|
|
|
Nightmare On Halloween/What’s Behind The Barrick Bid For Placer Doom
|
|
|
October 31 – Gold $464.30 down $8
- Silver $7.52 down 25 cents
Nightmare On Halloween/What’s Behind The
Barrick Bid For Placer Doom
He that wrestles with us strengthens our
nerves, and sharpens our skill. Our antagonist is our helper...Edmund
Burke
GO GATA!!!
Even though the dollar was firmer across the
board, the London AM Fix came in at $472.65 and only slightly
below the Friday close in New York. Time and time again we
see cash market pricing which confirms considerable demand
for gold above the $470 price level.
Like a broken record, The Gold Cartel wasted
little time going after gold and silver following the Fix.
Called lower, both gold and silver were hit early with gold
falling more than $2 and silver 7 cents. There are major holidays
for both the Indians and Muslims early this week. If The Gold
Cartel is going to make a move, it should come soon.
One of the lead stories of all on Planet Wall
Street was the hostile bid by Barrick Gold of Placer Doom:
07:38 PDG
Follow-up: ABX offers $9.2B in hostile bid for PDG; $9.5B
fully diluted; signs agreement with GG for certain PDG assets
(16.56)
The stock/cash bid of $20.50, represents a 23.8%
premium to prior close for PDG. Deal is expected to be accretive
to ABX's NAV, earnings and cashflow. ABX says the bid is $9.5B
on a fully diluted basis. PDG shareholders will have right
to elect to receive $20.50/share in cash or 0.7518 ABX stock
plus $0.05 in cash for each PDG share, subject to proration.
The maximum amount of cash to be paid by ABX will be$1.224B
and the maximum number of shares to be issued by ABX will
be 303M, including the conversion of PDG's outstanding convertible
debt and options.
Assuming full pro ration of these amounts would
result in $2.65 in cash and 0.6562 of ABX stock for each PDG.
Separately, ABX and GG have entered into an agreement where
GG will purchase certain PDG subsidiaries and an interest
in a development project which GG will pay ABX $1.35B in cash.
The total synergies from ABX's purchase of PDG and the ABX/GG
agreement are estimated to be $240M annually. GG expects that
if the deal goes through, GG's annual gold production would
increase by approx. 50% to more than 2M ounces ata total cash
cost of $150/oz. RBC Capital and Merrill advised ABX. ABX
is hosting a conference call at 9 ET. Dial-in: 800.215.1640
or 415.904.7360. GG is hosting a conference call at 10 ET.
Dial-in: 877.888.4210 or 416.695.5259. Note that PDG has not
yet commented on the hostile bid.
* * * * *
08:29 ABX
ABX CEO Greg Wilkins discusses hostile bid for PDG (27.20)
Wilkins says the timing for the hostile offer is "perfect"
for ABX, noting that PDG assets are a good fit and the companies
operate in many of the same countries. When asked about the
regulatory environment in Canada, Wilkins says that the Securities
Commission will give PDG time to search for an alternative,
but after that expires, the Commission has shown in the past
that it can push for PDG to eliminate the shareholder rights
plan. Wilkins says he was not aware of any other suitor for
PDG.
* * * * *
What do these proposed dealings mean?
1. The first thing to do is discount much
of the pundit analysis of what is going on here. The mainstream
gold analysts will come up with their standard pabulum. If
they are going to let Barrick get away with saying their hedge
book is down to 6.6 million ounces if you don’t count
their Pascua-Lama mine in South America, Barrick must realize
they can say anything and get away with it from the lightweight
mainstream gold pundits. These obsequious folks refuse to
challenge anything really worth getting into. I say that because
Barrick’s hedge book is actually around 13 million ounces,
not the 6.6 million ounces CEO Wilkins says it is. When Barrick
blows up some day, this disinformation should be used against
them in another lawsuit.
2. No matter what the spin, it is bullish
for the gold price. The proposed merger tells us The Gold
Cartel (Barrick) believes the price of gold is going much
higher and is scrambling to secure more supply.
