Rarebird, our discussion about GATA has been one sided lately,
so please review the following information I have received about GATA,
as for sure you will need this to make correct decisions about the
near furture price of gold. Thanks. Doug AK
[Bill Murphy, Chairman Gold Anti-Trust Action Committee Inc.(GATA)]
Hello everyone, Bill Murphy here.
March 7, 2000
Fundamentals
The "There Is No Inflation" lives on - at least that slogan did until
the Proctor and Gamble announcement this morning. Meanwhile, the CRB
closed today at 215.61 up 1.12, a new high for the move.
The CNBC talking heads and many in the financial community seem taken
aback by the continuing run up in the price of oil. GATA was not, as we
have been articulating this scenario for some time now.
The Arabs must be chuckling with laughter behind the scenes at our
pathetic groveling. I would think they would be buying gold in a
substantial way in the near future and are probably delighted that
the West is throwing this valuable asset away at such ridiculously
low prices. They certainly will have the money to knock on gold's
door and it will be a great hedge for them when the over valued
dollar takes a swan dive.
As a result of the falling Aussie dollar, Australian miner Delta Gold
sold forward 560,000 ounces of gold in February at an average price
of A$492. This brings their total hedging exposure over the next
10 years to 2 million ounces or some 49% of their mineable reserves.
Let us mark down Delta Gold and revisit them when gold is $500 bid
and see how they are faring and what is the disposition of their
shareholders towards management at that time.
Gold stocks are suffering the same fate as other value plays.
Nobody wants them.
The public wants high tech and money is flying out of the hands
of portfolio mangers that want to buy the gold shares.
But that which goes up will someday fall down, and as nature needs
things to be in balance the force of the high tech lead balloon
hitting the ground will crash into the bounds holding the price
of gold to snap and propel upwards gold as if it's weight is that
of a feather in a hot as in HEAT upwards air raising to the sky.
And yes, some day what goes up will come down as the ever present
battle between good verses evil continues, but then it will be the
responsibility of the next generation as GATA II will call forth
new and young and full of energy troops to do as their forebears
done in the past.
Imagine, a William Murphy VIII walking the talk...The sky is falling!...
As I have to prepare for my speaking engagement on Friday at the Alaskan
Miners Association Convention in Fairbanks, Alaska, I wrote up "the sky
is falling" part of this commentary last night. Today, the sky fell in
for Proctor and Gamble as that stock opened up some 30 points lower
after they presented Wall Street with an earnings warning.
Good old reliable Proctor and Gamble. Now, if that tried and true
company can open over 30% lower (overnite) on an earnings warning,
what could the share price of a company do on an opening that has
no earnings at all.
Yikes. The day is coming when an Amazon.bomb type internet company
opens 80% lower, not 30%, on bad news and that will set off a Nasdaq panic.
The momentum players will most likely all want to get out of their obscenely
overpriced tech stocks all at once - and there just may be NO BIDS!!!
Meanwhile, "the sky certainly is falling" for many shareholder owners
of corporations that require rising earnings in the future for their
share prices to advance.
That is what GATA has been saying for some time when it comes
to the stock market. And that is what started to happen to many
of the mainstream stocks. Of course, the Nasdaq crowd would call
us "Chicken Little" as that index continues to set new records
and has almost doubled now in the past 5 months.
I'am just waiting for a mainstream press to report the following:
gata nuts - "Taste Like Chicken"
Most everyone in the markets has their own thoughts on such "crowings",
but for me it is now, or right around the corner, that
THE SKY IS FALLING OR WILL FALL!!!
and what falls will not "Taste Like Chicken".
Those of us that have experienced market collapses knows how greed
can turn into fear overnight. Many of the money managers today have
no concept of REAL MARKET FEAR or The GET ME OUT trade.
When it does we will start hearing about gold
- just buy it will be the cry of the investor!
I have long felt that the price of gold might explode due to a banking
panic of sorts in which loans were called in or curtailed in all sectors
of the economy. Because the gold loans are outrageously large at 10,000
tonnes or more and mine supply of gold this year will only be around
2550 tonnes, it could cause chaos when the bullion banks try and get
their gold back.
This will happen, just a matter of time and leaves me calling out
"the sky will fall" to the gold shorts.
This is what long time mega bear London gold analyst, Ted Arnold, had to
say last October 11 with gold trading at a mere $324 per ounce.
"Central banks are selling gold in order to prevent a further sharp rise
in prices from causing a major financial crisis?.
"Central banks, according to our sources, have acted swiftly to prevent
a repeat of an LTCM-type of crisis by making sure that gold prices remain
in a tight range. Enough selling is done by agents of the monetary
authorities involved to cap gold.
"Central bank regulation of the bullion market always seems very far
fetched to most observers, but it is a cheap option compared with the
potential cost of bailing out banks and generally injecting liquidity
into an economy if there were a full-blown crisis, he said." End
Risky debt 'may cause trouble for US banks' -Financial Times
By Daniel Bogler and Gary Silverman
"US companies and consumers have built up record levels of risky debt
that could threaten bank's financial health if the economy slows,
warns McKinsey the financial consultant.
Wolfgang Hammes, a senior manager in McKinsey's banking practice, said;
"There is a substantial amount of hidden credit risk at US financial
institutions that could potentially lead to serious loan losses.
Most banks' risk management systems are not sufficient to identify
and quantify these risks."
