Gold Ready For A Boom Led By Japan: Jipangu

By Jim Hawe
Dow Jones Newswires
June 13, 2001

TOKYO -- Tamisuke Matsufuji has developed a knack for
making outlandish predictions that have a way of coming
true.

The president of the gold mining and investment firm
Jipangu Inc. and author of numerous bestsellers on
contrarian investing, has forecast everything from the

collapse of Japanese real estate and stock prices to
the failure of Yamaichi Securities.

But recently his crystal ball has taken on a decidedly
golden hue. According to Matsufuji, 46, gold prices
are now sitting on a powder keg -- and he is expecting
Japan to light the fuse.

"The price of gold is ready to take off. It could go up
to Y3,000 or even Y4,000 (per gram) easy ... and
Japan could lead the way," Matsufuji recently said
in a recent interview with Dow Jones Newswires.

Matsufuji said the rally "could happen soon."

Gold at Y3,000/gram is roughly equivalent to $764
per troy ounce. Gold, which hit a high of $875 an
ounce in 1980, has long been languishing in the
doldrums.

April 2002 gold futures on the Tokyo Commodity
Exchange was trading Wednesday at Y1,054/gram
at 0615 GMT. Spot gold at 0615 GMT was at $272.10/oz.

The man the Economist magazine once described as
"rich and rude" admits that he is in the minority, as
gold's 21-year bear run has scared away most backers.

"But I see the Dow falling sharply, the dollar plummeting
to Y80 and bond prices crashing. Eventually, the only
safe alternatives will be gold and shares in gold mining
companies," said Matsufuji.

"That is why I founded Jipangu. It's a kind of 'insurance'
company." Jipangu was set up in 1995.

Preparing for the Coming Golden Age

Matsufuji was evasive when pressed for specifics to back
up his predictions, and prefers to fall back on historical
models.

"When U.S. stocks crashed in 1929, prices of gold and
shares in gold mining companies soared, and the same
thing is about to happen again," he said.

Matsufuji is so convinced of the coming gold boom that
he has been putting his money where his prognostication
is -- and in a very big way.

Through Jipangu, he has been snapping up major stakes
in mining companies around the globe. He already has a
24% stake in High River Gold Mines Ltd., a 22% stake in
Cambior Inc. and a 24% stake in Claimstaker Resources
Ltd., all three based in Canada, and he also has the option
to buy a significant stake in South African mining giant
Harmony Gold Co. Ltd.

Altogether Matsufuji has his hand in some 40 projects
around the world. Based on his own estimates, some 20
million ounces of gold, or 622 tons, are now under his
control. That is more than twice of Australia's 2000 output
of 295.7 tons of gold. Australia is the world's third biggest
gold producer.

Japanese Investors Seen As Key

"I want to give Japanese investors the opportunity to
invest in gold and gold mining companies around the
world without exposure to currency risks," said Matsufuji,
who sees Japanese investors as a key element in the
new golden age.

Japanese investors will use yen to invest in
yen-denominated shares of Jipangu, which would then
give them an indirect stake in the various mining
companies affiliated with Jipangu, he said.

If they were to buy stocks in these mining companies
directly, they would have to buy the shares on, for
example, Canadian equity markets using Canadian
dollars exposing them to currency risk, he added.
Through Jipangu their investment is kept in yen.

"Japan is the world's largest creditor nation. Individual
assets total more than 1,300 trillion yen. If just 1% of this
money could be moved into gold, that would instantly
account for five years worth of global production, and
gold prices would skyrocket," Matsufuji said.

"Japan has the potential to really move the market,"
said Matsufuji, who hopes Jipangu will serve as the
vehicle for pumping more Japanese money into the
gold market.

Matsufuji explained that the word "Jipangu" was first
bought to the West by Marco Polo as a term describing
Japan as an "island of gold".

"That is why I named my company Jipangu. I want
Japan to again be full of gold."

-END-