(GATA News) That would electrify the gold market. Am I dreaming ?
From: LePatron@LeMetropoleCafe.com
Le Metropole members,
Midas du Metropole has served commentary at The James Joyce Table.
January 13, 2000
Gold poked its head up in turtle like fashion today.....
Industry consultant and commodity research group, Gold Fields Mineral
Services, came out with more of its bullion dealer, lackey diatribe
yesterday. I hope to have a serious analysis of their report in a few
days from supply/demand analyst guru, Frank Veneroso.....
Gold bar sales robust in Beijing ... the Caishikou Department Store
in Beijing to buy unprecedented amounts of gold bars.
... prefer gold bars over the jewelry to maintain and increase their wealth.
It was the first time that China sold gold bars to the public since 1949.
The decision by People's Bank of China to share its 1.5 tons of coveted
metal with the public is seened as a step forward to open its gold market.
Date: 01/13/2000
Author: SUN MIN , China Daily staff
Copyright¸ by China Daily
End.
Prior to the manipulation of the gold market, crude oil and gold always
had some sort of historical pricing relationship. A sharply rising price
in the price of oil usually meant a rising gold price, maybe sharply
rising gold price. If the price of oil does explode thru $27, it is
going to be harder and harder for the pundits to explain why the price
of gold is not going up.
Since so many of you have expressed interest in the oil and Y2K subjects,
I am presenting two great posts at the greenspun.com website
that were sent to me by Cafe member, Nick F. I think they say it all.
While very lengthy, they are written by two Pros that know the oil business
very well and talk the talk of trading Pros. Since this topic may be of such
importance to the gold market in the coming months, I have presented them
in their entirety so that you could get a comprehensive feel of what is
really going on out there in oil land.
Take it away Greenspun:
Oil's Slick Spots keep spreading
greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
What's up with oil? People keep asking me to tell them what I know.
I know that folks in the oil biz are pretty tight lipped and not saying
much right now, but isn't that what we expected? I'm seeing and hearing
admissions of problems with a trend of refining problems that has been
moving slowly upwards. Usually though the refinery boys can tell you
what their problem is over a cup of coffee. Not now. If you ask about
Y2K you get a funny look and a glance away and some mumbling about
"well, there's some funny little problems, but we can't really talk
about it, or I can't really say for sure but we've not been having
normal problems." These are the guys that used to be able to tell ya
straight up, "Oh, we've had a this (fill-in-blank) or that
(fill-in-blank) problem, but nothing too serious." The serious stuff,
like after an explosion, when investigations are underway... people shut
up. This is the way it is now, yet we've not had any catastrophic
incidents. So this is what I mean by tight lipped.
Weather is mild and this has greatly minimized troubles for refineries
that have had shut-downs because zero degree weather isn't around to
exacerbate & complicate repairs at refineries.... [continued at web site]
[bits and pieces from web site "for a taste"]
... But as I understand it, it is a short term solution.....
... has bought time and kept things from crashing simultaneously.....
... reports of problems at the wellheads in Texas including.....
... plus there are off shore problems too.....
... problems are not as catastrophic (yet) as first expected.....
... that involve "temporary" fixes thought to be permanent fixes.....
... and no one wants to talk much. Not a good sign IMHO but don't jump
to premature or catastrophic conclusions. We just have enough indications
to know that there are problems, they're not catastrophic, not yet anyway,
and they are apparently persistent in at least some instances.
... of loading dock problems and even reported tanker problems.....
... don't know what to make of these reports.
... we are now midway into week 2 of the post rollover period, we are a
far cry from being through the worst of the time period. Yet as I stated
about 10 days ago, the severity of crisis has I think been reduced to no
worse than a "5" level. We've seen a growing trend of refining problems.
Will this trend continue to grow? We don't know. So far, most problems
have been manageable and limited to a maximum of a week of disruptions
so far. However some refineries just can't get rid of their problems,
with enough minor glitches still occurring with enough frequency
to keep from ramping up to preferred production levels.
One thing that seems to be developing is that many refineries are
apparently experiencing or announcing refining capacity shrinkage.
This is especially true in Asia. Shell in Singapore and also Exxon,
(I think it was Exxon) announcing their refineries were cutting back
for the next year due to what they claim was declining demand???
OH REALLY??? Hmmmm.
