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

To: The Vet who wrote (57813)	9/2/2000 11:52:23 AM
From: Ken Benes	Respond to of 117012

I am well versed in the mechanism of the futures market and agree mostly with your post. I do think that you have to prior into the facts a bit in determining why the amount of virtual gold being traded is so much greater than the amount of physical gold being produced. Without belaboring the issue, it has been well documented that the cb's and the bullion bankers have created an environment where short sellers of gold appear to have a bit of protection if the markets turn against them. During last years short covering rally, Kuwait, then Ecuador, and who knows how many others transferred their gold to England for a better return. The entire endeavor was designed to make available to the market large amounts of physical gold if gold delivery was required on a portion of the virtual gold contracts. The availability of the gold does not result from an outright sale rather the gold is lent for sale into the market. The lending country retains the gold on its balance sheet, the market is stabilized and the price of gold continues to trade at an artificially low price. The same entities that crafted this bailout of the gold market were also instrumental in designing and selling many of the forward/hedge programs employed by the producers. The result, an environment of poor fundamentals fed by a virtual market that is guaranteed by cb gold and the inground reserves of the producers. I defy anyone to challenge the notion that most, not all, producers have shot themselves in the foot, and ceded their independence to the dictates of others who do not have the producers best interest in mind by engaging in these practices. Ken