...$21 dollar oil, 6.11% long bonds in the U.S., certain credit spreads,
(signifying liquidity problems) at decade highs, and $30 billion worth
of intervention fails to halt a yen surge. Had most market analysts been
given those facts at the beginning of the year, I don't think a one
would have predicted the 11,000 Dow we had a few days ago and the $256
gold we have today. You would have had predictions of a 7,000 Dow and
$400 gold...
...Commercial banks have a central bank to bail them out of this type
of liquidity squeeze, but there is no lender of last resort to bullion
banks, so gold interest rates rise as a result. The bullion banks must
borrow to fund their gold loans, no matter what the cost...
There is a good reason why the central banks may be withdrawing deposits
from the bullion banks. Perhaps the central banks see the increased risk
in the bullion banks, and are therefore pulling out their gold from the
bullion banks for safety reasons. I'm sure the central banks remember
how the central bank of Portugal lost 17 tonnes of gold that it had on
loan to Drexel Burnham when that firm went under...
... a "hypothetical" of what just may have happened
and why "what may have occurred" is going to contribute
to an astonishing rise in the price of gold.
Say a large, macro hedge fund ( not Soros ) had invested heavily in
securities in third world countries and in other illiquid securities.
Then say, it was hit with massive redemptions in the billions from its
partners. Now what if that firm's capital base was 4 to 7 times greater
than Long Term Capital Management? If the hedge fund had to liquidate
positions, both "the hypothetical hedge fund" and the entities that they
have invested in would suffer terribly. And, who knows, maybe this would
set off a "systemic risk" chain re-action which is what the Fed feared
if Long Term Capital Management went down for the count and why the N.Y.
Fed organized a bailout in that case.
The "hypothetical" hedge fund knows it has a big liquidity problem so it
informs the Fed of its precarious financial condition. The Fed, knowing
how fragile the leveraged financial system is at the moment, arranges
another bailout, but The Fed cannot do it the same way as they did for
Long Term Capital Management ( for fear of a backlash by free market
proponents and for fear of having to reveal how they would accomplish
this new bailout ), so they call their "ace in the hole", The Bank of
Greenland. After all, an official of the Bank of Greenland stated the
decision had been made for some time and they were waiting for something
to implement that decision. The N.Y. Fed ( again ) then notifies its
cronies, "The Goon Squad", led by Golden Locks of what is coming and
notifies them that it will be safe to arrange a massive gold loan for
the "hypothetical hedge fund" for the time being because they have made
sure the price of gold will be going down for months to come.
Of course, all this will be kept hush hush. It has to be kept hush hush
because the implications of this - once known to the world, would prove
that the gold market is being manipulated and reveal who is involved in
this outrage. The dirty deed is then arranged - dirty, to all of us that
believe in fair play and free markets. Thus, the bullion dealers
arranged to lend theis "hypothetical" hedge fund billions of dollars via
gold loans ( perhaps 10 to 15 million ounces ). The gold is sold into
the market, depressing the price of gold further after the BOG
announcement. That tremendous supply shock attracts more supply and
begins feeding on itself, eventually knocking the gold price down
sharply. This helps out the nervous bullion dealers, solves the problem
in the short term for the hedge fund, an eventually panics some central
banks and producers into panic sales.
For sure, it is public knowledge that Golden Locks was selling gold
just about every day after the BOG announcement. Maybe for this
"hypothetical" hedge fund. Yet, the bullion dealers feed the press with
stories of CB and producer selling to cover up the fact that it is
really this "hypothetical hedge fund", among other nefarious types,
doing the selling. We have already alluded to the N.Y. Fed selling gold
right after the BOG announcement. Perhaps it was this "hypothetical"
hedge fund doing so with the N.Y Fed's bailout blessing and orchestration.
...brag about their winnings and then beg for help when they are about
to go into the toilet and lose badly. Remember, this "hypo", hedge fund
somehow managed to borrow gold right around the recent high price high
as it was ready to take out $290 and put the gold borrowing positions of
many financial institutions in jeopardy ... could possibly not believe...
..., the well known astrologer, market technician, just told
his followers that the worst stock market crash this century is
underway. He has an outstanding reputation for making calls...
..., we think he may just be right.
... Fox Guarding the Chicken Coop. This is the same William McDonough
who arranged the LTCM bailout, hushed up the LTCM gold loan situation,
and sits all over the gold market ( if we are correct ) with a trading
account at Goldman Sachs, run by number two N.Y. Fed Man, Peter Fisher.
... day is coming and as the calling in of the gold loans gains momentum,
... $400 gold might be much closer than you could every imagine.
Midas du Metropole
Internal Revenue Service has recognized Gold Anti-Trust Action Committee Inc.
as a publicly supported organization exempt from federal income tax
Financial contributions to GATA are tax-deductible to past and future donors.
... GATA artist, Alain Despert, is the latest arrival on the Dallas art
scene as he opened his "Arts District Gallery" in elegant Fairmont Hotel.
It is only steps away from the Dallas Museum of Art and is the showcase
gallery for his colorful and contemporary paintings. Alain, a native of
France who is widely know for his Absolut vodka painting, has just moved
to Dallas to set up his permanent base in the United States.
In 1997 an image of Alain Despert's "Sante Fe" series was selected for the
Fine Art Collection of "Best Buddies", non-profit organization founded by
Anthony Kennedy Shriver to enhances lives of people with mental retardation.
Alain Despert's art is also featured at the Cafe, www.lemetropolecafe.com
Bill Murphy
Le Patron
lemetropolecafe.com
mail to lepatron@lemetropolecafe.com with questions or comments
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