Posted on 12/18/2002 9:53:28 AM PST by LSUfan
An anti-trust lawsuit filed today accuses Barrick Gold Corp., Toronto, and J.P. Morgan Chase & Co., New York City, of "unlawfully combining to actively manipulate the price of gold" and making (US) $2 billion in short-selling profits by suppressing the price of gold at the expense of individual investors.
(Excerpt) Read more at savegold.com ...
"None of the above, actually."
So I've wasted my time conversing with someone that is invested in NOTHING! Unbelievable...
No doubt a marketing ploy in my opinion, but it still will focus needed attention to some of the trading activities in the gold market and that can't be bad. Once in a while, you have to turn on the light just to see where the cock roaches are.
Richard W.
"Today was a sight to behold. Right from the get-go, you could tell gold was going to roar. The cabal tried to take down gold all night and morning, but it was obvious they were not going to succeed. Yesterday’s dramatic sell-off then became a positive as today’s early action showed the shorts to be in big trouble. Sure enough, once again the smart money buying crowd stuck it to The Gold Cartel on the close.
"The cabal has now lost their last line of defense, that being $340 resistance. For the last two days, they gave it all they had to try and take gold down. THEY WERE WHIPPED! It is important to note that we still do not have any gaps to fill on the downside. We still do not have that upside break-away gap, followed by a buying panic in the US. That could come any day now. Word was sent my way today that option books are blowing up because of the sharp move up in the gold price. There is no telling what the gold price could do on the upside. That $10, $20, $30 up day could be at hand! Collectively, the shorts are on the hook for some 15,000 tonnes of gold. Mine supply is only 2500 tonnes per year and shrinking. How are they going to pay the loans back? Where are they going to get the gold? Only one way: gold must rise hundreds of dollars per ounce. Then, the women and peasants of the world will bring their scrap gold in jewelry form to market. What fun! The dummkopf, arrogant western bullion bankers need to be bailed out by the peasants of the world. Couldn’t happen to a nicer bunch of guys."
This fellow is a trifle on the conspiracy side of life like Bob Chapman, but they both have made me money. I note that James Dines has been bullish for some time and came out with three new recommendations. All three of these men are interesting and easy to read, and Dines is a master wordsmith and I subscribe to him as much for his intellectual meanderings as for his financial advice. No one should buy gold or gold stocks without looking at a number of good advisers.
Because that's how markets, transparent or not, work.
The derivative market is non-tranparent (there are no reports on how the derivatives are structured).
Interesting. You sound like a guy complaining about a lack of transparency when a private individual sells a firearm to another private individual.
There are computer programs driving the buying and selling of derivatives, do you know what their buy and sell points are?
You seem to be claiming that $348 is a magic number for some reason. Do you actually know the buy and sell points? Or are you merely BSing? I merely noted that various people have CLAIMED that the magic doomsday price was just around the corner for three years now.
I get a wee bit skeptical when doomsday is predicted over and over, yet somehow never comes.
Someone put up money saying that the price of gold was going to increase. They will collect when it is profitable to do so--and the alleged target figure for said profitability has gone up nearly 25% in the past three years.
Most of the contracts demand delivery of physical gold.
Fine. Then the holder of the "long" position gets delivery of the gold, and he can then turn it around and sell it on the market.
The gold that has been "borrowed" (actually sold) has to be bought on the (transparent) market. Where are they going to buy it to deliver to the "longs."
Like I said, the "longs" will simply demand cash on the barrel. If the short-seller can't buy to cover, he's f***ed. BTW, this happens all the time in the securities market.
I seriously don't think that you know what ypu are talking about...
Well, I disagree with you. I do know what I am talking about...and you most assuredly do NOT.
Now, interest rate derivatives are another story. Watch out for that one when the bond market cracks up.
I have a very small amount of gold. But most of my precious metals investment is in copper-jacketed lead and brass.
That's what the lead and brass are for. However, the size of the gold market is so small, it is doubtful that a sharp rise in price would impact any large bank to the extent that they would fail. Even a sharp decline in the dollar that would be implied in a gold increase wouldn't fail the banks. In the short term, it would increase U.S. export competitiveness. In the long term, we all pay with inflation.
No, I'm not. You're demanding to know the details of private contracts--even as you claim to know those details.
Well yes and no. Not all that much true physical gold ever trades hands but there is a mountain of speculative paper derivatives out there that is all tied to the POG including our own currency indirectly. Huge loans have been made and every huger bets made in the gold market. Should be interesting to see who the winners and losers will be as the price moves up. I think that you will be surprised that even insurance companies like AIG have been playing in this "small" market.
Richard W.
Actually, Blanchard is asking to know the details. They are claiming that JPM and ABX (among others) sold more gold on paper than the market could handle with the intention of driving down prices. During this time ABX may have profited from the purchase of miners at fire sale prices (Homestake being one of them).
If it was illegal for the Hunt brothers to corner the silver market on the long side in 1979-80, then it should be illegal for bullion banks to do the same on the sell side.
Proving this is going to be difficult for Blanchard. Barrick's hedge book is public information though not entirely transparent. Blanchard will have to prove collusion with intent between JPM and other hedgers.
They sell gold forward that doesn't exist now, but will when they need to deliver because Barrick makes gold. The people they sell it to are well aware of this, so it is none of your concern.
This is why Barrick bought Homestake. They needed Homestake's production to get out from under the hedges. If I was a long-term Homestake holder, I'd want a piece of this litigation. Fortunately, I made a killing on my Homestake :-)
Gold production at most miners is declining due to the lack investment in new exploration. If I was Barrick's banker, I'd be seriously concerned as to whether they can meet these deliveries.
Tonight investors "see" gold going long and breaking the five year high without much difficulty!
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