Lordy lordy GATA, what are we getting into? Armstrong, organized crime...
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Chris Powell received a letter today from Martin Armstrong.
... the government seized some of the tape recordings he had made
describing market manipulations. He asked Chris to get a transcript.....
... to unravel the organized crime ring that is controlling the markets.
Chris has contacted GATA's attorney.....
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The James Joyce Table
Discussion du Jour: Gold, Commodities, Midas du Metropole
Midas du Metropole
"The Gold Market and Precious Metals Commentary"
February 11, 2000
MIDAS TIME
"Hannibal Cannibal," Morgan Stanley, came right out of the box today
before the Comex opening and slammed the gold market with selling.
Gold bent, but did not break as a $5 down day is not much after that
$32 surge of the last 6 trading sessions.
The reason given and spread around the trading floor for the price weakness
was that gold destined for India from Dubai was being shipped back to the
U.S. to be sold here. The bullion dealers have such big problems with their
short positions that they will come up with anything to try and pressure
the market. Not to say that some gold from Dubai won't hit the U.S. gold
market, it just won't be enough to do any serious damage.
The Caf‚'s John Brimelow understands the Indian gold market as well as anyone.
He tells me that a "reflux" action from Dubai back to here is normal when
there is spike up in the gold price. Dealers in Dubai purchase gold here
in the U.S. to sell to the Indian consumer. When the gold price soars as it
just did, the Indian consumer backs off for a bit, so the dealer sells the
gold back to where he got it and then books a big trading profit. The Indians
usually come back in after a number of days with more orders as their own
inventory runs down, so the Dubai dealer has to buy gold again.
The gold chart looks terrific and today's lower gold chart was a good one
according to the technicians we spoke to this afternoon.
I am still looking for a dramatic price explosion at some point.
There will probably be a trigger and that trigger could be the unraveling
of the Ashanti mess.
After gold closed today, there were ra-a-tat-tat of Dow Jones wire service
releases. They are stunners in my book:
ACCRA, Ghana (Dow Jones) --Ashanti should scale down its gold hedging
position and buy up smaller gold companies to increase production,
Jean-Claude Gandur, a possible future leader of the company, told Dow Jones
Newswires on the sideline of a court case last month.
The comments, which couldn't be published while the trial was ongoing,
came as Gandur lead a group of Ashanti minority shareholders in a court
battle to hold an Extraordinary General Meeting. The plaintiffs, who hope
to replace certain company directors, won the right to hold an EGM within
the next 21 days.
Gandur is a likely candidate for leadership of Ashanti if a new board is
elected. A decision to scale back Ashanti's hedge book could mean lower
volumes of gold being sold forward on the world market and could even
mean a massive gold buy-back.
Gandur said the gold hedge book should be "drawn down" to ease the
company's cash flow. Such a move, he said, would pave the way for an
expansion of Ashanti's gold production through the acquisition of
smaller gold mining companies." End
This one from Dow Jones was right behind it:
2: Govt Also Wants to Cut Hedging
"A source familiar with the affair said the government,
which holds a 20% stake in Ashanti and a golden share,
also wishes to reduce Ashanti's hedging position.
He compared Ashanti's large hedging position to a Rolls Royce,
saying that Ashanti can only afford a Ford Escort. The hedge book
he said, needs to be brought down to a more manageable size."
Two hours later the following appeared in another Ashanti story
carried by Dow Jones:
"Meanwhile, Ashanti has filed for a stay of execution of the high court's
order restraining them from taking out further loans, said a source involved
in the legal negotiations.
"Ashanti has said it wishes to sign a $100 million loan from Barclays Bank.
During the court case, Ashanti had argued it needed the $100 million to
prevent it from becoming insolvent.
"Ashanti has now changed tack and is arguing that the loan is for further
development of the company's Geita gold mine in Tanzania, said the source.
On this basis, Ashanti hopes to gain permission from the judge to obtain
the loan, he said.
"Ashanti hopes gold production at Geita will start by June 30.
"The source said the lawyer for Shanti and the lawyer for the original
plaintiffs are to meet with the judge this coming Tuesday." End.
Are you confused yet?
This is one quagmire that comes at you like a bowl of spaghetti.
Allow me to do what I can with this.
Seventeen bullion banks, led by lead advisor "Hannibal Lecter" (Goldman
Sachs), influenced Ashanti to select exotic hedge programs in such a
degree, at such low price levels in recent years, that when the gold
market exploded late last September and in early October, their hedge
book blew up. Goldman and the other bullion dealers forgot to put an
explosive, fast moving gold move up possibility in their computer option
volatility models for the Ashanti executives. In other words, the
Ashanti management had no idea that the volatility on the calls they had
written could go so high, so fast and therefore cause the price of those
calls to skyrocket. The sky high calls caused massive margin call
exposure and big time dollar losses.
