This post is placed in it's proper place,...
DoubleD,
This is a post that I copied from the Crystallex thread on Raging Bull (made by a well read poster) for your reading enjoyment...
LETTER OF THE WEEK
Financial Insights, Box 793-Z, Oakhurst, NJ 07755; (908) 695-9595; $135 a year.
Mr. Richard Appel, editor of this advisory, examines the rise in gold prices and asks
whether this is the dawn of a new bull market or a bull trap.
'An announcement emanating from the annual, autumn meeting of the IMF was
the spark that ignited the sharpest rise in the gold price in nearly two decades.
'They stated they would sell a limited amount of gold for the next several years.
Further, they agreed not to increase the quantity of gold that they would lease
beyond that which was already outstanding.
'I have been following the actions of the IMF for over 30 years. During the decade
of the 1970s, they interrupted the ongoing great Gold Bull Market of that era. There
were at least two occasions when this coincided with their fall meetings.
'The fact that the IMF made public their new agreement must have been
calculated with the intent of strengthening the gold price. But why?
'The past several years has witnessed intermittent sales of gold by a number of
central banks. In virtually every instance their statements, or those threatening
future sales, occurred during periods of strength in gold....
'This appears beyond coincidence as each occurrence acted to terminate the
ongoing rally...and ultimately led to lower price levels....'
Adding fuel to the fire, says Mr. Appel, is that several non-IMF central banks
jointly announced they would begin gold lease programs.
'The primary effect of gold leases is to increase the amount of gold sold in the
marketplace. This creates an overbalance of supply which subsequently leads to
lower prices.
'Had gold's violent upward move occurred without the IMF announcement, I would
have unequivocally stated that a new bull market had begun. However, given the fact
that it was likely a sham perpetrated by the central bankers, I hesitate.
'Time will tell if the central bankers are setting up a situation to once again
smash the gold bulls. Remember, if they desire they can change their position on
gold in an instant.'
Food for thought??? |
