Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Fidelity Select Sector funds -- Ignore unavailable to you. Want to Upgrade?

To: Julius Wong who wrote (4213)	2/8/2002 10:10:01 AM
From: MoneyPenny	Read Replies (1) \| Respond to of 4916

There has been strong denials regarding reported derivative exposure of Morgan Stanley and Goldman as regards to gold and other investments. These derivatives might not show up on the balance sheets of the companies but elsewhere, ala Enron. I have been following this for the past two years and while it is taking much longer than anticipated, all the pieces are falling together. We are just starting to understand the accounting issues I referenced earlier. It is my fervent hope that this all can be resolved without horrendous consequences for the world economy. It only makes sense to take out some insurance however (gold). Eyeing FSESX ....thinking maybe next week. I've gone over all my stock long position with an eye to their debt and book value, but who can you trust? The only thing holding us up is the American consumer. I am witness to this daily as I design and sell interior furnishings for million dollar condos and homes here in Southwest Florida where things are still moving along in seeming disregard of the rest of the country. OTOH... More from my morning mail: [GATA] A speculation on what happens if gold reaches $320 Date: 2/8/2002 4:10:16 AM Central Standard Time From: GATAComm@aol.com Thursday, February 7, 2002 Hi, Chris: I'm a currency strategist and have read a lot about GATA. I would like to know what you think would happen in the short term (this year) if gold spot clips $320. In simple terms, do you think banks would start to default in large? This will have a huge impact on spot forex medium-term strategy. Most of us are already short yen on the potential of bank default. If you have time, I would like to have your comment. L.W. South Africa * * * 4:55a ET Friday, February 8, 2002 Dear L.W.: Thanks so much for your inquiry about what is likely to happen if spot gold reaches $320. That is, are the bullion bank shorts likely to default? GATA has no inside information on this point, but I long have argued that, if, as we think, the bullion banks have been encouraged and even underwritten by governments, and particularly by the U.S. government, in the gold carry trade, and if some bullion banks, particularly Morgan/Chase and Goldman Sachs, are considered by the U.S. government to be "too big to fail," then they will be rescued from a gold run by the U.S. government's allowing them or arranging for them to buy the leased gold at prices well below spot, or by the government's greatly extending the terms of the leases, thereby preventing the worst of a short squeeze in gold. That is, in case of a gold run, the U.S. government effectively will expropriate the American public of its gold reserves, and expropriate the gold reserves of the other peoples of the world, for the private benefit of the bullion banks. As the Enron scandal has indicated, that's pretty much how Wall Street and the U.S. government have been working together all along: crony capitalism fleecing the world behind the mask of free markets, when those markets aren't really free at all. With good wishes. CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc.