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Date: Wed, 07 Jun 2000 17:47:20 -0600
Subject: MINI MIDAS SPECIAL - "Gold Derivative Banking Crisis" Document Circulating the Globe at a Furious Pace
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Le Metropole Members,
MINI MIDAS SPECIAL
Deutsche Bank, along with some help from Goldman
Sachs, bashed gold early today taking it down almost
$6, but the funds came in as buyers, taking it back
up late in the day. August gold finished at $290,
only down $1.80. Good ole $290 again. That is the
price the manipulators have been defending for a
couple of years now. They are at it again.
Word to me was that some hedge funds were buying. This
is very important news. I received a call today from
Europe that the "Gold Derivative Banking Crisis"
document is being distributed around the world at a
furious pace and it is going to the highest levels of the banking world. This is not supposition. One of the most
prominent bankers in Europe has ALREADY received
4 copies and "the document" was only made public
5 days ago.
A futures broker was also called by a well known
and signficant futures trader and queried the broker,
"have you seen this report that is SO bullish for the
gold price?"
If the GATA document (which can be obtained for
free at www.GATA.org) is circulating to this degree
and to the right people, then it is only a matter
of time before the big money crowd starts buying
gold in earnest.
The document is a mouthful to digest. But once the
investment community realizes that the bullion banks
are in a bind - big time - investors will make their
move to buy gold. Historically, when banks - be it
central or otherwise - have screwed up to this degree
- the Soros' of the world have taken them on.
They will most likely do so again. After all, the
downside in gold is $20 to $30. The upside on this
trade is $300 to $600. For that matter, just pick
a number.
The Office of the Controller of the Currency gold
derivative numbers for Q1 were released yesterday.
They show another big derivative build up as the new
total of notional off-balance-sheet gold derivative
contracts has risen to $95.5 billion from $87.6
billion. The big increase came at Chase Bank. I am
sure Reg Howe, Mr. Derivative himself, is doing a
report on this, so I will leave the details for
him to present to you.
What does this all mean? It is simple. There is too
much gold being consumed at too cheap a price. There
is a DEARTH of PHYSICAL GOLD. Only PAPER gold is
holding down the price. The bullion banks, their clients
and heavily hedged gold producers have an exposure
that is frightening. Once that exposure is understood
by serious money types, they will buy gold. CHECKMATE
for the shorts as I mentioned yesterday.
On a less dramatic note, crude oil roared back today
after being down $1 to close up 20 cents on the day
at $29.95 per barrel. The price of oil is headed up
as is the price of gold.
The dollar was weak all day too as it sank to 106.16.
Firm oil price, a soft dollar and little physical
gold around to meet current demand. What a combination!
Thanks so much to so many of you out there that have
been behind GATA, spreading the word on the building
crisis in the gold market and sending the GATA document
all over the world.
The Gold Anti-Trust Action Committee is trying to find
out what the gold leaving the New York Fed is all
about and why it is being categorized in the trade data.
A GATA committee member is doing yoeman work contacting
the Customs people, the Commerce Department, the Census
Bureau and the New York Fed. I thought you might like
to see some of the kind of repartee going on behind
the scenes:
Bill, Reg, Chris -I just talked to a John Kohler at the
Foreign Fiduciary and Financial Service Staff of the
NY Fed. This is the gist of part of our conversation:
"Do you not handle the paperwork for the gold
transactions in and out of the Vault?"
"I can't answer everything for reasons of security..."
"Can't you tell me your own responsibilities or the responsibilities of your office? Do you not handle
the paperwork when a foreign government instructs
the Fed to physically transfer its gold to a dealer?"
"Yes."
"What Customs paperwork do you fill out?"
"None."
"Are you aware that once demonetized this is an import and should be declared as such?"
Long silence.
"Or if not demonetized, debited against current account?"
"I can't tell you about our accounts for reasons
of security."
"I'm not asking about accounts, I'm asking about
accounting! That's not security! Aren't you aware
that there is a separate category in Customs for
monetary gold?"
Pause. "Yes."
"And are you declaring such to Customs?"
"No."
"Why?"
At which point Mr. Kohler excused himself, said
other personnel were involved, and referred me to Susan McLaughlin, the staff director.
Stay tuned...
W
Report on phone conversation w/Ms. Susan McLaughlin:
She knows of no Customs forms that need be filed when
the Fed transfers gold. She thinks it is the
responsibility of someone else, either someone at the
Fed or else the recipient's responsibility. She has
been on the job less than two years and has no idea
who at the Fed would be responsible and did not want
to help me further.
I had to pull my trump card, that "I am having dinner
with my ex-professor, the Fed Governor, next week."
Ms. McLaughlin has now received a written inquiry
similar to the one I sent Ms. Boney yesterday and
I think she will pursue the matter now in a timely
fashion.
W
It ought to be quite the summer for gold!
Midas
Le Metropole Cafe
All the best,
Bill Murphy
Le Patron
www.LeMetropoleCafe.com
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