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

To: PaulM who wrote (28809)	2/23/1999 9:02:00 AM
From: long-gone	Respond to of 116856

<<The 1997 Federal Reserve Piece that advocated Govt Gold Mobilization "...governments can loan out all their remaining gold in each period. In the future when all gold now owned by private agents, whether above or below ground, has been used, governments sell in every period whatever gold is necessary to make the price be whatever it would have been if they had sold all their gold instantly. The quantity of gold available for private uses are the same...as with immediate sale. However, there is an important difference.....governments relinquish title to the gold in the future and then only gradually. Therefore, to the extent that government uses can be satisfied by owning gold but not physically possessing it, most if not all of the gains associate with maximizing welfare for private uses can be obtained with little or no reduction in welfare from government uses until sometime in the future." >> Hey Paul, look at page 19. Looks like this was only a "working paper" intended to propose this very idea of gold leasing and sales to (their words)"achieve the greatest good from these assets". From here, we can not know how much of this idea has been used. I'm betting the big boyz at LTCM were let in on this idea and started shorting. Bet Central Bankers never "planned" for POG to get this low, it was only the result of the Asain problems. Problem was LTCM got caught on wrong side of a currency/bond bet and bounce of POG at the same time. From what I read, sounds like if gold ever goes above around 315 whole plan would come apart! and all the powers of heaven & earth could not hold it back. This Y2k demand must be pushing whole programe near edge of the window of control! If we could just get an unknown deep pockets to jump in and take delivery of 20000 oz in one day it would crack the system!

To: PaulM who wrote (28809)	2/23/1999 2:44:00 PM
From: Alex	Respond to of 116856

Excellent read Paul. Thanks.................. Weak Yen Causing New Problems TOKYO (Nikkei)--The accelerating depreciation of the yen since the Group of Seven finance ministers and central bank governors convened in Bonn on Feb. 20, is causing a new problem as reflected by no clear reference to foreign exchange rates. A key question in the currency market is whether the U.S. is accepting a weak yen. Eisuke Sakakibara, Vice Finance Minister for International Affairs, merely quoted U.S. Deputy Treasury Secretary Lawrence Summers in saying that he had no comment on the matter. Sakakibara did tell the Nihon Keizai Shimbun on Feb. 22, however, that while the G-7 meeting did not address exchange rates, the yen is weakening as a result of Japan's easy money policy. With the yen falling to the 120 level against the dollar, Sakakibara showed little intention to steer the yen down further, probably because of his view that the yen will strengthen over the mid-term, when the nation's economy picks up this summer. Still, Summers' "no comment" stance offers a better indication of the U.S. Treasury Department's delicate position toward a weak yen. Now that the U.S. current account deficit is expanding, the Treasury Department cannot openly welcome the yen's depreciation, for fear of congressional criticism. At the same time, however, the U.S. has no choice but to support Japan's easy money policy aimed at overcoming deflation. As the policy widens the difference of interest rates between Japan and the U.S., Washington also supports it for the sake of smoothing the flow of funds into the U.S. Still, an increase of cash flow into the U.S. will further contribute to the yen's depreciation. Summers' "no comment" reflects the U.S. government's dilemma: it is not in a position to support an accelerated fall in the yen's value while calling for Japan to ease its monetary policy further. Yet, as long as the currency market keeps focusing attention on this issue, the depreciation of the yen as a result of credit easing will accelerate of its own accord. There is no guarantee that the Bank of Japan's easing of credit will end only in a lower target rate for unsecured overnight call loans. This is to say that behind debates on lax credit and a weak yen lie strong U.S. and European anxiety over deflationary pressures facing Japan. In essence, the market regards the outcome of the latest G-7 meeting as accepting the weak yen in light of Japan's credit easing policies. But if the market considers that the G-7 will tolerate the yen's depreciation weaker than 125 against the dollar, Summers will likely feel more frustrated when he visits Japan later this week. nni.nikkei.co.jp