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Gold/Mining/Energy : Cadre Resources (CSL.V) Awaiting production #'s and Financ -- Ignore unavailable to you. Want to Upgrade?

To: Francis R. Biscan Jr. who wrote (869)	5/29/2000 7:49:00 AM
From: Francis R. Biscan Jr.	Respond to of 1285

An excellent read: goldensextant.com May 26, 2000. Gold: Can't Bank with It; Can't Bank without It! The huge jump in the gold derivatives of Deutsche Bank and Dresdner Bank in the last half of 1999 invites all sorts of speculation, particularly when coupled with similar increases at Morgan Guaranty Trust Co. and Citibank. But as intriguing as such speculation is, it should not be allowed to obscure the more important as well as more factual story that resides in the larger BIS numbers of which the figures for these four banks are only a part. Much has been written recently about the short position in gold. In its narrowest sense, this short position is the accumulated physical gold transferred by deposit (loan) from central banks and others to bullion banks. This gold creates deposit liabilities on the balance sheets of the bullion banks. It must be repaid in gold. Virtually all of it has been sold by the bullion banks into the market, creating various paper assets on their books. Besides central bank deposits, gold deposit liabilities of bullion banks include unallocated gold, often in certificate form, of private parties. But the key point is that this physical gold has left the vaults of the banks and the control of the bankers. It can only be replaced by new production or market purchases, and thus constitutes a net short physical position of the bullion banks. (Continued)