So Northgate gets none of its money, but is is invested by someone else just in case, and they pay for it at commercial rates, and it is totally unsecured, unlike all the other money out there. And to suggest it may be called by banks who are losing 400 million here and there is hooey. Sure. But LTCM got called, and that was not hooey and it perhaps seemed equally remote. And Ashanti got caught and would have gone under if they had not been a foreign company protected by their government.
So what paper is this German bank talking about that they get back from their Bullion lenders who cannot deliver on borrowed gold? (The gold that we are told, the German CB is going to "sell".) In fact they loaned it and cannot get it back, so it will be declared as a sale for reinvestment in paper. This paper is already placed as security on the loan so they do not have to go too far to get it. The story they tell the public is so they can keep their jobs.
I would not be too surprised that what is securing the loan of gold to Northgate is its shares. And a credit line is a loan, reinvested or not, a penny made on it or not.
If the bullion bank gets called, its affairs taken over, then its money out is callable too. A principle of chapter 11. Unless its unsecured, which I doubt.
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