3. Many of us on Planet GATA will spin the
takeover as a desperate move by Barrick to secure more gold
supply to balance out its hedgebook which is going further
and further underwater as the price of gold readies to take
out $500 per ounce. The general commentary from the mainstream
gold pundit should spin this announcement as a bullish development
for the gold market, but will not delve into the hedge book
issue.
4. What doesn’t quite fit is Placer’s
hedge book is very large, not in great shape, and probably
toxic. This bid is in contrast with Barrick taking over Homestake
years ago with all its unhedged ounces.
5. Goldcorp’s interplay in this takeover
bid explains why their CEO Ian Telfer won’t give GATA
the time of day. His interplay is with The Gold Cartel’s
Barrick Gold….
6. Ah Ha! I think I’ve got it. Been
scratching my head here to figure out what is actually developing
behind the scenes. The light bulb just went off.
Barrick is in bed with JP Morgan Chase which
is the US Government’s/Fed’s principal bank. Barrick’s
hedge book has been structured so that it can be rolled over
ad infinitum. Barrick delights in this fact and doesn’t
mention its growing hedgebook liability in its public commentaries
about the firm.
As we all know, Barrick is politically connected
at the highest levels of government. Former President Bush,
former Clinton power broker Vernon Jordon, former Canadian
Prime Minister Brian Mulroney, Germany’s former President
Helmut Kohl, etc., have all been on one of its Board of Directors
at various times ... and some of them still are. When you
mention Barrick Gold, you can include the US Government policy
towards gold and those assigned to carry out that policy,
such as JP Morgan Chase. It is one vast, insidious money/power/political
club.
The Gold Cartel knows their ill-conceived
scheme to manipulate and suppress the price of gold is going
down. The price of gold is going to take off in the months
and years ahead. While Barrick’s hedge book may have
been given immunity from blowing up and causing gold derivatives
problems, other large hedgers have not been accorded this
luxury. Placer Doom’s significant hedge book is potentially
one of the most problematic in that sense. By bringing Placer
under the auspices of the protection of The Gold Cartel (Barrick),
they are reducing the coming derivatives problems associated
with toxic hedges. It also will give Barrick more maneuverability
and clout as time goes on.
This is just a guesstimate on my part. However,
it all makes sense to me now.
The PM London Fix just came in at $470.75.
This is impressive as gold is under fire…
Not so fast. Right on cue, The Gold Cartel
has made its move minutes after the PM Fix. Gold was just
nailed for another $7 to the downside. Once again The Gold
Cartel pulls off a blatant raid on the price after the physical
market pricing was concluded for the day. Perhaps newer Café
members will understand why I have such contempt for the mainstream
gold world pundits who are so negligent about reporting what
is actually going on and when.
The Barrick/Placer Dome news can only be
analyzed as bullish for the gold price. MIDAS recently reported
how even a former Gold Cartel bullion dealer has admitted
the bullion banks will go all out to diminish excitement over
the gold price and the shares … and do so all the time.
Despite gold being $2 lower this morning, the shares were
mostly higher as a result of the Barrick announcement. Not
for long. They were just knocked for a loop when gold was
sent to the dumpster. This is beyond sickening.
The intrigue grows that all is not kosher
regarding this Barrick/Placer/Goldcorp deal:
NEW YORK, Oct 31 (Reuters) - Goldcorp Inc.
on Monday said Robert McEwen resigned as chairman and a director,
effective Saturday, and named director Doug Holtby as its
new chairman.
Holtby has been a director of miner Goldcorp
and predecessor company Wheaton River since June 2003, and
has served as the chair of the audit committee of Goldcorp
and Wheaton River.
Holtby is president and chief executive
of two private investment companies, Arbutus Road and MKC
Capital.
McEwen said in a statement that since giving
up the chief executive officer role in February 2005 following
Goldcorp's merger with Wheaton River, he has been seeking
new business endeavours.
McEwen said he has assumed the role of chairman
and CEO of two junior energy exploration companies.
