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To: Enigma who wrote (2130)	9/29/1999 4:47:00 PM
From: Sam	Read Replies (2) \| Respond to of 3536

Please read the article that Paul posted earlier on this thread on how the miners may be negatively impacted by this sudden rise in gold: www4.techstocks.com

To: Enigma who wrote (2130)	9/29/1999 6:45:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 3536

2. What do you mean by saying that many miners were caught on the wrong side of their hedged positions - give an example of what you mean by this. d DD, Do you read the posts on this thread (other than mine)? The answer to your question is located in post #2125 provided to us by Paul Berliner. Message 11394288 Excerpts: The European central banks that pledged curbs on gold lending at the weekend have set off a surge in bullion lease rates that threatens miners and speculators alike, dealers and analysts said on Wednesday... ..''This is really one of the most unhappy times for the market I have ever seen,'' Jessica Cross of Virtual Metals Research and Consulting told Reuters. ..."There are very few people who have lived through such volatile trading conditions in the gold market. It's hard to get your mind round the changes. ''No one knows how big or complex this market is.''.... ....Of the hedging miners, many booked deals using rolling lease rate contracts, allowing them to benefit from the changing premium between the price of borrowing gold and borrowing money, a tactic rendered highly dangerous by this week's hike in rates. ''I am very concerned that we are going to see some casualties,'' said Virtual Metal's Cross. ''It would be ironic if producers had to go back to the central banks to ask for more liquidity,'' she said, adding that miners had erred in calling for central banks to limit lending. ''It shows a very poor understanding of the market. I don't think anyone fully appreciated the effects,'' she added.... ***** Is that a enough of an example for you? As for subsidization... When a group of banks, who have been responsible for 50% of the gold leasing activities, suddenly decides to cut off liquidity for the gold market, that is nothing more than a subsidization of the entire industry that mines and produces gold. It's tantamount to a govt opting to play an active role in the oil markets, using its strategic oil reserves to provide liquidity to market for that commodity, and then suddenly telling oil consumers that they will no longer sell oil from the reserve. The CB's have taken an active role in accumulating gold over the past hundred years or so, AT TAXPAYER'S EXPENSE. To now tell the gold consumers that these storehouses of accumulated precious metals will no longer be available to them, essentially perpetrated an economic attack upon the US dollar. My suspicion is that the European bankers want the US economy to slow even more (the idiotic IMF leadership has been pressing the Fed to raise interest rates up to 7%) so that Europe doesn't get left in the US' economic dust. So they are now essentially forcing an attack on the US dollar by using the golden hammer. Well fine and dandy... They export more to us than we do to them. If the dollar falls a bit more, that will only make US products more attractive in their markets and increase US corporate profits. The European economy will suffer greatly from this, I suspect. But there is no doubt in my mind that this decision is some form of macro-economic power play. To limit gold leasing to a mere 400 tonnes over 5 years is obviously an outrageous and reckless act. No doubt similar to making an heroin addict go cold turkey "for his own good". I wonder how we'll respond? Someone feel free to take my views to task... :0) Regards, Ron