Market-fixing question raised in The Telegraph


10:30p EST Saturday, November 6, 1999

Dear Friend of GATA and Gold:

You may be interested in an interview with the financial
commentator James Dines with,
so I'm sending it to you below.

Gold Anti-Trust Action Committee Inc.

* * *


StockHouse: Do you have any targets on the price of
gold, for the rest of the year or early into next year?

James Dines: I don't usually work on targets. I prefer
trends, because we're long-term holders on it. I've
shepherded my subscribers into a basic portfolio of
Internets, with a 10 percent hedge in the precious
metals. We look at the precious metals like fire
insurance. Only an idiot would hope to make money on a
fire. Since every time you move, you lose about one-
third of your possessions, I figure three moves equals
one fire. We've had a clear upside breakout. We are now
in the breakout pullback. I am guessing that gold will
probably hang around the $300 area for a while. There
are two important aspects. The big news, on the short
term, is that there is a huge short position out there
that is trapped. Lots of them were forced out by margin
calls and have a cover, which pushed the price up. That
was part of the reason for the violence of the upside
breakout. You have not even a full unwinding of the
carry trade. There are a lot of these gold-mining
companies that have sold forward in the future's
market. So I think there is a latent pull of buying. I
think that gold will drift down, and all of a sudden,
it will have a wild upside rally for no reason. It will
probably be because someone is deciding to cover. So I
am not looking for a big crash, and I will be very
surprised if there is a big drop in gold prices.

StockHouse: And you feel there is still an upside for

James Dines: When you have mass fear, the kind of mass
fear that I laid out in my book, "Mass Psychology," I
think you are going to see prices of gold that simply
nobody would believe today. I think there will be a
stampede into gold and silver. There is an ongoing,
subtle, chronic currency crisis going on in the world.
I laid this out in my second book, "The Invisible
Crash." That was how I was able to predict the currency
crisis in Asia, two years before it happened. I am,
therefore, looking for additional currency crises.
Eventually, it will hit the U.S. dollar. When it does,
the world will change forever. At that point, when
people are afraid to hold dollars worldwide, I think
there will be a stampede of something else. I am
skeptical that it will be just another paper currency.
We turned bearish on the Euro at $1.17. It is $1.06
now, and I think that will eventually go much lower.
When I first recommended gold at $35, and I said it
would go over $400, people wanted to have me arrested.
I have learned my lesson, but I think that gold will go
far higher than anyone else in world believes.

StockHouse: There are some pretty wild predictions out
there about gold, and you think it will even beat

James Dines: Yes.

StockHouse: You named Pan-American Silver as your
second favorite. What is your favorite silver stock?

James Dines: Industrias Pinoles. It is the world's
largest silver producer.

StockHouse: Do you see the price of silver having a
good run up?

James Dines: Yes, I do. I don't know about this year,
because there are only eight weeks left. The situation
there is explosive. There is more being consumed than
being mined. Mining operations are closing down because
of the low prices. In 1960, I baptized silver as the
"poor man's gold." You can't have a major bull market
in gold without having silver being dragged up with it.
Silver is down from around $50 to around $6-$7. This
century, silver is now free. It is dirt cheap, and it
is still a precious metal. I feel that somewhere ahead
of us there is a tremendous bull market in this