-END-
As CEO of Goldcorp, McEwen actually was
a financial supporter of GATA, and wished us well. Rob McEwen
attended our cocktail party at Hy’s Steak House in Toronto
a year ago.
This is all very fishy. Can’t see
any way all of this proposed deal will not be approved and
go though, not with the Canadian and US money and political
power behind the proposed merger.
JUST IN – 10:30 AM EST
The Comex floor reported they have rarely
ever seen anything like it. GOLDMAN SACHS has been bombing
every bid in sight and burying the price. It is not the rest
of the "trade" doing the damage. They are actually
sitting on the bids. It is almost exclusively GOLDMAN SACHS
doing the major selling. Never received such a definitive,
exclamatory report like this from the Comex floor before re
a lone seller ... not one other time as emphatic as this in
the last 7 years.
Our veteran floor source relayed that the
GOLDMAN SACHS bombing of the gold price was related to the
Barrick/Placer announcement. The nefarious side to this besides
my earlier MIDAS thoughts is that The Gold Cartel wants to
keep the price as low as they can to demoralize the gold players/industry
to make it easier for this deal to go through. This line of
thinking (from another Café source) fits in perfectly
with the rest of the thinking of many of us on Planet GATA.
Not only was it unusual for Goldman Sachs
to stand out SO MUCH as the noted single-handed bomber of
the gold price today, it was accompanied by the change of
the trading pattern mentioned to you in this column these
past many weeks. It was like the old days going into the close.
No late rallies at all. The Goldman Sachs induced price butchering
was followed by selling into the closes.
From a fellow Café member:
Well now didn't I say this to you last year
? :-) .........
"In that regard you have to wonder
if The Gold Cartel and PPT read the MIDAS commentary for their
clues when to attack?"
Well of course they read you! The PPT guys
are cheaters and you are right at the front of the Gold crowd
so what else would the PPT do?......in fact your site is probably
one of the best indicators for them!
Paul
Perhaps so Paul.
The gold open interest fell 433 contracts
to 346,308, while the silver open interest rose 1088 contracts
to 142,778. The dichotomy of the two OI patterns continues.
Hudson River and Saban went after silver
when gold was attacked. There were no bids. Morgan Stanley,
a huge silver bull, was nowhere to be found.
** Keep an eye out for some possible significant
management changes this week at a well known international
bank, one which is also a bullion dealer.
The John Brimelow Report
Happy Diwali, & Eid -
Happier TOCOM?
Monday, October 31, 2005
Indian ex-duty premiums: AM $2.72, PM $2.16,
with world gold at $471.95 and $472.40. Adequate, and slightly
too low, for legal imports. The rupee softened in the afternoon,
counter-intuitively in view of a 2.69% rally in the Bombay
Stock Exchange and softer Oil prices.
Tomorrow is Diwali, the most important Hindu
festival of the year, and one which in my experience is the
most scrupulously observed. No doubt today’s late trading
was effected too. The Muslim world will be closed for the
latter part of the week celebrating the end of Ramadan.
The Bears, in other words, have a pretty
free paw this week, with the key physical markets out. The
relative importance of the Islamic and Hindu markets to gold
has, of course never been greater.
But of course any price set – or engineered
– while such crucial buyers are unsighted is not likely
to have lasting significance.
TOCOM, which missed Friday’s Western
Hemisphere gyrations, was unimpressed this morning. Volume
was static, equaling 19,357 Comex (+1.4%): the active contract
rose 1 yen and world gold dipped $1.10 from the NY close.
Open interest rose 1,008 NY contracts – according to
Mitsubishi’s data the public added 1.1 tonne to its
long.
Tomorrow could be a different story. With
the yen down 70 bps from the Tokyo close – a new 25-month
low - and world gold down some $6, the stage is set for some
classical Japanese bottom-fishing.
