Speaking of GOLD!!
Gold thread..
USAGOLD on Argentina:
>>USAGOLD (10/19/98; 15:01:51MDT - Msg ID:663)
USAGOLD OPINION: Don't Cry for Argentina....
This afternoon Argentina announced a sale of its remaining gold,
according to a report by Bloomberg. There were no details though we
will likely hear more as the day goes on. Let me first of all say that
Argentina just recently received the plaudits of the International
Monetary Fund because it met the deficit guidlelines laid down by that
international organization with respect to its deficits. Meeting the IMF
criteria no doubt played a positive role in Argentina's successful bond
float today on Wall Street today handled by Goldman Sachs & Co. The
Argentine debt offering was the first major offering by an emerging
market since July and went out the door at nearly 11.5% annualized. It
was sold to a small group of institutional investors. If there was a gold
sale in advance of the bond issue, it appears, at least on the surface, that
the sale was attached to the bond offering and played a role in holding
down the deficit and make Argentina look like it had it house in order. I
have no way of knowing for sure that this is the case, let's just call it a
hunch. Argentina has (had) 360,000 ounces of gold according to IMF
figures recently released -- about $108 million at $300 per ounce. As late
as 1996 Argentina had 4.36 million ounces of gold, but sold most of that
off no doubt to pay down past debt requirements or reduce new
exposure. Argentina experience hyperinflation that ended through 1990
when their consumer price index hit 100,000. Since then Argentina
started out again at 100 for its consumer price index and it stood at 407
at 1997 year end according to IMF statistics. Since 1991, the Argentine
currency, if I am reading the IMF tables correctly, has attempted to hold
a peg against the U.S. dollar despite the horrendous inflation rate. In
other words, fellow goldmeisters, Argentina could be preparing for a
devaluation and all the foregoing is merely an attempt, futile as it appears
to be, to ward it off. So far, as I have said, we have seen no details. We
have said many times on these pages that strong countries do not sell
their gold, weak countries do. Prepare for an Argentine devaluation that
could send shudders through Latin America and the New York financial
institutions with loans there. Gold was down $4 today purportedly
because of the Argentine sale. That $4 will be small potatoes compared
to what will occur to the price of gold if and when an Argentine
devaluation is announced.<<
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