will have only two options open to it when the winter season begins. It can either raise rates to attract money or start the printing presses rolling to accommodate credit needs.

Q. But of course if rates rise to any substantial level it will further devastate economic activity.

A. Right. So they will almost certainly monetize the debt by printing money, just as Japan is now doing. That will spell disaster for the dollar and it will also provide an extremely bullish picture for gold.

Q. Yes, and the thing that concerns me however, is the possibility that when we have that kind of economic chaos, what the government may do is choose to make ownership of gold illegal as it has done in the past under Roosevelt. Uncle Sam may in fact make house to house searches for gold.

A. I think they may very well do that again. But that in part is why owing gold shares makes a lot of sense. For instance, if you own gold shares you own gold in the ground owned by the company. So a lot of people buy gold shares in lieu of gold.

A Well, if everyone buys gold shares, who is going to buy the gold? I guess internationally there will be demand for gold no doubt and there will be people who buy gold underground. Some will keep the yellow metal off shore aware from the tyranny of Uncle Sam or hide it in their vaults, right?

A. Yes, and what I also believe you will see is a shift in national ownership of gold so that the Chinese for example who currently hold $145 billion in foreign currency reserves but only 3% of that is in gold will be buyers. On two occasions that I am aware of, Chinese officials have come out publicly in favor of increasing their gold ownership to approximately the same levels as Germany and France. That would mean something like 35% to 40% or $40 or $50 billion worth of gold transfers to the central bank of China. And don't forget, the Japanese, who do not hold much in the way of gold as a reserve currency. So I think what you are going to see is the economic power shift from North America to Asia at the start of the next Kondratieff cycle, just as we saw the power shift from England to the U.S. at the start of the current cycle that began in 1949. There has already been some evidence of that. In 1989, the Japanese stock market was bigger than New York's and 10 of the largest banks in the world were all Japanese. And that was the same kind of evidence of the U.S. overtaking Britain as the number one economic power at the start of the current cycle.

Q. Of course, you realize that most people believe your views (and mine) are a little off the wall. What do you have to say to such critics?

A. All I am trying to do is to take a look at an economic cycle and provide an investment framework within that cycle. Bear in mind that the Kondratief cycle holds considerable credibility for people who care to look seriously at it. No less an economic genius than Joseph Shumpeter, the famed Harvard professor, has identified the Kondratieff Wave as "the single most important tool in economic forecasting." Shumpeter has done the definitive studies of long term economic cycles and the interrelationship of long and short cycles. Yet few people seem to care now.

Q. Why do you think it is so difficult for people to recognize these cycles? You lay it out so clearly in your newsletter and of course other people like Shumpater have spoken about it. Why is the long cycle disregarded by so many people, when it appears to be so clearly intact today?

A. I think that most people are caught up in the moment. In other words, they are caught up in the frenzy of the stock market. And there is always a feeling when this sort of thing is going on, that is when a bull market is well advanced, that this is a perpetual event - that we are experiencing a new paradigm as people like Larry Kudlow are fond of saying. But as Allan Greenspan has said, he has lived through many times when new eras were supposed to take place only to recognize at quite a great cost that the laws of nature had not changed. Consider Japan for example. I have been to Japan and I have spoken to the Japanese about their experience. They remember the Nikkei at 39,000 and the value of real estate in Japan when it was rising to astronomical levels. They remember that the value of the Emperor's palace in Tokyo was worth more than the whole state of California. At that time, the Japanese had a feeling that nothing could ever bring them down. But you go there now and you can see the effects of the winter in Japan. Real estate values are probably 1/10 the value they were in 1989. The bankruptcies associated with real estate speculation are enormous and their banking system is now in incredible trouble.

Q. Well, this certainly was a sobering experience for the Japanese as it was for the U.S. in our last winter season - the 1930's. I guess your recommendation is to buy a lot of gold and stay liquid, right?

A. Well, the two things in the winter period of the cycle that seems to make a lot of sense as they did in the last cycle are cash and gold. And each period of the cycle has a different investment cycle. It just so happens that at this time of the cycle, gold and cash are the best investments. Gold isn't a good investment in the spring and as we have seen, it is a horrible investment in the autumn whereas stocks and bonds are a fantastic investment during autumn.

