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

To: Ahda who wrote (32991)	5/1/1999 5:21:00 PM
From: Alex	Respond to of 116791

But of course : - )

To: Ahda who wrote (32991)	5/1/1999 5:29:00 PM
From: Alex	Read Replies (1) \| Respond to of 116791

Gold statistics a little tarnished, say critics The Gold Fields Mineral Services' Gold Survey 1999 came in for a bit of a smelting from gold-market watchers, writes JULIE WALKER PAUL Walker, co-researcher and presenter of Gold Fields Mineral Services' Gold Survey 1999, started on the defensive when presenting the survey to a Johannesburg audience last week. Other gold-market watchers found fault with several of the survey's key aspects, such as central bank sales, investment offtake and hedging. Walker was on the back foot on two more counts: the purchase price of £195 a copy was more than many of the audience could justify, particularly members of the press, in spite of his reassurance that the price was well below production costs and still reasonably priced. The survey is supported by 20 corporate sponsors who were believed to have contributed $7 500 apiece, following the collapse of former owner Gold Fields of South Africa and the door being shown by Gold Fields Ltd. The London audience reportedly had to pay £48 just to hear the presentation while Standard Corporate & Merchant Bank's hosting of the Johannesburg bash turned out not to be such a free lunch after all: a fire in the adjacent room put paid to Walker's slide show. The survey begins on a negative note: "Gold's performance in 1998 can only be described as 'disappointing'." Jessica Cross of Internet-based research consultancy Virtual Gold Research takes issue with this: "It depends on what you were expecting. This was a year when Asia took a huge bite out of jewellery demand, dumped a mass of scrap, when central banks continued to privatise their assets through loans and sales, mine production rose 3%, bar-hoarding was at its lowest for 10 years, and almost all commodity prices slid steeply and pulled inflation down with them. "For gold to record a price fall of less than 12% looks more like a wrist-slap than a custodial sentence, especially as in some currencies its value went up," says Cross on www.virtual-gold.com. While Walker emphasised the movement of above-ground stocks, Virtual Gold questions the heavy figure for central bank sales, gross sales of 538 tons and net sales of 412 tons. "Absolutely no new evidence of big disposals has surfaced," says Cross. "The survey makes vague reference to the Chinese and Russian governments' buying domestic output in 1997 and selling it on to the local market last year. "But this is a simple misunderstanding of what the authorities are doing in these countries. Their reserve banks have first right of refusal on all gold, but seldom exercise it. Russia and China are acting like wholesalers, exercising right of first refusal because they have often extended credit to the miners. The bullion is held in the books but not necessarily taken into official reserves. "Even if it is, GFMS is double-counting subsequent sales because mine output for these countries goes straight into Gold 1999's supply/ demand table. Swaps should also be logged as a sale when initiated and a purchase when closed out, which the survey appears not to do." Walker says the market has come to expect net official-sector sales and that this has been factored into the price. Virtual Gold also challenges how, in a year memorable for weakness in gold demand, Gold 1999 claims investment offtake could leap from 153 tons in 1997 to 537 tons last year. While coin sales grew, 23 tons was hardly significant. "The really startling figure is 260 tons for investment demand in Europe and North America. Since 1997 is (plausibly) reported as a year of heavy disinvestment, this implies a turnaround of no less than 531 tons." GFMS's explanation - a swing from massive short-selling in 1997 to heavy short-covering in 1998 - is best taken with a fistful of salt. Walker gives four reasons for the short-covering theory: the global equity-market collapse had a net positive effect, dollar weakness helped, as did the collapse of hedge-fund Long Term Capital Management. Finally, there were hedge redemptions - another figure questioned by Virtual Gold. Gold 1999 reports a reduction in net hedging from 472 tons to 58 tons. "There were sizeable new hedges put on last year: a swing of 400 tons looks, shall we say, generous?" says Virtual Gold. Walker is not fazed. "We stand by our figures," he told the Johannesburg audience. "Our survey enhances transparency in the gold market but we have to collect data on a very confidential basis. There is an element of faith on the part of those who provide us with information. Nevertheless, we are subject to, and welcome, criticism." Not a Y2K apocalypse man, Walker does not expect millennium computer bugs to push gold higher. Nor does he subscribe to the conspiracy theory that the US Federal Reserve Bank buffers the gold price - a view being postulated by the Gold Anti-Trust Action group. Looking ahead, GFMS predicts gold will trade between $265 and $305/oz for the rest of the year. btimes.co.za

To: Ahda who wrote (32991)	5/2/1999 5:40:00 PM
From: Alex	Read Replies (1) \| Respond to of 116791

