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Gold/Mining/Energy : Barrick Gold (ABX)
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To: nickel61 who wrote (2985)5/21/2002 11:51:06 PM
From: russet  Read Replies (1) of 3558
 
The counter parties who don't exist are no requiring that Barrick no longer keep it's proceeds from it's short sales in a separate bond portfolio but rather leave them with the banks as "collateral" doesn't sound like they are not worried to me?
Your decision to ignore the fact that the 18 million ounces that they have hedged will take almost four full years of all Barrick's production to deliver into is silly. The other gold that Barrick might someday be able to produce will only be produced by Barrick if it is still a going concern, a situation that will be doubtful if gold recreates it's four fold increase in value as it did from 1970 through 1975. You seem to want to ignore that possibility. What would be it's losses reported for GAAP accounting should that occur? Have you calculated that in your rosey scenario? Long before we get to $1200/ounce gold we will all know that the wisdoom of selling 18,000,000 ounces short and hoping that treasury bond interest would make you whole is not a viable strategy in an industry which has it's commodity priced in a vulnerable currency and has been depressed in price at the end of a 22 year bear market. Silly strategies are selling your own product short and investing the proceeds in bonds and then claiming that you have somehow done more then fiddle with the accounting loopholes.

You have no proof fool. Barrick lives and you look stupid.
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