The surprise Washington Agreement surprised the gold market and effected
an $84 rise in the gold price in days. And Voila! Ashanti is in the toilet.
It is now 4 months later and the haggling over the devastated company
continues. According to the press release yesterday, the Ashanti hedge
book is down some $570 million, give or take. The present Ashanti
management is being challenged by insurgent shareholders that seem to
have the backing of the Ghanian government, so we know who wins this one,
and they want the hedge book reduced.
Meanwhile, the bullion banks that are exposed for all these losses are
sitting short 9 million ounces of gold on their books. As the price of
gold rises, the loss grows. A banker's nightmare.
There have not been any recent statements about what was going on because of
a gag order that was lifted today. And then, after the gold close in New York,
we find out that the government of Ghana wants the hedge book reduced.
That means gold buying hitting the market at some point. Positions will
be closed out and losses taken. Who pays for them?
There are many questions here. Does the Ghanian government want the gold
price to explode and then plan to walk away from the resulting bullion
dealer losses sitting on their books? Is that why this statement was
made tonight?
Will the shark hedge funds jump in here and load up on gold knowing the
vulnerability of the bullion dealer banks? Will they goose the gold
market like they always do when there is easy prey to be had? Especially
now that so many producers will not be selling into rallies?
Will this be the trigger that blows up the colluding gold shorts?
Will this be the event that causes a gold buying panic for those gold market
players sitting on 10,000 to 13,000 tonnes of gold shorts with no way to
get even a fraction of all that gold in a short period of time?
The set up is here for a big move. We will see. Will Secretary Summers
and the Exchange Stabilization Fund have to stabilize the gold market?
The Commitment of Traders report released after the close shows the
small and large specs have increased their positions significantly while
the trade have increased their shorts. The open interest is just less
than 160,000 contracts, which is a low number. It is a low number
because the producers are buying back their hedges. So, the specs and
producers are buying. Who is selling and how much have they had to sell
just to slow down the gold rally?
How long can the manipulation crowd hang on? That is the real question.
Regardless, I have said that the gold market could explode at any time
as this "goon squad" is overpowered. That is what I believe and there is
not much of a ceiling for the gold price when that occurs!
$600 gold is my target, in the next couple of years, maybe in the next
couple of months! Not such a big deal. March palladium traded that high
today and finished at $598.85, up $18.85.
Oil closed at $29 and 1/2 dollars, practically unchanged after trading
up to $30, down to $29, then up on the day, then down on the day, etc.
A wild affair. Market still looks like it wants to go much higher.
Gold analysts are turning bullish. The Merrill Lynch gold analyst in
Australia is looking for $350 plus gold. The head of research at BNP Ltd
in Australia is looking for $340 to $360 gold in 6 months and $400 in
one year. This is great to see, but where were these guys two weeks ago?
Better late than never.
Few of these analysts know how really explosive the gold situation is.
They don't know how big the loans are, for example, that could propel
a moonshot move up in gold to prices of which they cannot even conceive
- because they do not realize what has been really going on behind the
scenes in the gold market and they are also not working with the right
numbers. There is so much else like that which will be revealed as the
market moves up.
More to come for you on all of this over the weekend if all goes well.
Don't know how this relates to the bullion dealer in trouble story,
put out the other day, but I was told this afternoon that the United Bank
of Switzerland chief gold trader was just fired and that their option book
was a mess.
Chris Powell received a letter today from Martin Armstrong. He wrote that
the government seized some of the tape recordings he had made describing
market manipulations. He asked Chris to get a transcript of his appearance
in court Feb. 7, which would have been just a few days ago. He said the
transcript "may be of great interest to your members and your cause to
unravel the organized crime ring that is controlling the markets."
Chris has contacted GATA's attorney, Merrill Davidoff, to find out if they
are connected enough to get the transcript.
Lordy, lordy what are we getting into?
Midas
Bill Murphy ( Midas )
Chairman, Gold Anti Trust Action (GATA) gata.org
Le Patron, Le Metropole Cafe lemetropolecafe.com
The above mention of GATA is as follows.
Bill Murphy, Chairman, Gold Anti Trust Action (GATA) gata.org
Also, GATA related articles can be obtained at the pay for view site.
Bill Murphy, Le Patron, Le Metropole Cafe lemetropolecafe.com |
