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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: John Graybill who wrote (2158)	7/5/2000 7:17:55 PM
From: pater tenebrarum	Respond to of 436258

LOL...roflmao, tomorrow they'll all come out with their silly upgrades... an interesting, if slightly tinged with polemic, post from kitco: Date: Wed Jul 05 2000 15:53 Allen(USA) () ID#246224: Copyright © 2000 Allen(USA)/Kitco Inc. All rights reserved George Milling Stanley writes article published Sept 28-9, 1998 called "Central Banks and Gold - The Facts" ( can be found in the Speeches and Articles section of the World Gold Council website ) . From the article, ... "Gold swaps are operations where a central bank enters into a dual transaction, selling for immediate delivery, and buying back the asset sold for delivery on a specified date in the future. These deals are extremely common in the foreign exchange markets where they are known as "repos"; no-one would dream of describing a repo transaction involving the dollar, for example, as an outright sale." ... { Round feathered bird, waddles, quacks. I would call this a sale with the proceeds used to buy a deliverable gold futures contract, followed by a deliverable futures dollar contract, followed by a deliverable futures interest rate contract followed by... "NO ONE WOULD CALL THIS A SALE" translation: it IS a sale by any other means tied to a bunch of leveraged derivatives contracts, all of which no one whould have a clue as to how to evalute, etc.} "Of course, the initial impact of all these transactions on the gold price is exactly the same as if the central banks had sold their gold outright. The bullion banks that borrow the gold, or arrange the swap, sell it immediately into the market, putting downward pressure on the price." ... {They know the effect. Possibly they want this effect. Read onward. Are they mobilizing gold in order to stablize the financial system through a series of derivatives contracts designed to reduce 'volatility' and induce 'predictability'???} "They ( bullion banks ) use the proceeds to finance a variety of transactions, including producer hedging and speculator short sales." ... {Translation: All manner of leveraged deals, derivatives and other hogwash.} "But there are two important differences: first, these kind of transactions will be unwound over time, and that should eventually reverse their impact on the gold price. Second, they show that central banks involved in this sort of transaction have certainly not lost their faith in gold's role as a monetary asset." ... {The positions will be unwound. Think 'Oh, yeah, like real fast.'} {Having gold in hand and having a bunch of baloney derivatives contracts which are intended to 'stablize the financial system' are two different things.} "A large number of other gold producing countries ( as well as Russia ) around the world ( are also buying their own nation's gold production for reserves ) , including Phillippines, Venezuela, Mongolia, Kazakhstan and the People's Republic of China." ... {Here's where we find that "a large number" of countries are willing to pay local currencies at today's low dollar conversion rate for real gold. They type in some keystrokes and they get real physical gold. The lower the 'price' the more gold they get. Their miners can not refuse the 'money' and can not demand 'dollars'. They are in-ground on sovereign land and can be taken quicker than you can blick your pretty baby blues. Remember Australia's comment about having reserves 'in the ground'? We were puzzled by THAT comment weren't we?} "Recently, the economic and currency crisis that devastated Asia convinced the government of Soth Korea that gold can play a useful role as a monetary asset. This led the central bank to talk about perhaps building up its gold reserves, which are very small in comparison with those held by the countries elsewhere in the world against which Korea would like its economic performance to be measured. The Bank of Korea took the opportunity provided by the country's big gold collection campaign to add a small quantity of gold to its reserves earlier this year." ... {Korea made a big deal about how it was going to sell the gold its citizen's 'donated' to get enough dollars to avert the currency crisis. In fact it told its citizens it would give them Won at current rates a little while later ( no interest rate loan thank you very much ) . Nice test case here. See what you can get away with in terms of transfering gold from your citizen's pockets into your Central Bank for a few typing strokes on a computer terminal.} My comments start here ( will they never end??? ) : Its seems to me that there is a CB subculture at work here which is leading a parade of the damned. They have convinced everyone that the current dollar based system must work "or else". They found that gold was the one non-relativistic element in world finance which in many ways made the rest of the floating fiat folly look bad and added to the possible 'run away from the system' alternative. They needed to get physical gold into the system and be able to knit it into a vast web of derivatives contracts ( claims and counter claims ) as their attempt to bring stability to the world financial markets. IE - to compromise the offical gold hoards which formed the only real alternative to the present dollar system. Everyone claims to have not 'sold' their gold when in fact a huge chunk of gold has been dishoarded in an attempt to stave off a violent system failure in the fiat realms. They have done everything BUT sell it though ( in effect trucking gold out of the vaults to ?? ) . And we must never lose sight of the fact that the gold still exists SOMEWHERE out there. It did not go to peasants jewelry hoards. It went to the 'right' places at the 'right' time. The gold that Europe repossessed from the USA after WWII and prior to the closing of the "gold window" by Nixon was just the same amount that Europe gave up to the USA for war material used during that war. Swap and counter swap. A gentlemen's agreement. The window closed at the right time. Someone ( s ) was owed this 10,000 tonnes of gold that has been dishoarded in this current parley. One day we will know who it was, but I don't think we will find out now. Maybe Japan, Russia or China as counterparties to the various wars/tensions??? Maybe people we would never guess. What is it that Eisenhower said about the being wary of the 'industrial-military complex'? Or was he refering to the 'world central bank cartel' indirectly? Someone ( s ) called the shots and made up this game to play. We are in a transitional period from one act to the next. When we get to the other side of this hornswaggle it will blow open like a revelation of the most putrid sort. No one will narate a story to tell the masses of men and women, they will simply be required to play their bit parts in a new but very old game called "We Own the World".