Alex, you make excellent points on this forum. Here is something else that has convinced me that the latest lean job on POG has little to do with fresh producer hedging or even CB selling or leasing. It's the LBMA (London Bullion Market Association)stats of late. These stats are the best weathervane on the actual physical availability of gold. It gives an excellent reading on how much gold liquidity there is in REALITY (as opposed to what the spinmeisters say).
lbma.org.uk
The evidence is stunning and clearly points (in conjunction with the huge spec shorts on the COT) that speculators, hedge funds, and no doubt their buddies the bullion banks are using extraordinary levels of short selling to depress gold prices. There has never been a better opportunity for a substantial big player to light a match, and blow these yahoos up.
Note the ounces transferred peaked at the time of the Washington Conference at 37.2 million (Sept-Oct. 99), and dropped during the melt up to 22.2 million (Jan, 00). Then when things started to get out of hand, the CB's probably leased liquidity into the market given that ounces transferred increased to 30.0 in Feb, 2000. There was no doubt a rash of producer hedging as well. A little liquidity was provided until June, 2000, and then it was withdrawn. It has been averaging a mere 20.0 or almost half the levels of pre- Wash. Agreement since. In Jan, 2001 gold liquidity was only 19.7 million oz., signaling an extreme (indeed a record low)acute lack of physical gold in the system. And the real reason gold is where it's at:
Message 15367795
As a result of the evidence, I believe CB's are honoring the Agreement and I believe the hedge books are beginning to shrink. And shrink they should given the rollover in production and the mark down of producer gold reserves. I also believe the CB's gave the dealers some breathing room to clean up their act after the WC meltup. Instead of doing so, they've engaged in the most egregious ramp job imaginable. The CB's should not use their nation's gold reserves to bail them out another time.
Now if anyone reading has $258,000 US dollars burning a hole in their pocket, take it down Monday to one of the following institutions: JP Morgan, Deutsche Bank, Chase Manhattan, or Goldman Sachs. Walk up to the counter, plop down your paper money, and ask them to bring you ten one hundred ounce bars of the f------- gold. Then let us know if they have any on hand, or do they have to send a Brink's truck out and borrow it somewhere?
If you don't have the dough, then e mail the CFO of every gold stock you hold that does any hedging, and ask them why they aren't actually buying back their forwards. While you're at it tell them to spend a little more time winning back alienated gold investors, and a little less time hobnobbing with bullion bankers. |