As noted on Friday, gold ran into a classic
post-Europe selling raid, which however was defeated apparently
by the physical market. ScotiaMocatta observed:
"The price started to fall encouraging
locals to go short as well which helped force a session low
of 469.20/469.70. However, physical buyers soon came into
the market taking the price back to the 471.00 area …until
New York dealers entered the market on the buy side. The dealer
buying caused an end of the week scramble to cover short positions
and in turn took gold to the session high of 473.40/473.90"
On volume of 44,450 open interest, open
interest edged down 433 contracts: not much in the way of
long term shorts appeared to be covered.
Monday of course has seen an even more abrupt
and more successful post-PM fix raid. Neither of the reasons
advanced for it withstand analysis. The CFTC data in fact
revealed a distinct moderation in the spec long. Barclays
commented:
"In the week ending Tuesday 25 October,
CFTC data revealed that the rising trend in gold’s speculative
net long position was reversed with a reduction of 17.1K contracts
resulting from long liquidation (17.6K contracts), and modest
short covering (-0.5K contracts)."
The most insightful analyst on CFTC data
felt moved to put out a piece this morning pointing out the
large spec net position had fallen below 500 tonnes for the
first time since mid September, and suggesting that liquidation
might be almost over. While the dollar did continue to participate
in the extraordinary outburst of Wall Street triumphalism
of the past two sessions, the acute drop after 10 am NY time
was actually in Euro/gold, suggesting a non – currency
driven seller.
So the Bears have learned about Hindu and
Muslim festivals. Have they grasped the propensities of TOCOM
futures traders?
JB
CARTEL CAPITULATION WATCH
Here is a perfect example of why the mainstream
gold world deserves such contempt. Their reporting on what
actually is transpiring in the gold pits is nothing more than
blatant disinformation:
DJ MARKET TALK: Fund Liquidation, Strong
USD Pressure Gold Dn
1541 GMT [Dow Jones] - Comex gold is trading
near its lowest level in a week at $468.30 an ounce, down
$6.40 on the day, basis the Dec contract. Leonard Kaplan of
Prospector Asset Management says funds are aggressively liquidating
long positions ahead of the Federal Reserve meeting Tuesday
where interest...
-END-
Kaplan is such a Planet Wall Street stooge,
the same guy who said for years gold could only go up because
of a weakening dollar. Sure the funds sold late. However,
that is not why the price was mauled.
The DOW rose early and then refused to advance
further, closing at 10,440, up 37. The DOG soared 30 to 2120.
After the close, Dell disappointed, like most of the big DOG
names have recently.
Jesse notes:
Mutual funds close their fiscal year today.
I believe that the close this afternoon will determine many
of the mutual funds' metrics, most likely including bonuses.
***
This column makes mention of Dennis Gartman
from time to time because he has a vast following and is extensively
covered by the media. He is short the stock market and very
long gold. He also publicly mocks Planet GATA for our views
on the PPT and the manipulation of the gold price by the cabal.
A few more days like today and he will be forced to become
a vociferous advocate of the Planet GATA line of thinking
on the markets. From his commentary this morning:
"We know not what to make of this abjectly
random violence in the markets, for we cannot recall a period
when prices moved this swiftly, this markedly and this randomly.
...we find this randomness disconcerting ... and rather embarrassing
given that we were short of US shares on Thursday and looked
rather prescient, only to appear rather badly out-of-step
by mid-morning Friday."
-END-
You are even more badly out of step this
afternoon Dennis G. Rational analysis of the US stock market
and gold market is useless in the short-term. It hasn’t
done me any more good lately than it has done you. The difference
is I know why my short-term market thinking is not panning
out. You, on the other hand, refuse to deal with the obvious.
One plus for the market bulls today was
a sharp drop in crude oil and a close below $60 at $59.76
per barrel.
The dollar jumped to 89.97, up .47 with
spot yen making new lows for its move at 116.39, down .73.
The spot euro dropped .80 to 119.87.
US economic statistics:
08:30 Personal Income 1.7% vs. consensus
0.3%; Spending 0.5% vs. consensus 0.5%
Prior income revised to (0.9%) from (0.1%); no revision to
Spending (0.5%). PCE m/o/m was 0.2% vs. consensus 0.1%. Prior
PCE revised to 0.1% from0.2%.
