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To: Stephen O who wrote (38248)	8/3/1999 3:41:00 PM
From: Enigma	Respond to of 116764

Don't think so - perhaps you could provide an example of a company which does this - the CBs role is to provide gold by way of loan to cover the margin on the forward contract. In much the same way as you borrow stock when selling short - except the producer has the gold in the ground as his collateral - which he knows can be extracted at a profit as he has fixed the price of sale. Now you may be right, there may be some exceptions - but we should know if this is a guess or a fact - but surely companies getting into this game are getting into the realm of semi speculation? The company has sold its borrowed gold at say $255. If the price falls to $225 where does this leave the company - with a loss of $30/oz? This isn't hedging at all. I'm not talking about gold loans to hedge funds engaged in the gold carry trade - the gold is sold immediately into the spot market and the proceeds invested in treasuries.

To: Stephen O who wrote (38248)	8/3/1999 4:36:00 PM
From: Rarebird	Read Replies (2) \| Respond to of 116764

World Bank gets cut off by US Congress. I wonder what will happen with the IMF gold WASHINGTON, Aug 3 (Reuters) - The U.S. House of Representatives approved a bill on Tuesday that would cut overseas spending and slash funding for the World Bank, a measure the Clinton administration has vowed to veto. The $12.6 billion foreign operations bill, passed by a vote of 385-35, would decrease the World Bank's lending program for the world's poorest countries by $232 million and also cut off aid to foreign groups engaged in abortion-related services. The measure came up almost $2 billion short of the amount the Clinton administration requested. The Senate has already passed a version of the bill with less severe cuts. Rep. Nancy Pelosi, a California Democrat, scoffed at the abortion amendments as a red herring but said Democrats should approve the bill in the hope that later negotiations with the Senate and White House would produce a better funded bill with no abortion amendments. Republicans said the $12.6 billion foreign operations bill, which authorizes U.S. overseas funding for a range of programs from military aid to Israel to polio eradication, was less important to Americans than cutting taxes, fixing Social Security and Medicare or reducing the national debt. "President Clinton wants $2 billion more," Rep. Sonny Callahan, an Alabama Republican, told the House. "He's not going to get it. So yes, this bill is a vote to cut foreign aid." Callahan said he wanted to "preserve this money to pay for Social Security, for Medicare needs, for other areas such as tax reduction, or even balancing the budget and paying off debt." But the Clinton administration made clear the president would veto the bill on grounds of both the funding shortfall and the abortion amendment. Pelosi said: "Total spending of $12.6 billion is not enough and would seriously impair the president's ability to carry out our foreign policy." The World Bank was one of the bill's biggest losers. The legislation would cut U.S. funding for its concessional loan program to $576 million down from $800 million last year. The program is used to help desperately poor countries. Its biggest borrower last year, for example, was Bangladesh which has an average annual income of just $360 per capita. As well as budgetary constraints, the bill cited a recently approved loan by the World Bank to China as a reason for the lower funding. The contentious loan, to resettle poor farmers to an area Tibetans regard as traditionally theirs, was approved in June despite U.S. opposition and an outcry from Tibetan activists. Republican Rep. Benjamin Gilman of New York secured an amendment to reduce the bank's funding by a further $8 million, to $568 million, as a slap on the wrist for the China loan. The loan was decried on both sides of the House with even Pelosi, an ardent World Bank supporter, calling the loan "appalling." Assistance to Israel and Egypt remained broadly unaffected by the bill as was funding for the Peace Corps. The bill also funded anti-terrorism measures, narcotics control, economic and military aid for Jordan and assistance for the countries of the former Soviet Union.