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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (8090)	10/7/1999 6:20:00 PM
From: GVC	Read Replies (2) \| Respond to of 81087

from WSJ: "...But now with gold soaring, the prospect that spot prices will rise above Barrick's hedge price is increasing. Currently, Barrick says it has sold forward about 13.3 million ounces of gold at an average price of about $385 per ounce through 2001. However, if the spot price does rise above $385, Mr. Sokalsky said Barrick has the luxury of deferring its forward contracts for as long as 15 years and instead selling its gold production at the spot price. That means the company can wait for spot prices to return to lower levels before returning its borrowed gold to the central banks"

To: Hawkmoon who wrote (8090)	10/8/1999 9:11:00 AM
From: philv	Respond to of 81087

I completely agree with your argument regarding gold and weak economic structure. There isn't enough gold in the world to make up for a country's poor economic performance. Besides, no country, including Switzerland comes close to a gold standard. Gold is held in the foreign reserve accounts, together with other deposits such as US dollars, Marks, Yen, etc. These foreign reserves are themselves a small percentage of a countries currency and liabilities, and gold is a small percentage of the total reserve. The Europeans hold about 15% of their foreign reserves as gold. The Euro is not 30% backed by gold, only their reserves are backed by gold which was set at 15% to my recollection. My point is that gold plays a very tiny role in the money supply equation, especially at todays price of gold and in light of the money supply inflation over the years. England's 800 Tonnes of gold for example, works out to about 25 million ounces which at $300/oz comes to about 7.5 billion dollars. Not much really. If all the gold in the world was equally divided, we would each have about an ounce. Despite its relative small number, gold is very liquid, recognized throughout the world, and is trading in London in the amount of about 1000 tonnes every day! A most curious commodity wouldn't you agree? Please correct me if I have made some wrong assumptions.