Greg, hello and I bet you are presently mystified as why I am repling
to you post that has an example about hedging using ABX (Barrick).
The nice lady Bobby, Morel_Dog, recommended that I start asking others
questions, and with a hint between the lines, start off with easy ones.
I thought and decided that 20/20 hindsight is always helpful, along
with a "...knowing what I know now...if I could do it over...", so
to make it double easy for you I copied below a post of your that has
proclamations and predictions, posted 2 1/2 months ago.
Not sure, but I think enough has happened that you may change or add
to some of what you wrote.
The main reason I choose your post was that you politely stated that
the GATA investigation might not be able to produce any hard evidence
to support what they claim as forces illegally controlling gold prices.
At this point in time GATA has not done so, infact they have added to
the amount of stuff that they claim as existing to make the case that
everything they have presented is true. One can even see them presenting
information that cannot be verified, "to verify" past things that have
not yet been verified.
For a follow thru of this examination of GATA I now please ask you to
rewrite your post of 75 days ago, unless you stand firm on it all.
Also, please read the next post I submit to you, and I recommend that
you read it after you read your prior post, and before you reply since
in my next post is today's news from GATA via the Le Metropole Cafe,
and it has a LOT of stuff that is really strong in the possibily or
could be or might be, and all of it is without verification. I think
maybe this Cafe's peson has over stepped in an attempt to rally the
troops with too much gusto. ok for a football team, but that really
only a game and its ok to put on a game face and try and unglue the
other side. Just read it and o my o my o my, if true to be it is.
thanks, doug
From: Greg Ford Thursday, May 13 1999
...misguided in assuming that J Aron (Goldman Sachs) is short gold
or that there is a large short position relating to LTCM...
There has been no concrete evidence to support these conclusions.
As far as LTCM, all I have seen is misleading statements that they
were short gold. Nothing has been clarified regarding this.
If they were short gold some central bank would be quite concerned
and we would have seen an increase in lease rates as the banks sought
to recover their gold. This has not happened.
The problem with this market is clearly one of sentiment.
The low gold price has created an environment where producers are
hedging at lower and lower levels.
Unhedged or underhedged producers could be as much of a problem to
the gold market as central banks.
Companies like Battle Mountain, Kinross, Newmont and Homestake have
little or no hedge books. They will become under increasing pressure
to hedge if the price continues to stay low.
Hedgers such as Barrick and Placer have not shown any inclination to
wind down their hedge books. In fact they are more active then ever.
So how does gold crawl back above $290? I think we need to continue
to see improved financial conditions in Asia and perhaps a weakening
of the US dollar. This with a little inflation from the recent base
metal and energy rally should help support gold. But don't think that
we have seen the end of central bank sales. IMF and Swiss sales seem
relatively certain although their timing is in doubt. Don't be surprised
if we see some Latin American sales as well.
Greg
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