Gold Fields acknowledges talks with Anglo, Barrick

Section:

By Linda Leatherdale
Toronto Sun
March 14, 2001

From all parts of the world they came.

Those legendary mining prospectors, who still believe
they'll strike it rich with gold and who still believe
that after a painfully long 21-year bear market, the
beaten-up mineral sector will shine again.

In the halls of the Metro Toronto Convention Centre
they gathered for the Prospectors and Developers
Mining Convention, which winds up at noon today.
But at this year's convention, the mood was different.
After years of being downtrodden in the investment
world -- especially after the Bre-X scandal gave the
industry a big black eye -- there was an unusually
upbeat, almost euphoric buzz in the air.

Stock markets were falling again, news of more
layoffs were making headlines, and central bankers
were panicking to put the brakes on an all-out
recession by slashing interest rates.

"Throughout history, when a crisis hit, people would
move their money to gold," said Ian Gordon, senior
investment adviser and vice-president of
Vancouver-based Canaccord Capital, who was in
town for the convention.

In other words, it's time for gold to shine again.

Yet Monday's troubles in the stock market, when the
Toronto Stock Exchange 300 crashed 205 points to
fall below 8,000 for the first time since December
1999 and the Nasdaq suffered yet another meltdown,
did little to bolster gold yesterday. In London, the
price of gold fell to US$268.50 an ounce, from
US$271.90 on Monday. In Hong Kong, it fell
US$3.50 to US$269.95 an ounce. That's a long shot
from gold's high flyin' days in the 1980s, when
the glittery stuff once fetched US$800 an ounce. In
fact, gold prices are still bouncing along the bottom,
close to their 20-year low of US$256.20 in
the summer of 1999.

So, why is Gordon so bullish?

Gordon, a consummate gold enthusiast, is the popular
author of an opinionated newsletter, called The Long
Wave Analyst, and it is in this newsletter where the
answer lies.

Gordon is a proponent of what's called Kondratieff
Cycle, which follows the research of Russian
economist Nicolai Kondratieff. His chart, which
tracks economic trends since 1789, when the
industrial revolution was born, is a remarkable but
scary indicator of what's to come -- if you believe in
it.

In short, Gordon is warning the volatility we're now
suffering in the stock markets is similar to the
volatility in the days leading up to the Great Crash of
1929. And what lies ahead, if his wave is correct, is a
nasty winter in the stock markets that could last until
2010.

"I think what we're going to see is panic like we
experienced in 1929, and what happened Monday in
the markets was not panic," said Gordon.

In other words, the real meltdown is yet to hit, he
predicts. And when it does, he warns it could be as
brutal as 1929, when the Dow Jones lost 90 percent of
its value by June 1932.

Buying into Gordon's Kondratieff Cycle are other
gold enthusiasts, like Taylor Hard Money Advisors
Inc., in New York City. Owner J. Taylor, in his
recent newsletter, says Gordon's predictions, so far,
are far more accurate than "celebrated analysts like
Abby Joseph Cohen and scores of other bull
market cheerleaders who pull down huge salaries with
Wall Street firms."

Taylor said these analysts were lining up to appear on
CNBC to tell the world how buying stock was a
guaranteed path to Easy Street, and how small
investors need not worry if they invested in the long
term.

Taylor, of course, recommends when the stock
markets hit the dismal days of winter, "you must own
gold."

But other analysts warn the days of gold are over. For
example, world currencies are no longer pegged to the
price of gold and many governments are depressing
the price of gold by unloading their gold reserves.
Also gone is the old adage "gold is a good hedge
against inflation," because in today's world there is no
or little inflation.

But Gordon advises gold is a good hedge against
deflation, and if he's right, the days of deflation are on
their way.

Also at the convention was Bill Murphy, who hails
from Dallas, Texas, and who's chairman of the Gold
Anti-Trust Action Committee.

Murphy's making headlines after launching a lawsuit
in December, which accuses powerful world players
of manipulating world gold prices. Named in his
lawsuit are some of the biggest bullion banks,
including Goldman Sachs and Chase Morgan, as well
as the Bank of International Settlements, the U.S.
Treasury, and Federal Reserve Board chairman Alan
Greenspan. "We believe they have breached
American anti-trust laws," says Murphy, who's
holding a GATA Africa Gold Summit on May 10.
Africa, he says, has been devastated by low
gold prices.