-> SNETNEWS Mailing List Carolyn Hart wrote: > > 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, US. 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 > nation'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 likely be little physical > gold to go around," he added. ------------------------------------------------------------------------ GET WHAT YOU DESERVE! A NextCard Platinum VISA: DOUBLE Rewards points, NO annual fee & rates as low as 9.9% FIXED APR. Apply online today! http://clickhere.egroups.com/click/606 For subscription info, go to: http://www.egroups.com/list/piml -> Send "subscribe snetnews " to [EMAIL PROTECTED] -> Posted by: [EMAIL PROTECTED] (Carolyn Hart)
