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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Nadine Carroll who wrote (96063)	5/28/2002 9:02:25 PM
From: Mike M2	Read Replies (1) \| Respond to of 132070

Nadine, yes I believe it. Central Bank sales of gold, gold loans- where the CB loans it gold to a bullion bank who then sells the gold and invests the proceeds in bonds ( gold carry trade) along with producers forward have all contributed to the decline in the price of gold. Larry Summers paper provides strong circumstantial evidence for me that his notion to "peg the price of gold" was implemented. Even if you don't buy into the bankers malign intent argument we do know that the gold carry trade has diminished, producer hedging has slowed and many companies are closing out their hedges. I am not up on the latest CB sales but i have the impression that it has stabilized /declined. All these factors along with the implosion of various sectors of the stock market bubble should serve to support a prolonged( years) bull market in gold. At some point when I suspect the Central Banks may give up on gold sales if the shorts are able to weasle out of their position. Derivatives meltdown? I don't know . The bankers have been very successful with bailouts during the 90s but it won't work forever. I am happy with a slow steady rise in the price of gold for now. I feel gold stocks will do well as the excesses continue to unwind and more people start to recognize magnitude of the excesses. Gold at $1,000 oz would not surprise me but I'll be thrilled when we hit $350-400 . I recall reading that the President of NEM figures NEM would generate $4/ sh cash flow at POG $350 12X cash flow is reasonable so NEM would be a $48 stock. mike