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Tocqueville''s Hathaway examines dollar''s vulnerability

Section: Daily Dispatches

8:45p EDT Friday, September 29, 2000

Dear Friend of GATA and Gold:

Here's a very astute post this afternoon at the
discussion board of by a good
friend of GATA whose Internet pen name is Farfel.

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

* * *

Post by Farfel at
Friday, September 29, 2000

Today's action in the Nasdaq must be viewed with a
raised eyebrow. It is most extraordinary to think that
on a critical quot;window dressing dayquot; like today, on a
day BEFORE the historically ominous month of October,
the funds allowed the averages to slip as dramatically
as they did.

In terms of the Apple announcement, let us face facts:
The missed estimates were NOT really such a big deal. I
mean, on the scale of bad news, I would rate the Apple
disclosure as almost inconsquential relative to what
truly constitutes bad news in this world.

But in a bear market, ALL bad news is exaggerated and
ALL bad news drives the market, while good news is
esesntially ignored. So one must conclude that tech is
in a fast-developing bear mode, since the Apple
disclosure, although disappointing, hardly even fits
the category of bad news.

Conversely, in a bull market, the good news gets the
attention while the bad news is ignored. In the gold
market, that is becoming more and more the case.

Announcements that historically shattered gold
companies (dropping them 25-30 percent in one day) are
now no longer treated with much drama, no matter how
hard the anti-gold establishment works to create fear.
We seem to have arrived at a point where certain
bearish announcements in the gold-mining sector are not
regarded with great horror (for example, Third World
nations selling gold; analyst downgrades; gold mine

Instead there seems to be a new spin developing, one
characteristic of a market undergoing quiet

So, for example, when we learn of Uruguay selling gold,
the new savvy perception is that First World nations
striving to keep the gold price suppressed are forced
quot;to scrape the bottom of the barrelquot; and find any small
country that can be bamboozled/intimidated into gold
sales or leases.

So, for example, when we learn that some analyst at
J.P. Morgan downgrades a gold stock, we are not
particularly concerned, since we know that Morgan's
credibility is falling given that its tech stock
recommendations have been very far off the mark. But
even more notably, we know about Morgan's enormous
short derivatives position in the gold market, utilized
to suppress the gold price after the Washington
Agreement. So, again, savvy investors know full well
the blatant conflict of interest among the major
analysts, and naturally scoff at their gold-mining
company downgrades, which are issued either for the
purposes of accumulation or gold market suppression.

So, for example, when we learn of gold mine closures,
we know that such techniques have been used
historically within the mining sector to knock down
stock prices solely for the purposes of accumulation by
savvy big investors. Moreover, savvy goldbugs know that
reduced mine supply can only create much added pressure
for the gold shorts to find sufficient supply to meet
the annual global gold demand, now far exceeding global
mining supply.

When the gold price suppression scheme collapses, as it
must eventually, the explosion in gold price will more
than cover a gold mining company's reduced output from
the shutdown of high-cost mines -- provided, of course,
that such a gold company is largely unhedged with
respect to its remaining production.