* * * * *
WASHINGTON (Reuters) - Consumer spending
rose 0.5 percent last month as post-hurricane insurance payments
led to the biggest jump in income in 10 months, a government
report showed on Monday.
Personal income jumped 1.7 percent, the
biggest rise since December 2004, as insurance payments in
the wake of hurricanes Katrina and Rita rose at a $120 billion
annual rate, the Commerce Department said.
The gain in spending matched expectations
on Wall Street, but the increase in income handily outstripped
forecasts for a 0.3 percent rise.
The income gain, however, followed a downwardly
revised 0.9 percent drop in August that reflected plummeting
rental and personal business income after the storms. Rental
and proprietors' income declined again last month, but not
as steeply.
While spending rose last month, the increase
was more than accounted for by surging energy prices. Adjusted
for inflation, spending fell 0.4 percent after a 1 percent
August drop.
The department's inflation measure - closely
watched by policy-makers at the Federal Reserve - shot up
0.9 percent, the biggest rise since February 1981.
But excluding food and energy, the so-called
PCE price index advanced just 0.2 percent. Over the past year,
this core price index has risen 2 percent, a level considered
to be at the upper end of the Fed's comfort zone.
The data released on Monday was incorporated
in a report on third-quarter economic growth released on Friday,
which could lessen its value to financial markets trying to
determine the direction of the economy and interest rates.
The saving rate - the percentage of after-tax
income Americans sock away - remained in negative territory
in September for a fourth straight month.
The department said the saving rate percentage
was minus 0.4 last month, after bottoming out at a minus 1.8
in August.
-END-
9:58 Chicago Purchasing Manager's reported
62.9 vs. consensus 57.4
Prior reading was 60.5.
* * * * *
The latest input on the Chinese economy:
BEIJING, Oct 31 (Reuters) - China's current
account surplus for the first half of the year rose ninefold,
topping 8 percent of gross domestic product as booming merchandise
exports swamped a deficit in services trade, official figures
showed on Monday.
The data underscored the battle Beijing
faces to cut the country's billowing balance-of-payments surplus,
which is putting persistent upward pressure on the yuan despite
July's 2.1 percent revaluation and fuelling trade friction
with the United States, analysts said.
The State Administration of Foreign Exchange
said China's current account surplus swelled to $67.26 billion,
up from $7.47 billion a year earlier and almost as great as
the $68.7 billion surplus for all of 2004.
"The message is already pretty clear:
the current account surplus will rise significantly this year,"
said Yiping Huang, an economist at Citigroup in Hong Kong.
The first-half surplus was equivalent to
8.1 percent of China's first-half GDP, which totalled $832.37
billion.
China is under strong pressure from the
United States to reduce the surplus by letting the yuan rise
faster…
-END-
From Jesse:
The LBO of Main Street, USA
Leveraged Buy Out: a financial strategy
involving the acquisitions of an asset or business,
utilizing a significant amount of debt, and little or no equity.
Now Playing at Jesse's Charts:
http://www.geocities.com/arthurcutten/jesse.html
-END-
From www.urbansurvival.com(George Ure):
Cheney to Court?
As we reported last week, only Scooter Libby
was indicted by the Grand Jury which has been looking at the
PlameGate case. Now,
there's a report from the Drudge Report that Dick Cheney will
be called in open court to testify - a move which sets
up a major showdown on "executive privilege" and
which may undermine Cheney's ability to lead the neocon agenda
in DC (and the Middle East).
Meantime, as we have speculated in the past,
there is growing speculation that the Fitzgerald Grand Jury
is only foreplay to the McNulty Grand Jury which looks
to be investigating the forged Niger uranium documents - documents
that were key in getting the U.S. to march into Iraq.
All of which boils down to a confounding
legal stew as we read it: Consider for a moment that the Fitzgerald
Grand Jury may have merely found basic information which then
opens up the wider probe of who told what lies to rope us
into war. The report that Cheney may be called - and the resulting
fight over executive powers - all leads us to the conclusion
that "Official A" referred to in the indictment
might be you-know-who.
