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Gold/Mining/Energy : MIRANDOR-MIQ ON MONTREAL -- Ignore unavailable to you. Want to Upgrade?

To: jocko who wrote (2537)	9/28/1999 11:18:00 AM
From: jocko	Respond to of 2635

Could BE :-) 11:15p EDT Monday, September 27, 1999 Dear Friend of GATA and Gold: Here are excerpts from a long and meaty "Midas" commentary by GATA Chairman Bill Murphy served tonight at www.lemetropolecafe.com. The whole commentary can be read without charge by taking a free trial membership to the cafe. I'm grateful to Bill for letting me share some of it with you here. Please post this as seems useful. CHRIS POWELL, Secretary Gold Anti-Trust Action Committee Inc. * * * By Bill "Midas" Murphy www.lemetropolecafe.com September 27, 1999 Spot Gold $282.50 up $14.20 Spot Silver $5.34 up 10 cents Where do we go from here? I was asked this all day long. Day to day, that is very hard to tell. Last week the world was bearish on gold. I told you I was looking for a double and then a triple in the price from the lows of last week. That is how I am approaching this market. Like today, the big moves will come when out of nowhere. Got to be in it to win it.... The gold market is explosive. This is a big-picture play. It is time to invest that way. That is how I see it, anyway.... Veneroso Associates has nailed the significance of the statement by the European central banks. Veneroso Associates has a prestigious institutional clientele but gave me permission to present its "Gold Watch" analysis of the central banks' announcement to the Cafe. It is right-on, in my opinion. Gold Watch said: "We believe that the large dealers have known for a long time from their own books how large the gold lending business in fact has become. The large funds that are short also may have been informed. Judging from the behavior of these funds and dealers in the past several months, we can conclude only that these groups have been counting on significant new lending by the European central banks to maintain the recent large and growing supplies of borrowed gold needed to keep the current gold price depressed. "If this is so, the cessation of future large-scale European central bank gold lending is explosive. "The panic action of large market participants before even the European trading hours commenced would suggest that such large market participants realize this...." * * * Reuters commentary from my favorite chairman of a gold company: "'This means that the hedge funds that have been looking for supply of gold from Europe have just lost it,' said Robert Champion De Crespigny, chairman of Normandy Mining Ltd, Australia's largest gold mining house. "'It also means that the giant cloud that has been hanging over gold from European sales and European lending has just disappeared,' de Crespigny said." The good chairman may not want to talk to me, but he talks as if he reads Midas.... There is little doubt that a big rift has developed between some of the European banks, the Japanese, and the U.S. Treasury, possibly including Alan Greenspan. They made statements all summer suggesting they were not happy with the U.S. way of doing things in the financial arena and with what was going on in our financial markets. With all the comments that have come out of U.S. officials about selling IMF gold and from what we have been reporting to you, it is certain the United States did not want to see this announcement at all.... * * * I have been saying for a couple of months now, "We have the shorts right where we want them." It would have been only natural if you wondered if I had lost it. Now I think you know why that commentary was delivered to you several times. * * * How about a drum roll here! Let's have an encore and bring in the Cafe's John Brimelow: "NEW YORK, Sept. 27 (Bloomberg) -- Comment from John Brimelow, director of international equities at Donald & Co. in New York, on the outlook for gold prices after 15 European central banks agreed to limit their gold selling and lending over the next five years. "'I think we could see the price go up $100 in less than a week. This is what happened in 1985. It turned $45 in three or four days. The gold market shifted, and it caught a lot of people my surprise. Just like today. "It is very likely that many large lenders and borrowers were predicating their activity on the assumption that there would continue to be this huge flow of European gold into the lending pool. If that is to be contracted, the whole business of lending and borrowing gold will have to be seriously reconsidered. The whole game of borrowing and lending gold has become much more dangerous. "I haven't made up my mind why the European central banks would make this announcement. The obvious answer is that they've become convinced by petitioners that the lending of gold at very cheap rates was, in effect, undermining the value of one of their own assets. What they've done is basically create a huge bubble in the gold market by lending gold out at rates lower than 1 percent a year. "Another answer may have to do with some sort of struggle between the United States and the rest of the world on the issue of hegemony and the dollar. The argument runs that the Americans believe themselves to be major economic beneficiaries of the fact that the world uses the dollar as the reserve currency, and therefore the other central banks have become extremely jealous. Hence the opposition of the Americans to proposals by the Japanese for an Asian currency zone. This is a very deep issue that will take people a long time to figure out. It's also possible the central banks could just be interested in boosting the value of their reserve.'" * * * All this cannot be good for the U.S stock market. For months now I have suggested that the banking index would tell it all. It tanked again today, down a whopping 15.70 to finish at 737.15 -- a new low close for this move down. That portends bad news for stock prices. Now that the gold psychology has changed in one week (gold will not be discarded as a monetary reserve, etc), gold demand could skyrocket in the West as the stock market takes its comeuppance. -END- ------------------------------------------------------------------------ eGroups.com home: egroups.com egroups.com - Simplifying group communications