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

To: cayman1 who wrote (86048)	5/29/2002 10:42:10 AM
From: E. Charters	Respond to of 116791

These guys are right about the mechanism of financing and what derivatives are. Where they are wrong is in saying that the production or sale of gold matter that much. The IMF auctions of 60 tons every 3 months in the 70's, the California gold rush, and the Spanish gold production from SA in the 1500's proved that gold price is very slow to react to massive increases in production and sometimes will not react at all. --- The 22 year gold bear is a long one. It is not that much longer than other bears in constant dollars. In the past 200 years there have been 27 year and 23 year and 15 year gold bears. In fact the average gold bear is perhaps 17 or more years. Our California Golden Bear is about to give birth to a new baby bull. ********* Quote from #86052 --> They first got short not by logic but as a gimmick gold banks to obtain development money. They thus helped the gold mkt go lower by constant selling of future product. As proponents of Free Markets, we have no objection to a commodity producer seeking to fix the sales price of the item they produce. They need to know a hard revenue figure in order to project spending. But that is not what happened in the last 10 years. Producers liked the profits from being short gold & loved non-recourse loans for production that require shorting the production. It is now time we all stopped calling these maneuvers "hedging". It is not. It is shorting gold. Yes, it's hidden in a maze of sometimes incoherent derivative transactions but the bottom line of a commodity spread is that it is a short sale.