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>From: lepatron@xxxxxxxxxxxxxxxxxxx
>To: trdoptions@xxxxxxxxxxx
>Subject: Jon E. Dougherty - What's Going on in the Gold Market?
>Date: Wed, 28 Jul 1999 13:08:29 -0400
>
>Le Metropole members,
>
>Thought you might like to read this news story. Yes,
>what is really going on in the market and our side of
>the story is coming to light. Thank you Jon E.
>Dougherty.
>
>What's Going on in the Gold Market?
>
>News/Current Events Opinion (Published) Keywords:
>GOLD CONSPIRACY
>Source: WorldNet Daily
>Published: 28 Jul 99 Author: Jon E. Dougherty
>Posted on 07/28/1999 08:32:57 PDT by Rule of Law
>
>Veteran traders and gold mining companies say the
>price of gold is being artificially held down to prevent
>huge losses by key lending institutions.
>
>Chairmen and chief executives at Canada's Placer Dome,
>U.S. miners Newmont Gold and Homestake Mining, South
>Africans Anglogold and Gold Fields and Ghana's Ashanti
>Goldfields have been seeking answers primarily from
>British Prime Minister Tony Blair on the Bank of
>England's May 7 decision to sell over half of the
>country's 750 tons of gold reserves.
>
>They charge that the sales were prompted by the desire
>to bail out lending firms running short positions in
>gold, but so far neither Blair nor anyone in the
>Clinton administration -- which supported the Bank
>of England's decision -- is addressing the questions.
>
>Worse, the International Monetary Fund is contemplating
>a British-style sell-out that will, say critics of the
>plan, further erode the trading value of gold, despite
>gold's traditional economic prowess. Great Britain and
>the U.S. also support the IMF sell-off plan, which is
>ostensibly being contemplated to raise money to cover
>the debt of poor nations that have not been able to
>repay the IMF.
>
>While few experts are openly charging U.S. and British
>leaders with a conspiracy, they do say these and
>other actions have resulted in a 10 percent fall in
>gold prices since spring. And because of the manner
>in which the sales have been handled, they amount to
>de facto manipulation of the gold market at a time
>when prices don't equal demand.
>
>Last year gold production amounted to some 2,550
>tons but gold borrowings were over three times as
>high at around 8,000 tons. While production has
>remained steady, short-term borrowing on gold has
>increased since then.
>
>Critics say at issue is the practice of key lending
>institutions allowing gold bullion dealers to borrow
>inflated amounts of gold, which they then sell onto
>the market at a profit. If prices rise unexpectedly
>or before dealers sell the borrowed gold, both lender
>and borrower stand to lose billions of dollars.
>That's because deals are being made with gold that
>has not yet been mined out of the ground and, if
>prices remain low, may never be.
>
>Earlier this year, after months of depressed prices,
>gold began making a comeback and reached nearly $300
>an ounce. But when the Bank of England announced a
>plan to sell most of Great Britain's gold reserves,
>prices froze and then plummeted to their current level
>-- about $250 an ounce.
>
>The pre-sale announcement by the British bank was
>seen as irregular and "set off alarm bells around
>the world," according to one source.
>
>"No other central bank has announced a gold sale
>prior to its completion in more than 20 years,"
>wrote Gold Anti-Trust Action Committee Chairman
>Bill Murphy in a letter to Sen. Phil Gramm, R-Texas,
>July 20. "And the Bank of England's announcement was
>made as the gold price was storming past a key gold
>loan borrowing point and interest in the gold market
>was finally rising again."
>
>Murphy also wrote, "Because of the way the Bank of
>England sale was announced, we also suspect that
>the current administration (perhaps the Federal
>Reserve or U.S. Treasury) may be active in the gold
>market through a trading account at Goldman Sachs. ...
>Therefore," he added, "(they) may have some role in
>the orchestration of a lower gold price."
>
>Britain's Prime Minister Blair has defended his
>country's gold sale, saying it was necessary
>because the "price of gold has been falling for
>over two years." He defended it as a "prudent
>measure" designed to "save the taxpayers" from
>suffering huge losses.
>
>Murphy, in his letter to Sen. Gramm, refuted
>Blair's explanation, adding that if England wanted
>to "get the best deal" for British taxpayers they
>would not have announced the sale in advance -- a
>move that was sure to make the price of gold fall.
>
>"The best deal the Bank of England could have gotten
>would have been $30-$40 more per ounce by carrying out
>the sale as all the other major countries have done
>for 20 years," he said.
>
>Ironically, Murphy said, no one is taking direct
>responsibility for the Bank of England's plan to sell
>the country's gold reserves. Murphy noted in his
>letter that Blair, the Bank of England, and the n
>ation's agency equivalent to the U.S. Treasury
>Department have all indicated the idea did not
>originate with them.
>
>Meanwhile the U.S. Mint reported that gold sales
>continued to be brisk in 1999, with more than 67
>percent of the maximum mintage of proof gold
>Eagles already sold to the public since April 30.
>
>"Total sales of the proof gold Eagles are up
>16 percent over the first 12 weeks of the program
>last year," said Mint Director Philip N. Diehl,
>"with sales of the one ounce and quarter ounce coins
>up 45 percent and 33 percent, respectively."
>
>Diehl said, "These are the highest totals at this
>stage of the program since 1996, so we want to let
>customers know that the strong early sales we
>announced in mid-June are continuing at a very high pace."
>
>A spokesman for the mint declined to comment about
>why the price of gold continues to be low despite the
>increased demand.
>
>"We're a government agency and because of that I can't
>comment on that," he told WorldNetDaily.
>
>Robby Noel, a spokesman for Patriot Trading Group,
>a U.S. gold wholesaler, said the reason for the
>proposed IMF sell-off is dubious at best.
>
>"The IMF said they want to sell their gold reserves
>to relieve the debts of poor countries," he said.
>"If that's the case, then they're going about it all
>wrong because many African countries will be hit the
>hardest if they do, and supposedly those are the
>countries they are claiming to be trying to help."
>
>Noel said many Africans, especially in South Africa,
>face lay-offs in the tens of thousands if the IMF
>sells their gold. The sell-off would likely cause
>gold prices to fall even further and thus, force
>mining companies to lay off more workers in order
>to remain viable. Currently, he said, gold is
>selling for less money per ounce than it takes to
>actually mine it out of the ground.
>
>As to why the IMF would consider such a move that is
>obviously destined to hurt, rather than help, the
>economies they are allegedly trying to save, Noel
>had no answer.
>
>"Maybe it's because gold is honest money and these
>are immoral men," he told WorldNetDaily. "Outside of
>that, I have no idea why they (Britain and the IMF)
>would do what they've done or are planning to do."
>
>"I do believe when 'the panic' hits there will l
>ikely be little physical gold to go around," he added.
>
>All the best,
>
>Bill Murphy
>Le Patron
>http://www.lemetropolecafe.com
>
>
>
>
>
>
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