Subj: From Midas - I Smell A Rat !!!!!!!!!!
Date: 6/25/99 9:23:04 PM Central Daylight Time
From: lepatron@lemetropolecafe.com
To: midasnh@AOL.COM
Le Metropole members,
I smell a rat!
The bond market cannot rally for diddly. 114 07 basis
Sep futures has stopped several feeble rallies. Bond
yields have soared to 6.15% - unthinkable by all just
6 months ago.
We have had a hush hush meeting of leading world banking
officials in Philadelphia a couple of weeks ago and strong
indications of massive redemptions at hedge fund biggies,
Tiger and Soros. There were the rumors and a denial of
an emergency Fed meeting all over the wire services
followed by a stunning $20 billion intervention
implemented to hold back the yen ( the old yen carry
trade problem surfacing again ).
And the last two days the word is that two more
hedge funds are in trouble; Ross Capital and
Monroe Trout are the names that have surfaced. Monroe
Trout was heavy sellers of German Bunds the past
two days as that market has been hit very hard.
It would appear that the de-leveraging process that
David Tice and Charles Peabody have been telling
you about in the Cafe for some time is exactly
what is going on here.
Then today, the gold market was trading quietly when it dropped
a quick $2 just as THE BOND MARKET was breaking after a
failed rally. What happened? The XAU was steady as a rock.
Well, I found it was a customer of Goldman Sachs that just
happened to sell 50,000 oz. at the right time which set off
stops.
Not the time and place to get into the whole program yet, but
it feels more and more like part of that Goldman Sachs
1,000 tonne short position, that our sources tell us has been
uncovered on the books, might be part of a Fed trading account.
Goldman Sachs was a featured seller almost every day after
the BOE auction. You are aware of that because we reported
that info to you. Soon, we will lay out our comprehensive
thesis of what we think is going on here. But, before you
new Café members think I am a bit daft, here is article
354 from the Federal Reserve System book ( we will tell
you soon, but you might want to look and see who is
behind the Federal Reserve. Most people have no clue -
I know because until recently I had no clue either ):
*354 "Transactions involving gold coin, bullion, and certificates"
"Every Federal reserve bank shall have the power to
deal in gold coins and bullion at home or abroad,
to make loans thereon,exchange Federal reserve notes
for gold, gold coin, or gold certificates, and to
contract for loans of gold coin or bullion, giving
therefor, when necessary, acceptable security,
including the hypothecation of United States bonds
or other securities which Federal reserve banks
are authorized to hold."
So the Fed has the right to trade the gold market.
Perhaps this makes the picture a bit more clear about
the BOE sale and Goldman Sachs. The Fed knew about
Long Term Capital Management way before it blew up.
After all, LTCM had the Central Bank of Italy as
investors as well as former Fed officials. That is
probably why Alan Greenspan made his "
central banks stand ready to lease gold in increasing
quantities should the price rise" statement before two
Congressional subcommittees on July 24 and July 30 of
last year. He knew what lay on the horizon. After all
he prides himself on that. His smoke signal statement
was a clear one to the bullion boys. You can check the
record, but gold cratered before LTCM blew up and after
his statement.
It is now clear that problems were surfacing behind
the scenes again a couple of months ago ( remember
Peabody's unintended consequences as a result of the
LTCM bailout and the 3 interest rate cuts ). Greenspan
could not go to the same well again. So just as the
price of gold is taking off this time and gold share
prices are having their greatest surge in 6 years
all over the world, our officialdom calls up the
English Poodles to make their ridiculous gold sale
announcement ( May 7 )- the first pre announcement
like that in over 20 years. And then
Alan Greenspan has the gall to tell the Joint Economic
Committee in Congress the English did so as to not
take advantage of the private market place. Thus by
definition, he inferred that the central banks that have
sold gold for the past 20 years and announced
their sale weeks after it was completed all "took
advantage of the market place" and in a sense were amoral.
We do think a big gold price rise is coming going into
the auction, but the Fed's nervousness over the bond
and stock markets may be a mitigating factor.
Regardless, we are doing our due diligence to find
out the truth about who is manipulating the gold
market and why they are doing so.
Café members know that Long Term Capital Management
sent us a letter and an affidavit and letter denying
trading any gold. We are in the process of cordially
responding to them and will ask for some SPECIFIC
clarifications.
In the meantime and interestingly, we were bombed
today by Café members that sent us this comment
from The Gartman Letter - Friday, June 25, 1999.
It is a renowned letter and read all over the world:
"Precious metals are firmer helped, of course, by
rising interest rates but helped even more by reports
that the major Wall Street firm long associated
with a large short position in gold (Goldman Sachs...
having apparently inherited that position from LTCM
last year) may be in fact "the bid" to the BOE's offer
when the latter auctions a goodly portion of its
gold reserves next month. The BOE's auction has
pressured the gold market and reports of this
firm's intention to take all of the first 25 tonnes
of gold, when it becomes more publicly understood,
stands to push gold prices rather sharply higher.
Goldman, according to our sources, has proven to be
a formidible bid to the futures all week, making the
rumours all the more readily understandable."
This is very strange. Many weeks ago Mr. Gartman
"condemned GATA in his Gartman letter for
conducting our investigation. Later he spoke
of the 1,000 tonnes short position rumor that we
have told you of, and did so acknowledging he
was reporting what the market talk was even
though Goldman Sachs is a several client
subscriber to his newsletter.
So what gives? Where did he get his information
about Goldman Sachs inheriting an LTCM gold position?
That is what we said, yet we get abuse for saying
the same thing he does.
Even though he condemns us, we thank Mr. Gartman
for pointing out to the world what our inquiry
about LTCM was all about in the first place.
One thing I promise you. The Cafe will be jumping this
summer.
Le Metropole Cafe
All the best,
Bill Murphy
Le Patron
|
