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

To: Enigma who wrote (50472)	3/17/2000 8:53:00 AM
From: long-gone	Read Replies (1) \| Respond to of 116835

" intentionally suppressing the price of gold" A Special Report by Don McAlvany: SEA CHANGE IN THE PRECIOUS METALS MARKETS www.mcalvany.com This is a condensed article featured in Don McAlvany's March issue of The McAlvany Intelligence Advisor Please take a moment to sign in our guest book below for the full feature article. INTRODUCTION "We continue to remain optimistic on gold's outlook. All the gold in the world that is above ground in the form of coins, jewelry and ingots amounts to an estimated 130,000 tons worth approximately U.S. $1.1 trillion. The six largest technology companies (Microsoft, Intel, IBM, Cisco, Lucent and Dell) are today valued at more than all the gold produced in the history of the world. "Annual gold supply, which is today worth about $38 billion, is less than 1% of the annual supply of new bonds. When the psychology changes from paper assets to hard assets, the upside potential for gold is immense. In our minds, it is not a question of if, but rather of when." - Franco-Nevada Chairman Seymour Schulich, 2/1/2000 "To buy gold today is to vote against the survival of the present political order. It's that simple. For a private citizen to buy gold is to give a vote of `no confidence' in the present monetary order, which means banks and government." - Dr. Gary North A sea change has taken place in precious metals since the beginning of the year, with precious metals beginning to rise in concert with other commodities. As discussed above and in the February 2000 MIA, commodities have begun to respond to the coming inflation triggered by the Fed's (and other central banks') massive monetary expansion in recent years. A broad cross-section of commodities (represented by the Rogers Raw Material Fund) rose almost 40% in '99 and 11% in the first seven weeks of 2000. However, until recently, the precious metals have lagged. But, since early this year, gold rose from $283 to $328; platinum rose from $400 to $560 (a ten-year high); and palladium rose from $450 to $810 (the highest in history). Silver has been relatively flat to date, rising from $5.20 to $5.60. All the metals have pulled back in price at this writing. It should be no surprise to MIA readers that the price of gold (considered by knowledgeable people all over the world to be a sensitive barometer of financial instability and turmoil) has been officially suppressed or manipulated for years. The U.S. Treasury, Fed, other central banks, large bullion dealers, and even certain large gold producers like Barrick Gold have collaborated in official gold sales, forward sales or hedging operations (using complex derivatives), massive shorting, and well-orchestrated anti-gold propaganda in the global media. People in the gold industry have (with much frustration) seen this manipulation or rigging by the powers that be but have been powerless to stop it - until now. But this gold market rigging (or suppression) has been done at a time of low worldwide inflation and even net deflation in places like Asia, Russia, Eastern Europe, Latin America. The metals markets have been thinly traded in recent years and therefore easier to suppress. However, we are entering a very different period - a time of rising global inflation (thanks to the massive monetary expansion efforts of the Fed and other central banks and monetary authorities) - a period much more like the inflationary 1970s when official efforts to manipulate and suppress gold failed miserably. The European central banks and the ECB realize this and are backing away from the anti-gold position and machinations championed by the Fed, the U.S. Treasury, and the Wall Street establishment. Gold producers, who have massively sold forward future production in recent years to hedge their profits, did so in a low inflation or deflationary environment and prospered (or at least survived) with such a strategy. However, it is quite different and far more risky to do so in a global environment of rising inflation and commodity prices. If a huge financial accident or surge in inflation should spike the price of gold up a hundred or several hundred dollars (as we have just seen in platinum and palladium) those producers with huge short (hedge) positions would be crucified. Likewise for the big hedge funds and bullion dealers who have been intentionally suppressing the price of gold for political reasons and profiting handsomely from their bear operations. For these producers and bear operators, an inflational global environment is far more dangerous on the short side of gold. So the joy (and profit) in gold rigging, smashing, or suppression is beginning to dissipate. mcalvany.com