It does mention Barrick ... so I thought it should be posted here also.
We have to worry when something looks to good ... Barrick's derivatives look perfect ... who in the world would be on the other side of those?
Don't know if this was posted before.....
THE INTERNATIONAL FORECASTER
20 January, 2003
An international financial, economic, political and social commentary.
Published and Edited by:
Bob Chapman
Phone & Fax: 941 639 4756
E-mail: bif4653@comcast.net
Gold
The elitists are about to have a Custer experience
The Bank of Canada, a persistent gold seller over the years, was seen selling again just before
year-end some 10% of their remaining reserves or 25 tons. We guess there'll be 20 nations with gold
left soon. Canada now has 599,000 ounces left. That is down from 21 million ounces in 1980. What
fools to be so short sighted.
Gold needless to say ended the year at a new recent high of $347.60 and the CRB index was up 23%
for the year. 2002 was a very happy payback year for gold bugs.
The Shanghai Gold Exchange is preparing the way for overseas bullion dealers and individual investors
to trade on the exchange. Chinese gold demand exceeds locally mined supply, so there is scope for
foreign numbers, allowing direct sales to consumers. A cash only market at spot, presently the
exchange is working toward deferred settlement.
JP Morgan Chase and the rest of the gold manipulation criminal cartel are not the only ones short gold
bullion. We know there is a distinct possibility that Morgan will get bailed out, but there will be many
others that won't be. You know I've believed that the short was 15,000 to 29,000 tons for three years.
In fact, there may be little gold left in central banks. There will be covering of short positions coming
and it will blow the top off the gold market. That is why we see $840 by June or by year-end.
Remember we called for $350.00 an ounce last year and it happened. Shortly, hedge positions for the
last quarter will be reported and will bring warmth and joy to your hearts. You are looking at disaster for
many companies. Barrick, AngloGold and Placer Dome will be smashed. They are about to find out they
have been in a street fight and lost and that they are no longer the masters of the universe. By the
time we finish with them they'll be masters of nothing. We implored shareholders of Barrick and other
hedgers to throw out their management in the early 1990's but we were a lone voice in the wilderness.
Then came that giant Bill Murphy and GATA to lead and show us the way to expose the problem and
these crooks. Finally our labors are going to show fruit and the cabal is about to go down in flames. All
of you don't forget, don't just take your money and run, make sure these evil people pay for what they
have done.
The Chinese central bank increased its gold reserve by 100 tons in the last quarter of 2002. That
should go well with the 300 ton projected increase in public Chinese consumption in 2003. That
400-plus ton off-take wipes out the total official sales under the Washington Agreement. China will
need gold because it faces a serious shortage of mineral resources. We then add to the mix a 1500
ton shortfall of production to usage, falling production and 15 to 29,000 tons either sold or short by
central banks and you have a potent concoction that could send gold soaring. The game is over and we
won. Watch the price soar and watch the failure and scandals that ensue. Next we pass into the
illiquidity phase and that is when the shorts panic and pandemonium sets in. February will be a
monster month for gold following an excellent January.
Low interest rates certainly make gold a more attractive investment. The opportunity costs are close to
zero. Thus low rates are also causing negative interest rates. That is inflation at 1.8%, which is higher
than the Fed funds rate of 1.25%. That is a negative return of .55%. Rates won't go up until later in
the year due to the fragile economy, but when they do it will be due to a flight to quality. February
through year-end gold's performance will be spectacular. We are still in an accumulation phase for gold
as we begin phase two. This is the most stealth move in gold and shares in history. There are
hundreds of funds with no gold shares at all, which is really mega-bullish, because they are supposed
to be leading phase two. Not only does the public live in darkness but so do many of the professionals.
They don't understand that gold is real money and is about to again replace the dollar as the world's
preeminent currency. Foreigners understand but Americans don't. Then again, their media is freer than
ours and they do get some of the truth, we get none of the truth except through newsletters and the
Internet. That is why the market cap of gold shares is still only $75 billion up from $45 billion two years
ago. Wait until only 5% of investors and money managers catch on. Once the shares move the gains
will be colossal. Gold producers and bullion banks are still short and they have to eventually cover,
which is an explosive situation. As you can see gold and gold shares are a lock and silver will follow,
but remember you have to be in the game to win.
