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

To: Hawkmoon who wrote (54063)	6/12/2000 5:41:00 AM
From: d:oug	Read Replies (2) \| Respond to of 116820

THE GOLDEN SEXTANT This site takes its name from its proprietor's 1992 essay of the same name. The Golden Sextant won the first Bank Lips AG International Currency Prize. The subtitle of this site is MPEG - Money, Politics, Economics and Gold. Its raison d'ˆtre is to carry on the fight for sound, constitutional money. Latest MPEG Commentary 6/11/2000 - Central Banks vs. Gold: Winning Battles but Losing the War? Copyright 1999, 2000 - Reginald H. Howe All rights reserved. Any republication without permission prohibited. MPEG COMMENTARY - Page 12 June 11, 2000. Central Banks vs. Gold: Winning Battles but Losing the War? goldensextant.com Reginald H. Howe www.GoldenSextant.com row@ix.netcom.com June 11, 2000 Central Banks vs. Gold: Winning Battles but Losing the War? Many in the gold community, including myself..... Suspicious Gold Activities of Deutsche Bank..... Continued Rapid Growth of Gold Derivatives..... From the BIS: Pulled Punches and Indications of Strain..... Tightening Availability of Official Gold..... My friend Elwood has very kindly updated his prior chart showing..... From Manipulation to Loss of Control..... As the first major paper currency with no history of prior..... ...as a result of the Washington Agreement ...the gold price rallied far more sharply than almost anyone expected..... So far, the only apparent strategy for dealing with this desperately short gold market is to throw ever larger amounts of gold derivatives at it. Since these derivatives are coming in huge volumes from the largest and best-connected American and German bullion banks, all under the direct supervisory jurisdiction of the Fed or the Bundesbank, it is very hard to believe that this explosion in paper gold does not have some type of official imprimatur. ... it is even more difficult to think that this approach can lead to anything but a very bad end. Nor does it appear coincidental under the circumstances that the banks writing these gold derivatives are based in the two countries -- the U.S. and Germany -- having the largest official gold reserves. ... if there is significant physical gold backing this deluge of paper, it resides in an implicit promise of access to these countries' gold reserves. But neither country has yet done anything to prepare its citizens for the possibility that their national gold reserves may be called upon to bail out the bullion banks, many of whom got into trouble initially by trying to profit from inside knowledge of official efforts to manipulate gold prices. ... when the European central banks announced the Washington Agreement, they were quite unprepared for either the strength of the ensuing gold price rally or the magnitude of the short gold position that it revealed. Probably they had in mind only short positions obvious from looking at their own books..... ... they may have failed to appreciate, or at least not fully, was the extent to which the bullion banks had taken advantage of their knowledge or perception of a rigged market to write gold derivatives for their own profit. Too late, the signatories to the Washington Agreement may have realized that some of their own gold loans were in jeopardy of default, and that in allowing the bullion banks to operate without either effective regulation or appropriate reporting geared specifically to gold banking, they had made a grievous error. ... setting out to con the gold market, the central bankers ... ended up conning themselves. In the process, the ECB and EA central banks may also have unintentionally stymied effective use of their gold reserves to support the euro..... ... One solution for the ECB would be to sell dollars, which it has in abundance, not for euros, which it can create almost at will, but for gold. ... announcing ... that gold rather than the U.S. dollar is the ultimate benchmark for the euro, the ECB would likely strengthen the euro's foreign exchange value and win popular plaudits in Europe for the new currency. But it would also risk setting off an even stronger rally in gold than did the Washington Agreement. ... danger of that rally ... as the chief barrier to effective mobilization of the EA's gold, ... including quite possibly complete collapse of the dollar-based international payments system jury-rigged on the ashes of Bretton Woods out of unlimited fiat money and floating exchange rates. Gold was a hard master. But no master may turn out to be far worse. Central bankers no more lack for money or brains than Bill Gates. Nor do their considerable resources confer any greater exemption from basic laws of the market place and human nature. If GATA's Bill Murphy putting out the truth about the gold market on the internet does not start the central bankers sweating, perhaps Ed Murphy will. He is the American engineer who coined in the twentieth century the principle known as Murphy's Law, given milder but more eloquent form two centuries earlier by the Scottish poet Robert Burns in To a Mouse (On Turning Her Up in Her Nest with the Plough): The best laid schemes o' mice an' men Gang aft a-gley , An' lea'e us nought but grief an' pain For promis'd joy (off topic) <<Dougie, you need to find a better analogy than comparing a windshield to the global monetary system. Ron Reece>> ok Ron, and if you happened to be taking a walk in the park about 300 years ago and saw Isaac Newton looking at a apple in one hand while feeling the bump on the top of his head with his other hand, you would have advised him as follows. "You need to find a better analogy than comparing an apple to the global and universal observation called gravity so that a measured unit of force to describe the rate of change of velocity of a moving object can be identified."