Q. So what we have to look forward to now is buying gold in order to preserve our capital so that we can live to see the next spring, or the beginning of the next 60 year cycle. I'm 52 years old and I know you have made at least a couple more trips around the sun than I have. So I presume neither you nor I will be around to witness the end of the next cycle, right?

A. Jay, we don't know that. Science is so good these days that perhaps they may be able to keep us going for a long time.

Q. O.K., maybe we will live forever. Perhaps there will be a new paradigm with respect to life and death, even if there is not a new paradigm in the economy. But, seriously, if we can preserve our wealth by moving into cash and gold, we will be in a very strong position to buy stocks when no one else wants them, at the springtime birth of the next cycle, when fear of the stock market runs supreme. Of course, this philosophy is very much in keeping with the philosophy of people like Bernard Baruch, who suggested that he wanted to buy stocks when no one else wanted them and to sell them when the shoeshine boy and elevator operators were doing nothing but talking about them. Let me tell you Ian, I don't have a shoeshine boy. I shine my own shoes. And we don't have elevator boys any longer in New York because elevators run by themselves now. But I can tell you that my next door neighbor, Ralph the electrician, .stops by my office two or three times a day to check his high tech stock portfolio. All he can talk about is the stock market. He is even considering giving up his day job to become a day trader. Never before - not even in 1929 have so many Americans watched the stock market as closely as they do now. I take this as another sign that the autumn season is well advanced. Do you agree?

A. I absolutely do.

[I warned you ;) ]

OK in lieu of the above factor in a 1930's depression-type y2k scenario, where the banks stay up (just) and the markets close for a while before tentatively reopening (just)...

-- Andy (2000EOD@prodigy.net), July 26, 1999.

Hello Andy,

Totally IMO. 'Getting good at disclaimers ;-)

The big players will not buy gold physically, or shares of the same. It's way too easy for them to park money in several hundred instruments that are gaurenteed to hold their value.

I think the smart small guys will do the same. When I want to 'park' money, I get on a web form and park it in a fund. I DON'T whip out my credit card, and have hundreds of ounces shipped to me. I DON'T purchase gold that is secured somewhere else.. It's just too hard. Times have changed, investors have MANY options gold is just one of them.

Asian countries could have held US Govt based funds. They not only would not have crashed, but they would have made some interest.

Yeah, I agree Andy. You have to do what YOUR gut says. I've already looked at gold and came up with different results. I feel safer in high grade bond funds.

Good luck to you

-- Bryce (bryce@seanet.com), July 26, 1999.

Brycd and all worrying about 401K withdrawal penalties. Boo-hoo. You play the government's game, you get put between a rock and hard place. Yuppie sheeple.

look at http://goodbiz.com/tbks/

If you don't think Y2K will be a big problem, do nothing. If you think it will be, then cash it out. Q.E.D.

-- A (A@AisA.com), July 26, 1999.

A@Ais,

I'm not worried. I looked at this analytically. From my research on gold and other instruments, gold sucks.

Why give 40% plus to the government tomorrow to buy something that has NO gaurentee of value in the future?

Who is going to be crying if gold just keeps declining as it has for years. My money is safe. The govt will tax, print money, issue debt or all of the above to insure the liquidity of bonds. If the govt fails to do this, what good is your gold. Are you going to chop it into little pieces to buy bread with it? It's a poor barter good.

What will the govt do to protect your gold value from it's constant decline.. NOTHING.

If you wan't something solid, buy some real estate or something useful.

-- Bryce (bryce@seanet.com), July 26, 1999.

Bryce, after arguing this point til I'm blue in the face, I'm beginning to think you may be an idiot. No one is saying gold is a smart "investment". They're saying it's a compact, absolute and time proven means of holding wealth through a crisis period. You are getting matters confused. We are not talking about speculative investing to get rich here, we're talking about getting ready for the worst financial meltdown ever experienced.

If you see no problems ahead, why not just keep your money in the market? It will recover in no time right?

-- a (a@a.a), July 26, 1999.