We believe there are three possible reasons that the US Government may return to a gold exchange
standard. We believe the elitists were the shadow purchasers of the gold sold by central banks at their
direction, the Malaysian Gold Dinar, which will be actively trading by June and an Islamic Arab Dinar to
follow. This will force western governments to again back their currencies with gold. We also believe the
euro to be a mitigating factor with its 15% gold backing. As gold prices rise so will the value of the gold
backing the euro, thus the percentage of gold backing will rise. There is no question that Islamic
countries are putting financial pressure on the US, UK and Germany. The Muslims believe they can
destroy capitalism by forcing gold to the forefront and we agree that this could and probably will be
successful. We then also have other mitigating events such as new gold exchanges in Dakar and China
as well as rampant anti-American sentiment forcing the gold backing issue. Now we can better
understand Sir Alan Greenspan's comments regarding "monetary policy, unleashed from the constraint
of domestic gold convertibility, has allowed a persistent over issuance of money." He realizes that the
US will have to return to a gold exchange standard to compete with other currencies. We would not
expect a US or Fed move in this direction until gold traded higher than $1,500 an ounce. Once the
dollar's value was reset against gold then economic recovery could begin. Then these criminals, if still
in power, would begin the financial debauchery again.
Portugal sold 15 tons of gold. Its report reflected a 606 ton reserve now 591 tons with a swap of 381
tons and leased 52 tons or over 70% of reserves. They are probably the second biggest gold lender in
the world and that really means 70% of reserves have already been sold. As we said before the game
is over and we have won. Just wait and see. It will soon be public knowledge that most of the sovereign
gold reserves are gone and all these countries have been lying about their gold reserves for a long
time.
UBS Warburg says it expects gold to average $353 an ounce in 2003 and $356 an ounce in 2004. They
also upgraded their opinions and price targets of several gold companies, one of which was our favorite
Goldcorp (GG-NYSE). The bank sees a favorable supply-demand balance, a weaker US dollar and
continuing geopolitical uncertainty.
Deutsche Bank also weighed in with a 2003 gold price target of an average $340 an ounce.
Both estimates are plain stupid. They are devised to cap gold in this price range, but it won't work. The
biggest scandal in financial history is about to break and when the shorts are forced to cover the price
of gold will explode.
As we predicted long ago, as gold prices rose jewelry consumption would fall and investment demand
would increase. That is just what has happened as GFMS reports that investment demand increased in
2002 from 117 tons to over 400 tons. This comes as production continues to fall. The fundamentals
couldn't be better.
Gold closed up for the seventh week in a row, a truly phenomenal performance. Anyone who doesn't
recognize that gold is in a bull market is just plain stupid. The gold manipulation cartel are buyers
probably for themselves. Then there are the producers who are hedged, speculators who are short,
banks and central banks that are short and the mega shorts in the gold shares that really haven't
moved yet. As we told you at the beginning of the year gold will be $500 an ounce by the end of
February and $840 an ounce by June or December. There is somewhere between 15,000 and 29,000
tons either short or sold and we are about to see a demolition derby that will last for at least two years.
Silver is soon going to follow gold in a seccession of lock-limit up days, and the specialists on the CFTC
will be wiped out. Do we hear force majeure? The commercials are about to be decimated. While the
biggest gold and silver bull market in history gets underway Wall Street ignores it, CNBC lies about it
and the Fed and the Treasury are frozen in the headlights.
Gold now has a mind and life of its own. GFMS says gold will
average $330 this year and may hit $390.00. All they have done
is talk gold down for years. They say after the Iraq war gold will
return to $310 an ounce. They remind us of the touts on Wall
Street who seldom tell the truth.
The World Gold Fantasy Council is little better. How do they
explain that the US Mint Gold Eagle sales were 33,500 ounces by
the 15th of January, up from 9,500 for all of last January? Silver
Eagles minted in January's first two weeks were 1,115,000, which is
200,000 more than in all of January 2002. The days of
disinformation by the above criminals are over. The 15-year
suppression of gold is over and the crisis of confidence begins.
The elitists are about to have a Custer experience.
Bob Chapman
bif4653@comcast.net
January 20, 2003 |
