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Gold/Mining/Energy : Gold Price Monitor

GDXJ 97.81

+0.9%

4:00 PM EST

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To: Zeev Hed who wrote (63917)	2/18/2001 11:54:59 AM
From: russwinter	Read Replies (1) of 116762

<CB's will get back to Washington and change the Agreement> to cap a rally. Zeev, I would suggest the complete opposite CB reaction, a buying panic. In part this is because as much as a third of the world monetary reserve has already been leased out at absurd interest rates (currently 1.17% on six months)to bullion dealers (banks). Further there is evidence of a schism among different CB's. The larger non-English speaking CB's (including present nominal holders of gold reserves like Japan and China) are more than just a little shaky in their belief and confidence in the flood of dollar based paper liabilities afloat in the world. Their problems are too many dollars and too much liability based paper, not too much gold. If anything, they should want to rebook leased gold (listed as gold paper RECEIVABLES) as actual physical gold. There is a huge difference between the two. Leased gold is someone else's liability, and the meaning of that is and will become all too evident. Finally a general point about CB gold policy in the last decade. They are the greatest fools of the financial mania and now bursting bubble. They have systematically divested their gold through outright sales and lending in order to increase their holdings of dollars and other paper currencies. Nouveau central bankers have parroted the values and beliefs of the now failing paper asset bull market. Their supposed prescience is one of the unfathomable myths of our times (right up there with the Tooth Fairy, Santa Claus, Goldilocks, and Easy Allan Greenspan aka The Wizard of Oz). Rather than capping a rally, look for some (if not many) of them to change their minds and turn into panic buyers (or effectively call their gold loans) when paper currencies fall out of bed.

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