Asia was already recovering from its 2 year recession and oil demand
had risen. And now suddenly we see refineries cutting back to only half
capacity or less? Somehow, I don't think this passes the smell test.
Frankly, I'm surprised the PR boys couldn't come up with something
better. I mean, they get paid big dollars to do this and play golf too.
Obviously golf has been more important, what with all the nice weather.
At any rate, I strongly suspect the reason for production cutbacks has
more to do with production problems (related to Y2K incidents) rather
than a concern for over-supply.
Something seems to be up because it appears "insider's money" within
the oil industry is "buying" oil right now on the markets. This shouldn't
be happening because inventories are supposed to be "up" with excess supply.
When a market has excess supply its price normally drops. So why didn't oil
do the real deal drop? I mean since rollover oil has in reality only taken
a minor diip in the large scheme of things. Right now, I'd think we should
be seeing $20.00 oil. But today we're up to over $26.00 pb. Does this mean
the market's are telling us something now. It would seem logical to say yes,
but I don't think so. I think its possible but really it's too early to tell
if insiders are buying because of Y2K related problems. It may be that
insiders are buying because they are indeed actually seeing production
problems at the wellhead or at the refining levels or both. I'd be more
inclined to think it would be at the wells because refining problems would
mean a glut of oil if it there were significant refining problems but no
crude oil production difficulties.
1. The whole oil situation is getting "curiouser and curiouser" as.....
2. The end of the month data processing for oil wells is going to be.....
3. Refineries are experiencing an upward trend in problems. Usually in
January in the past, most refining problems were strictly related to
severe cold weather. Minus 30 degree weather or minus 10 degree weather
can be a real problem for a refinery. We've not had such a weather
related problem in any of the refineries this year because the temps
have been spring-like. OH, are we really in winter? Or maybe when
we rolled over we leaped forward into March already? One thing for sure
is that January doesn't normally see much in the way of refinery
problems apart from cold weather factors. Remove the weather from
the scenario and we seem to be having an inordinate number of refinery
problems for this time of the year.
Anyway, the track record shows an upward trend of problems. Will the
trend continue to escalate or level off or decline? It's too early to
say just yet. Many of the embedded systems problems that may have
developed are still unknown even to the operators, and hidden while
waiting for the opportunity to spring up like a jack-in-the-box
surprise. Again by mid-Feb we should have a much better idea. I can't
foresee us not getting solid, trending--data one way or the other by
mid-March. I don't think we have to wait til May or July to know about oil.
Meanwhile, for folks asking about Natural Gas I've had to say that my
contacts are somewhat limited. I do know that in looking at the list
of stories today we're beginning to see a surge of problems here but.....
... what I've heard from the embedded systems experts in describing
how the system overloads with problems...See the TAVA report citation
in my final post of 1999 in the oil industry section threads. There you
can read for yourself how embeddeds can overload on a slow buildup
that may take a month or more to become known even though it started
at midnite on rollover. As that wise sage of the baseball diamond,
Yogi Berra once said: "It ain't over, til its over." and folks we're
still in the top half of the first inning. It could be a.....
That's it folks. Don't expect to hear much solid information on oil for
at least 3 to 4 weeks. I figure it will take a week or so after the
first of the month for any problems to slowly trickle their way out
to the world...unless its a catastrophic event. Explosions are a little
hard to cover-up. An oil well shut down is a quiet story that never gets
published. We could have a fair amount of shut downs now and not know
about it. Until then, or unless I get substantial news positive or
negative, I probably will not post anything further on oil.
[End.]
... the alternate objection might be that the refineries are cutting
back because of excess capacity. True we supposedly have this huge glut
in the off-season for consumption. Yet, refineries produce better and
more efficiently when running as close to peak capacity as possible
(and of course lowering overall production costs of gas) so we have
that flip side.
The real smoking gun on this is why hasn't the price plummetted?
I again, suspect, in part based upon the published reports plus the
contacts inside the system that indicates greater production problems
than is being publicized. Remember also, with the mild weather, this is
not the time for such a heavy volume of problems to develop. Normally if
there are this many problems in January it is due to severe cold weather
affecting refineries in cold weather regions. BUT the weather has
provided March-like temperatures across much of the central portions of
the country, from the Rockies to the East Coast. So take away the
weather factor and we would normally not expect this level of refinery
difficulties at this time of the year.....