Mr. Hammes, who has been examining debt levels in recent months,
points out that, in spite of a nine-year economic boom, US consumers
and companies are more indebted than ever. The borrowings of the average
US household now exceed a year's disposable income, according to Federal
Reserve figures.
The consultancy is even more concerned at the rapid growth of riskier
types of credit on bank balance sheets. End
I suggest to you that there are reasons that many bullion operations,
such as that of JP Morgan, are downsizing. They have to know the size of
the gold loans and that they cannot be covered in a short period of time
if need be during a crisis.
Just today I received word that the liquidity in the over the counter
gold market (where most of the action occurs) is already down to 50%
of what it was 2 and three years ago. The retreat by many of the bullion
dealers is starting to take its toll in many regards. When the gold
buying panic kicks in, there just won't be enough gold to go around and
satisfy the buyers. We have a "SKY SCRAPER" gold move coming.
When that day comes, "Chicken Little" will look like a guru while the
gold shorts try and explain their way out of gross miscalculations.
From Jonathon Rosenthal's business column in South Africa:
Safe as Fort Knox' called into question
"The United States government's gold stockpile at Fort Knox was safely
tucked away with all of the 147,3 million ounces in the cavernous vaults
accounted for, the US treasury said recently.
"But a footnote to the treasury's report implied that no one had actually
gone down to the vaults to check.
"The questions over whether the US gold stockpile was safe and sound began
with a letter from James Turk, a prominent gold market commentator, to the
Treasury asking when the last proper audit of the gold stock in Fort Knox
had been done.
"Turk said he believed the last audit had taken place under the Eisenhower
administration in the 1950s."End
Some closing thoughts. The precious metals rarely rally sharply on the
day of news that we all would construe as bullish. Today's blip with oil
over $34 per barrel is a good example. That is because of its recent
action over the past decade and because of the manipulation. However,
it should rally when investing institutions gather after a market day
like this one and decide either to buy gold or cover shorts. That is why
I am expecting a significant delayed reaction to this recent sharp move up
in the oil price.
Portfolio managers know why P&G went tankola this morning.
No statistical games.
Just facts coming to light.
The Proctor and Gamble earnings warning is not to be taken lightly.
As I understand it, they came out with this warning due to climbing
commodity prices that are used to make their products - thus, profit
margins will be squeezed. If that is the case for them, it has to be
the case for many corporations. There surely is inflation in the real
world and DENIAL of that reality will not cut it any more.
North to Alaska!
Heading out early Thursday morning. I have that old Johnny Horton tune
popping up in my head all the time now.
"WAY UP NORTH" - just what the price of gold is going to do!
As a result of the news of the "routine" investigation into the Bank
of England gold sale, I thought I should give you some idea of what
GATA is up to.
First, congratulations to the GATA's operatives in England that have
been so instrumental in shaking things up over there and waking up the
English press and British government. Something was rotten in the State
of Denmark; something is rotten in the English Treasury.
*Chris Powell will be meeting in Connecticut with the Staff Director
for Senator Lieberman very soon. Chris sent me the following today after
speaking with another Senator Lieberman staffer, "He said he understood
that the Treasury was dealing with MANY requests for answers along these
lines that were prompted by "your organization." But he had no sense of
why the Treasury was so slow to respond."
This means that the Treasury is dealing with many requests for answers
from Senators and Congressman as a result of the GATA army out there.
My schedule:
*North on Thursday to the Alaskan Miners Association - hopefully to
round up support in that mining conscious state and to make some
connections to meet with the state's politicos in Washington.
*Late March - off to New York to speak at the Spring Dinner Meeting of
Committee on Research and Education - to spread the word and meet some
New York press.
*Mid April off to Washington with Chris Powell to meet with various
leaders of the Republican Party such as Phil Gramm, Chairman of the
Senate Banking Committee, Denny Hastert, Speaker of the House,
Tom DeLay, House Majority Whip and Dick Armey, House Majority Leader.
Other Congressman are being contacted. We may not meet with all of them,
but GATA supporters are lining things up. Sincere interest has been
expressed to meet with an entire GATA delegation. We will ask that there
be a Congressional investigation into the gold market and will lay out
an exact agenda of what they need to do to: just find out THE TRUTH.
*Also in mid April - off to Las Vegas to meet with Senator Bryan,
Democrat from Nevada. Senator Bryan has expressed interest in hearing
what we have to say and his staff called another GATA supporter today
in Nevada who has been working diligently to set this meeting up.
*June - off to Paris to the Financial Times Gold Conference - to tell
our tale to all the high and mighty there that have an open mind.
Alaska, Connecticut, New York, Washington, Las Vegas, Paris
- why not Iceland, Mongolia, Inner Mongolia and Outer Space.
GATA is an army not so differently composed as that of Spartacus.
If Spartacus had the internet in his day, his revolt might have succeeded.
Like ours will.
Our adversaries might laugh and tell us we will end up like Spartacus
and that our Don Quixote like "tilting at windmills" is sheer fantasy
that will not win the day.
My retort to them is: THIS IS A BRAND NEW DAY.
That is what they keep telling us anyway, is that not so?
As the Star Trek man with the funny ears did not say,
"Long Live The Enveloping Horn."
All the best,
Bill Murphy,
Chairman Gold Anti-Trust Action Committee Inc.(GATA)
gata.org
[End. Bill Murphy talks about GATA activity.] |
