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

To: William Peavey who wrote (24867)	12/23/1998 8:31:00 PM
From: Enigma	Respond to of 116960

Bill - re: leasing/sales - we must be missing something here - the transactions are so commonplace that the lessor must be fully aware that the gold is being passed on, or sold, to a third party. The lessor does not have any collateral however. Maybe it does? A commonsense solution would be for the lessor to take collateral against whatever asset the lessee substitutes for the gold it sells - or else the lessor may be granted a general charge against the assets of the lessee. If this is the case you'd have to think that most gold loans are setttled in cash - but presumably the lessor has to be compensated for the present value of the gold loaned? What we need on this thread is a detailed description of the mechanics of this lease trade and the recourse of the lessor - the above is my best guess. If I'm right and the gold price goes up substantially there won't be a wild scramble to buy the gold back (it's gone) but there will be a sharp contraction in the activity, and I imagine a rise in lease rates. E