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

To: Mark Bartlett who wrote (28878)	2/23/1999 9:36:00 PM
From: Alex	Respond to of 116912

IT WILL BE SHOWN IN COURT WHERE THE BUCK STOPS The renowned gold analysts Veneroso Associates (www.venerosogold.com/essays.htm) declared in an Executive Summary mid-January, a week or so before Chris Powell's Invitation to a Lawsuit: "The fact that (the price of gold) meets repeated impenetrable resistance at $300 has set off speculation that the official sector is holding the gold price down. We disagree." Veneroso Associates admit that the price weakness is "perplexing", but, "The big European central banks would like to see a higher price on their substantial gold holdings. It seems unlikely the US would act alone to 'cap' the price of gold". The Executive Summary goes on to repeat again and again that "there are gold observers who believe that there is a conspiracy by central banks to hold the gold price down." But no, Veneroso insists, leave the central banks out of it. Federal Reserve Chairman Alan Greenspan's famous statement that " central banks stand ready to lease gold in increasing quantities should the price rise," is noted and dismissed with, "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, Veneroso want us to understand that they are aware that there is SOMETHING GOING ON; because also, again and again, one reads, "We are short of explanations for the current low gold price." And finally it is asked, in underlined, bold: ARE THE BULLION BANKS ADDING TO SHORT POSITIONS? And the question is immediately answered with: "We have suggested in recent months that there may have been an increase in bullion bank short positions, which may explain some of the weakness in the gold price." The collusion GATA wants to present to the world through the U.S. courts is a bullion dealers' collusion at base, with possible, if not probable links to the FRB and Treasury Department. And Venoroso Associates know it – obviously know it. For having asked and sort of answered the big question they relax into being right properly informative: "Goldman Sachs is the bullion banker most frequently associated with this rumored transaction," they write. "Goldman has also been the most featured seller on all rallies since the LTCM crisis in September. Lastly, Goldman has been extremely aggressive in offering large bullion banking facilities to producers on very liberal terms, even though banks in general have been more risk averse since the crisis of the late summer." The Veneroso Executive Summary goes on to spell it out in even more detail: "Because of Fed involvement in the LTCM bailout and because Treasury Secretary Robert Rubin was previously with Goldman, Goldman's association with the LTCM bailout and its role as a conspicuous seller in the gold market has fueled recent conspiracy theories that the Fed and Treasury are working to 'cap' the gold price in order to protect hedge fund, broker dealer and bank exposures from a rising gold price. "Since the turmoil of last summer, there have been firings of bullion dealers at several banks and broker dealers. These institutions were all heavily involved in encouraging hedge funds to put on leveraged positions that were too large for their markets. It is rumored that there are newly uncovered problems at some of these banks and broker dealers. We hear that these institutions may have large proprietary short positions in gold in the form of carry trades and option positions. It is our guess that several of these institutions do have large short side exposures that they have added to. It is possible that allegations that they are adding to these positions to 'protect' these positions have some merit. It is also possible that they are acting in collusion to keep the gold price down." And here the Executive Summary gets really interesting: "Paul Krugman of MIT, who has no axe to grind, has reported that some hedge funds told the Australian officials that they and several large banks were colluding last summer to break the currencies of Australia, Canada and several Asian countries." Paul Krugman is quoted: "…some people from the hedge funds actually told the Australians, in effect, that resistance [against an aggressive bear attack on the A-dollar] was futile---that they were only a small piece of a coordinated play against Australia, New Zealand, South Africa, and Canada---not to mention Hong Kong, Japan, and China." (The original appears in italics for emphasis). So what do Veneroso Associates make of that? Well, they write, "We do not know exactly what to make of all the above rumors and allegations. However, without revealing all of our inputs, we have some evidence that the official sector, rather than orchestrating such activities, is not even fully aware of these activities." Beautiful. Great. We understand. Veneroso Associates would have the buck stop at Wall Street, not Washington. But the beauty of a well-presented lawsuit is that the buck stops where it must. So what will the court, and public opinion, make of Red Baron's researches showing how Goldman Sachs turned from bull to bear after Robert Rubin became Secretary of the US Treasury? Few will accept that it is just Goldman Sachs and the other investment houses in the "Counterparty Risk Management Group" vs Gold. No, they will agree with the heading to Red Baron's essay posted on Friday: FRB AND GOLDMAN SACHS Vs GOLD. 24 February 1999 Boudewijn Wegerif Project Leader, Monetary Studies Programme - A Research Project of VawdingeBy Folkhogskola. monetarystudies@hotmail.com Postal Address: Idaberg, S-153 92 Hölö, Sweden. Tel: +46-(0)8-551.57841. Vice-Chairman GATA (Gold Anti-Trust Action) gold-eagle.com