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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: S. maltophilia who wrote (43112)	12/1/2000 7:56:17 PM
From: pater tenebrarum	Read Replies (1) of 436258

remind me again please... i have to hunt up the detailed information.i talked to Ted Butler about it who back then worked out that a truly big surge in silver prices (like i said, it would have to be a run to prices that are now considered whacky...something like $50-100 silver) would set them back by a staggering amount in the mark-to-market value of their hedge. Butler in case you're not acquainted with him is something of a silver expert...one of the 5 silver bulls left on the planet. generally i stay away from heavy hedgers...on the occasion of the Ashanti and Cambior debacles we saw that the metals are heavily overshorted...a hint that CB supply of gold may not be forthcoming resulted immediately in disorderly market conditions. i know that Anglo and Barrick have some leeway as they were among the first ones to play the game, and have big resources in the ground. but their gold hedges alone are together over 40% of annual worldwide production, and that's crazy. if the now unthinkable happens and we get a surprisingly swift move to much higher prices, they're going to be in trouble. i hear Barrick's gold calls are soon expiring... anyway, remind me on Monday about it, i'll see that i can give you the latest data. oh, btw. i have heard by way of rumor that EK has recently hedged its entire silver demand for the next 12 months and that Barrick is on the other side of that trade. if that's true, we're looking at a LOT more than a paltry 14m . oz... Butler estimates that worldwide, via leasing and derivatives, almost 2 billion oz. of silver are sold short...sure sounds like the recipe for disorderly market conditions and a price explosion to me, especially as the decade long structural deficit has led to worldwide physical inventories plunging to a 65-year low.

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