Barrick's cover is totally blown, the following article gives a fairly good synopsis of abx's complicity in clandestinely feeding cb gold into the market.
"Since the end of 1987, when the collaboration between Barrick and J.P. Morgan began, the growth of global income and wealth would have lifted the gold price to approximately $740 if the price had been able to respond to the normal laws of supply and demand," stated Blanchard's chief executive officer, Donald W.Doyle Jr. "If gold had kept pace with
inflation, the price today would be approximately $760."
The lawsuit claims that in the past five years Barrick and J.P. Morgan Chase injected millions of ounces of additional
gold into the market -- additions that were several times as great as the annual production of every gold mine in South
Africa, the largest gold producing nation in the world. By using privately negotiated derivative contracts and concealing the addition of billions of dollars worth of
(physical) gold with off-balance sheet accounting,Barrick was able to make it virtually impossible for gold analysts and investors to determine the size and the
market impact of its trading positions.
"The same type of accounting maze that hid Enron's debts made it possible for Barrick to manipulate the price of gold without the checks and balances that come from
public scrutiny. As a percentage of Barrick's total assets, its off-balance sheet assets make Enron look like a champion of full disclosure," said Doyle. "Is
Barrick a gold mining company, or is it a hedge fund with a mine out back?"
The suit alleges that J.P. Morgan Chase financed Barrick's repeated short selling with remarkably advantageous terms not available to others, including deferred repayments and no margin calls. Doyle said the short-sales scheme between the bank and Barrick
appears to be the proverbial "money for nothing"
Ken |
