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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: MUDMAN who wrote (3070)	1/16/1999 2:22:00 PM
From: Bill Murphy	Read Replies (2) \| Respond to of 81857

Mudman, I became interested in gold because of the natural supply/demand deficit. It is very large now. Say 1000 tonnes. The deficit was met last year by central bank sales, forward sales by producers, and borrowed gold that hit the market ( gold was borrowed at 1 to 2%, sold for cash and th proceeds invested elsewhere ). The same that was done with Yen borrowings. Without all this extra supply of gold, the price would probably be $500. The Pre EMU CB european selling is over. The total gold loans may be 8 to 14,000 tonnes. 1998 production was 2529 tonnes. We know that some bullion houses are have massive gold loan exposure a la some S and L's ( bad loan exposure ) when that S hit the fan years ago. If gold takes off, some of these bullion banks or financial entities that have borrowed to much gold, will not be able to find such large amounts of gold in a short period of time. You could easily have a buying panic. The Fed and others know this. They had to bail out Long Term Capital of their gold short position in an off market transaction. I discuss this a great deal in my Cafe at letmetropolecafe.com. I just put up a Special Commentary that delves into this situation and some potentially very bullish market developments that we have uncovered. The shorts have to find new gold borrowers to keep the price down. They are running out of candidates and time. The jig should be about up. You are correct about the money supply. That is going to kick in. In that regard, I have reported to Le Metropole members that there is a bullish play on for the silver market. After the close on Friday, the Comex stocks went down another 500,000 oz. The premiums in India are very high at 11.3%. That indicates extreme supply tightness. I go into silver because it is moving higher while gold is moving lower. Last year in the Cafe, we said to look for clues that times will be a changing. Silver was one of our clues. The big boys are moving in. Silver first - gold next. The dollar is headed SOUTH. Gold is headed NORTH. All of our reasoning can be found at the James Joyce Table and in the James Joyce Library of past Midas du Metropole commentary. My guess is that silver should trade $9.78 by the end of the year and gold should reach $405. Have a nice weekend, Bill