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Gold/Mining/Energy : Barrick Gold (ABX)
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To: goldsheet who wrote (2120)9/26/2000 8:53:25 AM
From: nickel61  Read Replies (1) of 3558
 
I agree with your opinion of Newmont and you have the possibiity that someday the vice grip on the spot price will be broken and Newmont will be the stock of choice for the institutions to play the turn since it is one of the few large non-hedgers left.

The question is can the creation of unlimited gold supply through paper trades continue longer than the ability of Newmont and the other non-hedged miners to survive. I have my doubts. It is easy to see how the bullion bankers control the spot price. The bullion bank or whoever can sell almost unlimited amounts of gold futures sure in the belief that as long as the game is controlled he will never have to deliver while those that go long do actually have to come up with the actual cash money. Add to this the fact that since the bullion banks and their partners have sold a massive amount of borrowed gold short over the last five years the movement downward that their unlimited selling tends to produce is making them billions on their gold carry trades where they are paying the 1% lease rate and their primary exposure is to replace the borrowed gold they sold earlier at the then current spot price, with leverage this is amazingly profitable. A great rip off and for them like shooting fish in a barrel if the market manipulation they can achieve through the ability of their "derivatives" to create unlimited new tonnes of paper gold that can swamp any real market demand. Nice game. It will destroy the gold industry but it will make a lot of investors richer than Croesus.
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