Also note we have Pennzoil/Quaker State announcing that they are
shutting down a refinery permanently!
pub3.ezboard.com
topicID=64.topic
Now the reason cited for the prices not doing the swan dive is
supposedly OPEC's Saudi Arabia quietly indicating that OPEC will
maintain tight production controls. This supposedly set off the
short-traders. But was that the real reason or a "cover" reason
prompting the shorts to cover positions and run?
Many of you have asked me how our effort to insist an independent
Congressional audit of Fort Knox is coming along. Well, I can assure
you that it is on the "hot burner."
[End.]
In the meantime, here is a Fort Knox tidbit that I would like to share
with you. Other members have sent me similar recantations as this one
from Ken M :
Bill,
I'm reading a very mainstream book on the gold trade that says that
during the collapse of the old gold pool system in 1968 the US Air Force
flew huge amounts of gold to the Bank Of England in an attempt to keep
the price at $35 per ounce. So much gold was transferred to the bank's
weighing room that the floor reportedly collapsed.
"The United States was already mired down in the Vietnam war and her
balance of payments was deteriorating; an attack on the dollar was a
natural sequel. Could $35 gold be maintained? The gold pool...thought
it could. They had nearly 24,000 tons of gold at their disposal. And
William McChesney Martin of the Federal Reserve Board rashly said they
would defend the $35 price to the last ignot. But the Tet Offensive
crushed that pledge."
"Between March 8 and March 15 1968, the pool had to provide nearly 1,000
tons to hold the price at the fix. US Air Force planes rushed more and
more Fort Knox gold to London...The pool's bluff had been called. Early
on the morning of March 15, 1968, the British chancelor of the exchequer,
Roy Jenkins, announced a sudden Bank holiday. The gold market was closed
"at the request of the United States."
Source: "The New World of Gold" by Timothy Green (New York: Walker and
Company, 1981) p. 128
I bought it for a buck in a cut out bin.
Green was (or is) a consultant to Consolidated Gold Fields. Everything
else in the book is quite sober and straightforward, yet this is as hair
raising a tale as I've read on any "goldbug" web site.
[End]
Here is a beauty. Barrick Gold is sending out a questionairre of sorts
to its big shareholders, in essence asking what they think of their
hedging strategies. I was told today that one of them was called up by
Barrick and Barrick was told by this big shot money manager that he had
SOLD all his Barrick stock and won't buy any back until they start
covering their forward sales positions. The reaction of the Barrick man
was great dismay according to my source.
That means I can now confirm 3 institutions that have sold Barrick stock
a la the great novelist, Arthur Hailey. One sale I know of was over 3
million shares. The GATA/Arthur Hailey strategy of sell Barrick stock
because it makes no sense to own it and also for what they have
perpetuated on their fellow gold companies is clearly working.
GATA is only interested in the truth, getting the gold price sharply
higher and going after the "bad guys." No reason we could not offer a
"carrot" to Barrick if they would get off their high horse, cover a good
amount of their 17 million ounce hedge position and then tell the public
what they have done.
That would electrify the gold market. Am I dreaming?
A Ghanaian High Court today adjourned until Jan 19 a hearing on the case
in which some Ashanti shareholders are seeking an emergency general
meeting to throw out the beleaguered company's board of directors.
You can go back and check an old Midas. A source very close to the Cafe
spoke to Ashanti Chairman, Sam Jonah, a week after the Ashanti blow up.
His words to my source was, "Goldman Sachs is squeezing our b's."
I wonder who is really behind the Ghanaian Government backing 4% of the
shareholders that are trying to throw Sam and his fellow board members
out on their butts.
Another Cafe source today told me that Goldman Sach's name has really
gone south in the central banking and gold industry world. First, I hear
the central banks have already lent Goldman as much gold as they think
is prudent under the circumstances and word is out how shabbily they
have treated the Ashanti folk. Everyone realizes if they will do that
to Ashanti, they would do it to anyone.
"Hannibal Lecter" it was a year ago and "Hannibal Lecter" it is now.
Some things never change.
Midas
Bill Murphy ( Midas )
The above mention of GATA is as follows.
Bill Murphy, Chairman, Gold Anti Trust Action (GATA) gata.org
Also, GATA related articles can be obtained at the pay for view site.
Bill Murphy, Le Patron, Le Metropole Cafe lemetropolecafe.com |
