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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: tyc:> who wrote (44428)	11/1/1999 2:29:00 PM
From: Gary H	Respond to of 116762

Very good summation. Thanks.

To: tyc:> who wrote (44428)	11/1/1999 10:38:00 PM
From: tyc:>	Read Replies (3) \| Respond to of 116762

In my earlier memo i surmised that the the forward sale of gold by mining companies could result in even more gold being shorted in the spot market because of a multiplier effect. Just been thinking.... When the bullion bank short sells the gold it places the proceeds on deposit to earn interest until the forward sale is due for completion. Does this not significantly increase the cash deposits of the bank; is there not another multiplier effect here that permits the bank (or the banking system) to increase its lending manyfold on the strength of that cash ? If so that cash is worth far more to the bank (banking system) than the simple interest calculation that determines the forward sales price. I wonder if this is why the central banks are prepared to lease their gold; it enhances the liquidity of the banking system by adding cash to it. Any economists out there ?