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

To: Ken Benes who wrote (34060)	5/17/1999 6:43:00 PM
From: Enigma	Read Replies (1) \| Respond to of 116791

I don't think the producers are the enemies of the gold bugs as you put it. The bank lends the gold - but holds collateral against the producer's reserves. So in a sense the gold is still there - not the same gold obviously - but the bank has a call on physical gold of the producer in future - if it has to collect. I expect that in practice the loans are continuously rolled over. Are you sure that oil producers don't resort to the futures market too? I think they do, at least partially - even the natural gas futures market is used by gas producers. d

To: Ken Benes who wrote (34060)	5/17/1999 7:21:00 PM
From: Alex	Read Replies (1) \| Respond to of 116791

Hi Ken. The post you refer to was just a cut from the article 'Wither Gold' by Antal E. Fekete. To the best of my knowledge he has no association with GATA as the article was written in 1996, long before GATA was formed. I think that this gentleman has a fairly good grasp of modern financial theory as this article was the winner of the 1996 International Currency Prize.

To: Ken Benes who wrote (34060)	5/18/1999 8:52:00 AM
From: donald martin	Respond to of 116791

<<Gata represents a bunch of archane gold bugs who cannot understand modern financial theory that is responsible for gold losing its lustre>> Or are too impatient to see the "modern financial theory" follow the path of so many modern financial theories of the past? <<Gata does not have the resources to prevail nor a sympathetic audience who will be outraged by the Gata exposures>> Indeed. The audience has benefited mightily by gold losing its lustre (ballooned financial asset portfolios and cheap mortgages). They're also apt to be mightily pixxed off when gold rebounds. If GATA is successful, GATA2 will be a class action against all the parties who are long. And GATA2 will have a sympathetic audience. <<Why don't the oil producers sell the oil in the ground forward. Quite simply, they have no one to borrow it from to sell today what they will get out of the ground tomorrow.>> Simpler still. Storage costs and that gold is not a consumed resource. By the way, some producers do hedge their production with futures contracts...but not to the degree that mining outfits do. On the other hand, a mining company needs a lot more capital up front to bring a property into production. That's not the case with the oils.