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Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: GTC Trader who wrote (1249)	6/5/1999 12:53:00 PM
From: Exsrch	Respond to of 3558

Happy Bids, Ken Benes and Ron Everest: My take on the manipulation of POG is as follows: 1. There is no question that manipulation happens and the parties you have discussed are involved. I would say they participate in a virtuous relationship rather than collude; however, the end result is still the same: a lower gold spot. 2. Because the parties have their different motives and different outcomes in mind (producers want cantango, Ibanks want fees and carry forward profits etc) I would not call it a conspiracy; however, it is the CB motives that are most interesting. Let me discuss point #2. CB is made of bankers and not economists. They want to create wealth and sustain that value creation. Hence, I believe there main concern is inflation control. This is quite a challenge looking at the CPI from a veriable (the math) stand point. CPI=100's variables. The interesting part of that is retail spending is sky high (fueled by consumer debt), housing start is high etc. Most good economic news point to higher inflation. Even the good new of higher employment and higher retail spending in my view are bad news because of the inflation effect. Why? because it relies on low commodities prices such as fuel (transportation costs) and bascis commodities (copper, coal etc). And commodities prices have historically been led by Gold and hence the imperative for CB (especially Greenspan) to control inflation through gold price manipulation. The killer part is they have the will and the means to lease/lend gold to keep it low in a stable system (partial diff equations anyone?); however, if we became unstable (and you believe a part of my argument) CB will lose control and we might suffer the pains Happy speak of, Maybe (I don't think it would be that bad though). Cheers, Exsrch