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

To: Bill Murphy who wrote (3254)	1/30/1999 6:19:00 PM
From: baystock	Read Replies (1) \| Respond to of 81019

Bill, It seems Frank Venerosa doesn't buy into the gold conspiracy theories. Exerpt only here, more at the website: venerosogold.com The Conspiracy Theory We, along with many others, are very surprised by the current low gold price. Many gold market observers faced with seemingly impenetrable resistance in the gold market at $300, now believe that there is a conspiracy by central banks to hold the gold price down. Federal Reserve Chairman Alan Greenspan made a statement before a congressional hearing on regulating OTC derivatives in early 1998. …"Nor can private counter-parties restrict supplies of gold, another commodity whose derivatives are often traded over the counter, where central banks stand ready to lease gold in increasing quantities should the price rise."… We believe Mr. Greenspan made this statement simply to indicate that central banks could act to prevent a Hunt-type effort to manipulate the gold price---not to indicate that the official sector would intervene to control the price of gold. However, many gold commentators are citing this quote to support their belief that the official sector is holding the gold price down. We believe that these conspiratorial theories are being fostered through commentaries on some popular Internet websites. We are short of explanations for the current low gold price. Nonetheless, we seriously doubt these conspiratorial theories. From our conversations with central bankers, we believe that the European central banks would like to see a higher price for the substantial gold they hold and would not be part of any official sector intervention to hold the gold price down. It is hard to see how the Fed, for example, could intervene if the French or Germans did not approve. It is also hard to see how the Fed would act clandestinely on its own with its own gold reserves without informing the US legislature and body politic. Also, with deflation a current threat, it is hard to see why the Fed or other central banks would want to hold the gold price at so low a level in the current environment. Some conspiracy theorists on the web argue that the central banks are holding the gold price down by lending gold. Lending gold requires a borrower who is willing to go short at $290 gold. Producers, bullion bankers and hedge funds may be willing to do so at $290, but if they are doing so it is them and not the central banks that are holding the gold price down. Ram