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Gold/Mining/Energy : Gold and Silver Mining Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Trekson who wrote (4032)	7/22/2007 9:29:27 PM
From: IngotWeTrust	Respond to of 4051

Sounds t'me like a HEADZUP for any junior... JES writes Sunday 7/22/07 When a major gold company such a Newmont (see Friday's PR) buys their way out of an OTC short of gold derivative in a sharply rising gold market, the debits in billions are staggering. GAAP and SAS accounting rules now require that a derivative taken must be identified and accounted for in profit or loss, charged directly to the earnings or lack thereof to exactly what property it represents. Since the main reason for derivatives short of gold was to raise money to fund new property development, the junior must place their percentage of the property as collateral (subordinate) for the loan and therefore carries the risk of the derivative. As a result, part of those staggering billions of dollars in loses will be applied as a debit to the property in which the junior has a percentage interest. That means the property in which the junior has say 30% must take the debit of the 30% of the loss incurred in the close of the foolish derivatives. Many junior property percentage interests will in all probability never make a penny to the credit of the junior. Sure they can count ounces, but not dollars possibly EVER. I dare to say that most junior percentage companies with a major who has closed at staggering debits or is still up to the chin in short of gold derivatives have no clue what has happened to them. In this case ignorance is bliss. The stockholders have even less of an idea or just do not believe it. As a result they are living in quite a dangerous ignorance of reality. This is true for silver as well as gold. ================== My Commentary on HIS commentary: IGNORANCE is bliss? Sounds to me like shorting is bliss...the only prob is that most of these "juniors" are below the legal shorting threshold, dollar-wise. G_T