Die Bullion-Banks als Käufer des physischen Goldes?

verfasst von black elk, 06.06.2001, 15:53

So,,,, the only reasonable, legal reason for the banks to create a world wide gold lending structure was to grow a paper facade that the real gold buying, Another spoke of, could hide in. All perfectly legal, but very political. Again, I point to Another's long ago post that said;"the reason gold prices are falling is because so many people are buying it". Ha! Ha! That one was greeted with total disbelief and ridicule. But, boy a lot of money was lost by people that turned from that message.

Now, back to my post:

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In the middle of all this new paper trading environment, people didn't notice what was happening. Way back when CB lending was just beginning, some smart people starting taking just a little bit of the action. Besides being big buyers of CB gold sold outright, they were also buying some of the borrowed gold. The same gold that was lent into the market by the CBs and other big players. You know, the gold that's borrowed, sold to create a pot of money. Then that money draws interest until it's used to buy the new mined gold and replace the loaned stuff. The same process that also makes the gold carry trade in our currency markets.

Well, that real gold off take, done by these major gold advocates, was not all they they took (smile).

Now,,,, a lot of these people started thinking."We already have a lot of gold and our demands in the decade prior to EMU may drive the market way up. So, why not help the CB's purpose (and ours) by always bidding low at outright sales. And because our money is tied up in gold, drawing no interest, why not play the CB game for them? We'll take some of our buying money and use it to create the cash pot for the BBs,,,, for use in their gold lending deals. They can skip the borrowing and sale of gold part and just commit our money to pay for the new mined gold. Drawing the standard few percent in return. The mines don't need to know that no gold was sold. Further, the BBs will need to hedge a fall in price to protect themselves in the deal. In doing so the public will see the derivatives price of gold fall, just as if some was sold.

Note: The BBs (in this small niche of deals) must only protect their interest from a falling market because that is the only function that would threaten the mine's future repayment of gold,,,,, a to low gold price. If their collective actions did drive the paper trading of gold to the floor, killing 90% of the industry's ability to continue operation, their profits from their paper hedge could at least cover the liability. Yet, conversely, any rise in price would be no threat to this particular deal structure.

So,,,,,,in the middle of all the gold carry trade, naked shorting, gold sales from regular investors and, in general, a blizzard of paper gold trading,,,,,, some major players were building real gold buys and not driving the markets as they did it. The success of this operation created the dynamic that allowed physical gold to be purchased off the radar screen and the flow of oil to continue. Once again, no manipulation outside our standard paper arena! As Another was oh so fond of saying:"gold and oil will never flow in the same direction".


Section 2 -- Lining up the Gold to Unwind the Carry Trade

I consider the above paragraph to be fairly well established information. Now, I will speculate for a moment. If I were the bullion bankers and was in this situation, I would want to get my hands on a tremendous amount of physical gold at cheap prices. As far as I know, only the central banks and mining companies have large amounts of physical gold. In the case of the mining companies, it is still in the ground. I will assume here that the central banks would be very reluctant to let the bullion banks default. It would show how stupid or corrupt the central bankers are and it might be a big enough scandal to change the outcome of some elections. Ok, so this means that I have to convince the mining companies to sell me all the gold they produce for the next several years at prices close to what they are currently. So, how would one go about convincing the mining companies to sell their future production? Youíd either have to convince them that the price of gold was going to stay low for the period of time for which you wanted them to sell you the production or you would have to coerce them into selling future production. To accomplish this, you would have to convince them that there was a large supply of gold that was going to be dumped on the market. As stated above, the only other large holder of gold is the central banks. So, you have to convince the central banks to drive down the price of gold and act like they are ready to dump much more gold.

So, the question then is how to separate a central banker and his gold. Simple, create a potential crisis of a magnitude that it will force him to sell gold to prevent it. This is easily done by simply writing a huge gold call options (or surrogates thereof). Then, if the price of gold rises, the Bullion banks will fail and probably take the financial system with them. This compels the central banks to cap the price of gold at a level that less than the cost of production for many mines. This forces those mines to hedge or go bankrupt. The Bullion Banks can then acquire the forward production at prices near the cost of production, or to acquire the bankrupt mine. What is even better is that hedging will help hold down the price and force other mining companies to hedge.



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gesamter Thread:

• Die Bullion-Banks als Käufer des physischen Goldes? - black elk, 06.06.2001, 15:53
  • Re: Die Bullion-Banks als Käufer des physischen Goldes? - black elk, 06.06.2001, 16:20
    • Und darauf kommt es ja schließlich an.. - black elk, 06.06.2001, 16:28