Here's something to seriously ponder: If
it was shown conclusively that forged documents and "doctored
intelligence" was used to "sell" the Iraq war
to the American public, would that constitute treason, breach
of the public trust, or what....and would it be actionable
against all those involved?
We have heard of foreign speculation that
Presidential
Succession might have to go all the way to Secretary of
Agriculture Mike Johanns to find someone untainted by the
smell that's beginning to emerge. Of course, the workout of
this is now looking like many months, and perhaps a year or
longer. Johanns
sounds like our kind of folk: Works hard during the week,
"relaxes poorly" according to his wife, and on weekends
makes a serious contribution to housekeeping. Yup, interesting
that news of him is percolating up around the fringes of mainstream
media
-END-
Oct.
Is Deadliest Month in Iraq Since Jan.
AP - 50 minutes ago
BAGHDAD, Iraq - Six American soldiers were
killed in separate attacks Monday and a Marine died in action
the day before, making October the deadliest month for U.S.
troops in Iraq since January. U.S. jets struck insurgent targets
near the Syrian border and at least six people were killed.
Four soldiers from the Army's Task Force Baghdad soldiers
died Monday when their patrol struck a roadside bomb in Youssifiyah,
12 miles south of Baghdad in an area known as the "triangle
of death."
-END-
How can anyone say the situation in Iraq
is improving, with the war supposedly over for more than 2
½ years? One point I would like to make clear, especially
to newer Café members. I am not a Democrat, nor a liberal
(not that there is anything wrong with being either). My delving
into the war subject is because some day it is going to have
a monumental impact on US financial markets.
Before the war started, I ranted against
it because it seemed to me the trumpeting up of the reasons
to go to war in Iraq were eerily like what was behind the
manipulation of the price of gold … that both were bogus
and un-American. As time goes by, it looks more and more like
this is, and was, the case. The gold fraud has been apparent
for a long time now. The Iraq one is just beginning to unfold
and gain momentum.
What Goldman Sachs did to the price of gold
today is essentially an effort to crush dissent for those
who believe in free markets. The message is if you oppose
them they will make you pay for it. It is very similar to
what the Bush Administration did to those who challenged them
on the reasons for going to war. If this doesn’t scare
you to some degree about where America is headed, then I don’t
know what will. It is nightmare time on Halloween day for
all Americans!
When we review what occurred the past two
business days in all the US financial markets, we can view
the extent of the market engineering, which is phenomenal
(not an exaggeration):
*The stock market went into a rocket ship
mode rally.
*The dollar was sent back to the upside
near its highs.
*The rise in intermediate/long-term interest
rates was checked.
*Gold and silver were battered.
The Bush Administration and honchos are
going all out to turn the opinion polls around and to build
political momentum again. If the US stock and real estate
markets go against them in a significant way, they know they
are done for. Thus, they exploited the news the past two days
to go all out and bulk up their standing with the American
public. This included sending Goldman "Hannibal Lecter"
Sachs to bury the gold price all by themselves on a day in
which the featured buyers, the Indians and Arabs, were tending
to festival and religious matters.
This will end very badly some day for the
Orwellians and us Americans.
October could be worst for hedge funds since
2000
LONDON, Oct 31 (Reuters) - Tumbling stock
prices and a high-profile bankruptcy in the United States
mean October is likely to be the worst month for hedge funds
since the 2000 equities crash, industry participants say.
However, they do not expect any losses this
month to trigger a mass investor exodus from hedge funds,
the investment vehicles which some see as risky because they
can use derivatives, short sell and borrow or leverage to
take bigger positions.
