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Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: goldsheet who wrote (2123)	9/26/2000 10:43:24 AM
From: nickel61	Respond to of 3558

Slowly like a melting glacier it is becoming obvious that what the trading firms and the big international banks have discovered over the last ten years is that the nature of the computerization of the financial market has allowed them to create at will almost totally unlimited amounts of any commodity or financial instrument they want. So that they are able if their credit is extensive enough to "produce" enough gold, grain, oil, treasury bonds,silver or anything else by writing derivative paper instruments and selling them or buying them in the market place to completely control the concept of a "market price" which the rest of the uninformed participants still are dumb enough to believe has the historic information content of being where real supply and demand meet. The derivative writers then have been given through their ability to have almost unlimited credit the ability to manipulate the spot price of almost all traded items. If the decision is made that the economy needs lower interest rates we will manipulate them lower and gain the cooperation of the other factors in the market by punishing those that don't go along and rewarding those that do. Fortunes can know be easily amassed since we know the direction the market will go in since we are going to force it in that direction. We can buy out the needed politicians and market regulators since the gains are so stupendous that we have almost unlimited money to allow us to contribute to those that will help us and punish those that wish to expose our manipulations. It isn't that complicated and I am not that stupid but it is so colossal that I guess I didn't believe that it was being done. I am just coming to the realization that what gold bugs have been commenting on is really the fulcrum point of the entire financial worlds rigging over the last decade or so? You can enjoy your trading gains only as long as they are congruent with the forces that are controlling the direction of the markets you are participating in. Good luck.

To: goldsheet who wrote (2123)	9/26/2000 11:50:32 AM
From: nickel61	Respond to of 3558

Many who doubt the manipulation of the gold market through the use of derivatives call into question how the creation of paper gold can possible depress the price of the actual commodity in the spot market. Here are a few minor but fairly straight forward examples. The sale of gold bars into the spot market while they are still carried on the inventory of the Central Bank that lent them is one small example. The gold is physically lent to a bullion bank who sells it in the spot market and establishes a loan to repay the Central Bank the "borrowed gold plus 1% or so per year more for the lease rate" and with the proceeds from the sale of the gold into the spot market then invests in a US Treasury Note at 6% and earns the difference 6% - 1% or 5% on maybe a hundred million dollars. NOT bad. If the spot price of gold goes down before the gold has to be paid back the gains are many fold this number so the motivation is to convince others to do the same and force the spot price lower through all the selling. NOw all this time the Central Banks expect to get this "lent" gold back so it is still physically recorded as an asset on their balance sheet even though it is long gone and probably melted down and used to make earings hanging on the ear of some trader. So "paper has replaced real by subsituting a computer entry on the balance sheet of the Central Bank that such and such bullion bank will replace our gold on such and such a date with what was before the physical gold bar. Another way this happens is a financially savey market player who happens to be a gold producer like Barrick knows that it will be producing a certain number of tonnes of gold each of the next ten years from its Goldstrike mine and in order to put additional supply into the market today to make the price of gold go to an even lower level so the gold loans will be all the more profitable the future production can be brought forward and sold into the spot and future markets even though it is not to be actually dug and processed for many years. THis happens all the time and for the very reasons that I point out. It is theoretical gold production that is brought forward in a derived form and sold to make the spot price go where the market manipulators want it to go

To: goldsheet who wrote (2123)	9/26/2000 12:11:29 PM
From: nickel61	Read Replies (1) \| Respond to of 3558

Dear Jill Leyland, I want to thank you for your reply to my note. In your reply you stated that : "We have seen no evidence to suggest that the gold market is being manipulated in the way that GATA suggests (I can assure you that if we had we would be protesting loud and long). Neither do people who have carried out detailed statistical investigations of the market - such as Dr. Jessica Cross in a report we have recently published and the Gold Fields Mineral Services consultancy - believe that any conspiracy exists. " I must ask if you have read " 9/10/00 Reginald H. Howe - Jessica Double-Cross Study Puts Q(uisling).E.D. on the World Gold Council. " You can read it at : goldensextant.com In case you have not had the chance to read it I will share with you an excerpt : "Speaking about the US$243 billion total notional value of gold derivatives reported by the BIS for the major banks and dealers in the G-10 at year-end 1999, Ms. Cross asserts: "[W]e believe that this outstanding position should not be described as 'exposure' as it certainly could have negative if not alarmist connotations. A more objective reference would be a commercial banking presence in gold-based derivatives." She is entitled to her (wrong) opinion, but it does not change what the BIS and relevant national banking authorities require. Then, trying to clarify her position with an example, Ms. Cross proves her error. A mining company sells 10 tonnes forward through a bullion bank. Assuming that the bank covers the full amount of its long exposure in this transaction, she points to a total turnover counting both the long and short legs of 20 tonnes, which presumably in her view also represents 20 tonnes of notional value. Then the mining company "elects to buy back 5 tonnes of its forward sale," and the "bank will unwind the exposure in both legs of the original transaction." As a result of these two transactions of 5 tonnes, "the turnover against the whole strategy in that quarter is now 30 tonnes." The reader is left to believe that the total notional value at this point is 30 tonnes. But in fact, the notional value is not more than 10 tonnes. As reported by the BIS, it would be even less if some parts of the surviving position are with other reporting institutions. But the surviving position is at most a long and a short of 5 tonnes each, or a total of 10 tonnes. In Ms. Cross's fictional world, this position would count as 30 tonnes and require the same bank capital as a new forward sale transaction by another mining company of 15 tonnes, which including both the long and short sides would equate to 30 tonnes of notional value. Quite obviously, no rational person would argue that the same amount of bank capital should be required to carry these two positions, one a forward sale of 5 tonnes and the other a forward sale of 15. Finally, Ms. Cross suggests that the publicly reported notional value figures "...are very similar to the enormous trading volumes reported by Comex/Nymex where we know one ounce of gold gets traded over and over again but delivered or settled for only once." The proper analogy, however, is not to volume but to open interest. On an exchange with standardized contracts, counting the number of open or outstanding contracts gives a good measure of market size and individual exposures at any given point in time. For custom-tailored OTC derivatives contracts, summing notional values is an effort to do substantially the same thing. So what explains Ms. Cross's flatly wrong assertions about the concept of notional value? Why did no one at the WGC catch her egregious errors prior to publication? "Worrying" and "alarming" are the words Ms. Cross uses to describe the import of the notional value figures if they are what they are rather than what she says they are. And in this case, worried and alarmed is just what the big bullion banks with their huge short gold positions are. In a similar state of concern are heavily hedged mining companies like Barrick, which as one of the largest producers carries considerable influence at the WGC since it is funded by assessments on ounces produced. But most worried and alarmed of all are the politicians. They know that soaring gold prices mean collapsing political careers. " END Jill : I have to ask you and the WGC " what do you think about Reginald H. Howe's analysis of the Dr Jessica Cross report? Also , have you had any discussions with GATA on this matter ? I think its time to sit down and get to the bottom of this before people start going to jail. Or could that be the problem :i.e. its too late and someone is going to go to jail when all is known.? I never hear anyone point out where exactly is GATA incorrect. Do you know? If not ,could you ask around and let me know? I look forward to hearing from you.