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Gold/Mining/Energy : Gold Price Monitor

GDXJ 121.59

+2.2%

Dec 26 4:00 PM EST

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To: Terry Rose who wrote (5229)	1/4/1998 5:31:00 PM
From: Jaakko	Read Replies (3) of 116825

Found this on Kitco thread but have to respond here since I have no access to Kitco (someone who has, please forward to Kitco site): Date: Sun Jan 04 1998 15:30 OLD GOLD (Gold Loan defaults) ID#238295: VRONSKY: If Veneroso is correct that the CBs have lent 8000 tons of gold, that would amount to about $100 billion. If 10% of these defaulted we are talking about $10 billion, not hundreds of billions. Potentially a serious problem, but nothing on the scale of the savings and loan debacle. My response to VRONSKY: Bankers are bankers; and they make loans on a bank reserve system basis, e.g. they make $20 of loans for every $1 on deposit with them. Who is there to say that they don't lend out $20 in PAPER gold for every $1 in PHYSICAL gold that they hold in deposit?????? How can you otherwise reconcile 30 -40 million ounces of PAPER gold traded on the London market alone DAILY (times 250 trading days in a year makes the value traded in a year equal to $2 trillion) with the 8000 tons lent by CB's valued at $100 Billion or with the total above-ground PHYSICAL gold of 100,000 tons valued at roughly $1 trillion only. Is the total PHYSICAL gold traded MANY times over in a year in London alone???? Hardly!!! Ask the ladies in India how many times a year they trade in their jewelry !!! How much PAPER gold is traded in N.Y., Sydney and Hong Kong and Zurich??? You can clearly see that the PAPER gold is a MULTIPLE of the PHYSICAL gold and that the bankers did it again, i.e. lent something like $20 of PAPER gold out against every $1 of PHYSICAL GOLD on in their vault!!! Get this: 1) The POG is controlled primarily by the trading in derivatives/PAPER GOLD!!! 2) The POG control will remain until it is unravelled through taking of DELIVERY OF ACTUAL PHYSICAL GOLD and PUTTING IT IN PRIVATE INVESTOR VAULTS (NOT THE BANK VAULTS WHERE THE BANK CAN LEND OUT MORE PAPER GOLD AGAINST IT)!!! Jaakko

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