Japan's debt time bomb By AKIO OGAWA Special to Asahi Evening News The Ministry of Finance (MOF) predicts that the total debt of Japan's central and local governments will hit 600 trillion yen by the end of fiscal 1999, in March 2000. Any Japanese who has not been to Mars in the past few months knows this. What is not known is how to pay the huge debt, which amounts to almost eight times the size of the nation's 1999 budget. Many lawmakers have raised the question repeatedly since January at the plenary and committee debate sessions in both the Lower and Upper houses. During these sessions, Prime Minister Keizo Obuchi and Finance Minister Kiichi Miyazawa have repeatedly said, "When we get out of the current economic slump in a few years, we can stop floating bonds and start paying off the debt." Obuchi and Miyazawa have sought to leave the impression that economic growth of a few percentage points could erase the red figure in a matter of a few years. But many economists and MOF officials know this is just a joke. They know that such growth would bring only a trillion yen or less a year in added revenues. Despite this knowledge, they have remained silent about the nation's biggest taboo. Once the truth is out, they fear, the nation could be thrown into chaos, toppling a government or two. But the truth is out, finally. Heizo Takenaka, professor of economics at Keio University, has just broken the taboo in his latest book, "Keisei Saimin" (Statecraft and the rescue of the Japanese people), published by Diamondo-sha (1,600 yen). Consumption tax could skyrocket In the book the professor bluntly says, "The consumption tax must be raised to 14 percent outright from the current 5 percent or the nation's public works budget must be cut by 80 percent" to deal with the 600 trillion yen in debt. A 14 percent consumption tax would deal an unimaginable blow to the all-important consumer spending, triggering an economic disaster. We still remember that former prime minister Ryutaro Hashimoto raised the tax by 2 percent in April 1997 and threw the country into an ever-deepening economic quagmire. Japan's spending on public works projects totals 50 trillion yen a year and the past spending spree has played a key role in generating the debt. But an 80 percent cut would reduce the figure to a 10 trillion yen, forcing most of the country's 560,000 construction firms, small and large, into bankruptcy. If the construction industry crashes, the nation's economy could go bust. It is important to note that Takenaka put the estimates on the table at the Economic Strategy Council, a blue-ribbon advisory body set up by Obuchi in August 1998 to map out a blueprint for an economic revival for the 21st century. He served as a council member. We now know that the estimates were behind the nine-member council's final report, published in late February 1999. The report suggested raising the consumption tax but stopped short of stating by how much, for fear of pouring further cold water on the economy and starting a political firestorm. Readers will be in for a shock because Takenaka says his drastic theoretical proposals, apparently endorsed by his peers on the council and MOF officials, would only bring the nation's snowballing debts down to what he calls "primary balance" in 10 years--when Japan needs not to float new bonds any longer. Japan would still be facing a mountain of debt equal to 3 percent of the GDP. Takenaka's book is terrifying enough to send a cold shiver down anyone's spine. But Akira Moriki, an economic commentator, says that a consumption tax higher than 20 percent is necessary to bring the nation's debt into primary balance. When you read Moriki's latest book, "Shohizei ga 20 percent wo koe, Ichidoru ga 200 yen to Naru Koredake no Riyu" (The many reasons why the consumption tax could top 20 percent and the dollar could rise to 200 yen), you would notice that Takenaka might have overlooked or failed to mention a figure or two. In his book, published by Daini Kaientai (1,700 yen), Moriki notes that the nation's debt will not total just 600 trillion yen by next March, but will top 689.3 trillion yen. The 600-trillion yen figure, now a household word, does not include what Moriki calls "hidden debt," refunding bonds and other borrowed money. The "hidden debt" refers to a variety of contributions the central government is legally obliged to pay into the nation's health care, pension and other programs but has failed to do so. "Refunding bonds" mean new bonds issued to raise funds to pay back matured bonds. Such funding bonds add more debt, ballooning the nation's debt faster than projected by MOF. Moriki warns that the consumption tax could be raised to as high as 25 percent, water supply fees and public housing rents could be raised, garbage collection could be charged for, free health checks for pregnant mothers and infants could be abolished and free medical services for the aged could also go. "The inflation and raised taxes would hit every facet of our daily life. The government might freeze postal savings. Pension payments for anyone 40 years old or younger now might evaporate by the time they retire," Moriki says. And a senior analyst working for a research institute attached to a major bank told this writer: "We have just figured the consumption tax must be raised to 18 percent to tame the rampaging debt." Japan's biggest problem--or economic scandal--is so outrageous that it appears that no politician or ordinary citizen dares confront the reality, wishing it would go away. It will not, if you are to believe these books.