U.S. Treasury is now a hostage of gold

Section:

11:50p EST Monday, January 31, 2000

Dear Friend of GATA and Gold:

If you look closely here you can find some favorable
publicity for gold, or at least a gold mining company,
in this mainstream financial commentary.

Please post this as seems useful.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

By Thom Calandra
www.CBSMarketWatch.com
January 31, 2000

SAN FRANCISCO (CBS.MW) -- Alan Snyder is a money
manager better known for his stakes in old-style gold,
real estate, and transportation companies than in
online stocks.

So when Snyder, who believes in small gold stock Golden
Star Resources (GSR), mentioned his latest interest --
real-estate investment trusts that could benefit from a
California technology boom -- I listened.

"We have a lot of money that we're putting into real
estate investment trusts," said Snyder, a value-
oriented manager who handles about $2 billion for
pension funds, trusts, and other investors. "They have
gotten beaten up for two years, and some have solid
dividends."

Real estate investment trusts are required to pay the
bulk of their income as dividends to investors. Some of
them in the United States, because of the threat of
rising interest rates, yield 10 percent a year or more.

One of Snyder's favorites is tiny Mission West
Properties (MSW), which leases and acquires commercial
properties primarily in Silicon Valley. Mission West
manages 80 properties covering 5.31 million square feet
and lately, has taken to advertising itself with this
proclamation: "We build the buildings for high tech
companies that build the Internet."

Snyder says the competition for research facilities in
California's Silicon Valley is rising.

"Mission West is the dominant player in the valley for
the tilt-up research centers and office buildings that
you see in the valley," he said. "Landlords are not
only jacking up the rents, but they are getting stock
options in return for leasing agreements."

Snyder says he believes that extra income that Mission
West has been reporting -- like a $400,000 distribution
-- might have come "from selling some options in start-
ups that went public." Snyder says "we are not sure if
it is true, but it seems to make sense."

I put a call into Mission West's investment relations
office in Cupertino, Calif., and was awaiting a call at
our online press time. Mission West shares yield about
7.8 percent. The company recently bought a one-story
building that is 100 percent leased by network
equipment supplier Cisco Systems (CSCO). Mission West
stated the purchase price was about $7.2 million, or
$92 per rentable square foot.

Executive search firms recently have been accepting
stock options and warrants in lieu of cash for their
services, so why not real estate companies in a hot
real estate market? That's Snyder's thinking.

Another Snyder favorite is RFS Hotel Investors (RFS).
"A third of their hotel properties are in the San
Francisco area," says Snyder. The company's hotel
occupancies have benefited from a flow of executives to
the region, where Internet start-ups are part of the
fabric of San Francisco's commercial culture. The stock
yields about 12 percent.

RFS reported that income available to common
shareholders increased 2.8 percent to $33.6 million in
1999.

Oh, that gold thing again

As for gold, Snyder views tiny Golden Star "as a
perpetual option." Gold prices have languished of late,
and some large gold mining companies' shares are
selling at 15-year lows. He says if the price of an
ounce of gold moves to $325 an ounce from about $288
currently, Golden Star's $1 stock would triple. "At
$400 an ounce, it's a thousand percent gain in the
stock," says Snyder.

The question, of course, is whether investors will ever
again care enough about the precious metal to send its
price past $300 an ounce. Platinum and palladium prices
are hitting new highs, thanks to supply problems in
Russia. Alas, gold of late has barely budged.

Snyder has managed money via his Snyder Capital
Management for 15 years. One relatively safe, non-
Internet or gold investment is Mid-America Apartment
Communities (MAA), another real estate investment
trust. "This is a very cheap stock," he says. "They own
primarily apartments in second-tier cities in the
Southeastern United States."

The Tennessee-based company's stock could benefit as
the U.S. economy continues to grow steadily --
especially if interest rates keep creeping higher. The
Federal Reserve's Federal Open Market Committee will
meet in Washington this week to discuss the nation's
short-term interest rates in light of strong economic
growth.

"As mortgage rates have moved up, people are staying
put, because they are less likely to want to buy
homes," Snyder says. "That's good for companies that
rent apartments."

Snyder says "these are all REITs that have been around
a long time." Mid-America's dividend yield is about 10
percent.