- Ich bitte um Diskussion! - Gold - Talleyrand, 23.06.2001, 15:52
- Re: Bitteschön - R.Deutsch, 23.06.2001, 17:26
- hielft Dir das weiter.... - Pastre, 23.06.2001, 19:13
- Re: Ich bitte um Diskussion! - Gold - Harry-2, 24.06.2001, 21:27
Re: Bitteschön
Financial Times
The Long View: That old-time religion
By Barry Riley
June 23, 2001
That old-time religion
The setting sun was shining warmly, but it wasn't
a very good omen as I strolled one evening this week
into the so-called"bugs' bash", the once famous, but
these days sadly under-attended, midsummer barbecue
of the British United Gold Society. It is my own
fault: if I am foolish enough to attend esoteric
events I am bound to run the risk of bumping into
my old adversary Fringe Freddie.
Sure enough, there he was, glass of champagne in
hand, advancing towards me. I looked around desperately,
but was hemmed in by the promotional stall for a
gold-mining stocks website on one side and the PR
advisers of the World Gold Council on the other.
He wore a yellow metal badge proclaiming:"Bring
back the gold standard." There was no escape.
"Are you still punting on gold, Freddie?" I
opened provocatively."It must be 18 months since
we last met, and you don't normally back losers
for that length of time. Gold, after all, came
within a whisker of a 22-year low when it sank
to $256 an ounce in April, and it has not recovered
very much."
Freddie grinned, revealing a new gold tooth."Like
nearly all the rest, you've been deceived by the
dollar propagandists, old boy," he responded."Over
the past 18 months the bullion price has risen
against the yen and the euro, not to mention the
pound sterling. Oh, and it's easily beaten the main
stock market indices, too.
"Not bad, eh? And it's only the beginning. Several
attempts at an upside breakout, the latest of which
took the price up 11 per cent, have been smothered
by intervention. But the anti-gold conspiracy
organised by the US government is running out of
time and metal. A big price upsurge, maybe a doubling,
is just around the corner. Just look at the mining
stocks: your own FT Gold Mines Index is up 25 per
cent since April."
I replied that I had heard the gold conspiracy
stories time and time again. But the gold bugs were
trying to create a mystery where there wasn't one.
Mining output was rising steadily, thanks to
improvements in technology, and the price was
being driven down. Gold was a relic that was simply
out of date.
No rational argument has any chance against a
fervent conspiracy theorist, however. Freddie's
eyes began to gleam, in a manner normally triggered
by a major crop failure and the mouthwatering
prospect of a global famine. The immediate object
of his attention, though, was the yellow metal.
"The signs are all there, old chap," he hissed.
"Official lending of gold by the central banks has
been much more than the 5,000 tonnes they admit.
The recent jump in the gold lease rate shows that
some of the lending central banks have backed off,
because they worry about running out of bullion.
Meanwhile the Americans are desperately printing
dollars to stop their economy diving into a
recession. Gold is the only place left to go."
I admitted that I'd had my curiosity aroused by
the gold"carry trade", the manoeuvre in which
big banks have borrowed gold at very low lease
rates and invested the proceeds in bonds, making
a big running profit. But the profit is destroyed,
and could be turned into a massive loss, if the
bullion price rises sharply. Hence the allegations
of price manipulation.
But I pointed out that a professor at the London
Business School, Anthony Neuberger, was hired by
the World Gold Council to investigate whether
activity in derivatives was seriously depressing
the gold price. Last month he reported that the
effect was small. An effective extra supply of
4,000 tonnes may have been generated during the
1990s, but that compared with an existing global
hoard of some 140,000 tonnes.
"Be honest," retorted Freddie."You've only read
the spin doctors' press release and not the full
120-page report. The professor was required to
accept the bogus official statistics as accurate.
Even so, he has confirmed that the lending market
is very fragile, and horribly vulnerable to a
serious squeeze. Watch this space."
Instead I looked optimistically towards the buffet
table, where the menu was advertised as ingots of
golden trout and 22-carrot salad. But the charcoal
barbecues seemed to be causing problems, so there
was no easy escape from the party pest.
"All right, I admit there are some interesting
parallels with what happened to the London Gold
Pool in the late 1960s," I said."It was a previous
exercise in US Treasury- inspired gold-market
rigging, to thwart gold bugs inspired at the time
by General de Gaulle. After the policy became too
expensive and was abandoned, the bullion price
went from $35 to, in the end, $800. But that was
in the context of Vietnam War spending, an oil
price shock and an inflationary flare-up."
Freddie's gold tooth glistered again in the
evening sun."Did you mention the oil price?"
he chortled."What a coincidence. And American
consumers are spending far more on foreign goods
than Nixon ever did on fighting Ho Chi Minh. Now
the US government will have to admit defeat again.
"It will all come right out into the open soon
when the US Treasury is forced to respond to the
court case being brought by the Gold Anti-Trust
Action committee, the group of American gold
defenders organised from Texas. The Bush regime
will cut its losses and regard it as an opportunity
to repudiate what the Treasury did in pursuing
the strong dollar policy under Rubin and Summers."
I couldn't, I said, imagine that GATA would get
anywhere through the courts. But it was significant
that the US Business Roundtable, representing
manufacturing industry in the grip of a nasty
profits collapse, was pressing this week for a
more competitive dollar. Currency strength was a
useful weapon to head off domestic inflation
during the great boom; in contrast, as the global
economy took a dive, we now seemed to be heading
straight for beggar-my-neighbour territory.
But I said I was sorry that I couldn't pursue the
argument any further, because I needed to check
out the details of the gold mining stocks website.
When you are trapped by Freddie, any excuse will do.
His voice pursued me, nevertheless, his phrases
punctuated by that familiar braying laugh.
"Currency turmoil... bullion banks melted
down... hedge books in chaos."
It may have been my imagination, but gold fever
has an emotional connection with old-time religion,
and I'm sure I heard him tail off with:
"The end is nigh!"
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