Expectations are that average losses will
be between 2 and 3 percent, which would be the highest since
March and April 2000 when the technology bubble burst and
hedge funds were left nursing losses of 2.1 and 4.6 percent
respectively, according to Credit Suisse First Boston Tremont
Index…
-END-
This development is HUGE for us gold bulls
as this new market will affect The Gold Cartel’s ability
to maneuver as freely as they have in years past:
Dubai still enhancing its gold market position
Posted: '31-OCT-05 09:13' GMT © Mineweb 1997-2004
The gold futures contract will go live on
November 21. When we last wrote on this subject, the Exchange
was reporting considerable interest from a wide range of market
members. The exchange will trade from 10:00am to 11:00pm local
time Monday to Friday, thus overlapping with the Far East
and North American markets. And a new development is that
the Exchange will also open on Saturdays and Sundays as of
early 2006 (although with shorter trading hours), thus giving
traders access to a week-end market.
http://www.mineweb.net/sections/gold_silver/511515.htm-END-
Rhody on the lease rates:
Hi Bill:
Lease rates have changed little from last week. Only gold
is in incipient backwardation, with the one month to one year
spread easing to .08% Knowing what we do about the massive
deliveries taking place on COMEX in gold and silver (35 Moz
of silver have changed ownership and 1.1 Moz of gold, about
one third of COMEX stockpiles were delivered this month or
last), the lease rates patterns are just too benign to be
true. It is my belief that lease rates are as managed as any
other financial instrument in the western world, and the management
has become more intense over the past 5 years. Lease rates
in precious metals are pivotal in maintaining the illusion
that everything is just fine in financial land. The lease
rate curves are completely normal and benign, except in gold,
but we know that the entire system is stressed to the limit.
The problem here is that in contrast to
ten years ago, the lease rates give no warning of commercial
shorting blitzes, and I fear will give no warning when the
CABAL begins to lose control. We shall see.
Regards, Rhody.
http://www.kitco.com/market/lfrate.html
Hi Bill:
I just sent in my comment on lease rates,
and then had another look at gold and silver. There was no
advance warning in silver lease rates of this pending bear
attack, so either this was accomplished entirely with futures
or silver was leased at rates that were completely artificial
and sold into the spot market.
Regards, Rhody.
http://www.kitco.com/charts/livesilver.html
In case you missed it:
Click
here: Mexico Mulls Silver Lining Against Currency Crash
***
A number of Café members have inquired
about the Blanchard suit against Barrick Gold in New Orleans
Federal Court:
By MATT SEDENSKY and RUSS BYNUM, Associated
Press Writers Sat Oct 29, 5:57 PM ET
NEW ORLEANS - In his third day back on the
bench since Hurricane Katrina struck two months ago, Criminal
District Judge Benedict Willard opens court by entering a
plea of his own — for patience.
"We're going to do as much as we can,
with the limited resources," Willard says of this battered
city's struggle to resuscitate a justice system crippled by
the monster storm.
-END-
Hard for anything to happen in that environment.
Kudos to GATA’s Chris Powell for his
retort to the NY Times assault on the gold mining industry
in this email sent to the Café membership:
[GATA] The gold issue is a lot more complicated
than The New York Times lets on
***
Numerous well deserved complements were
sent Chris's way:
"VERY WELL SAID AND WELL WRITTEN --
You should send this to the NYTimes."
"Powell should write an op ed piece
for the NYT on this topic. BTW, he writes eloquently."
Chris did send it to the NY Times. We shall
see.
John Brimelow called this afternoon to say
the gold volume on the Comex surged in the last hour to 19,000
contracts. The Gold Cartel made sure gold closed on its lows.
From Eric Hommelberg:
Hi Bill,
The HUI held up quite well today in the face of a $8 drop
in Gold.
In my article HUI – Not Dead Yet !
I said there’s no rush to sell gold stocks. I still
stick to that!
Why ? The Gold/HUI chart tells me. Its one
of my favorite indicators. Already since May this year the
Gold/HUI ratio in trending down. This means that the gold
shares are outperforming Gold… The month of October
however showed an inversed picture which is a rally of the
Gold/HUI ratio instead of the desired drop.. But it seems
that the October rally is on its last legs and if the Gold/HUI
ratio fails to breach its 200 dma to the upside it will continue
its down-trend which started mid-May. The HUI performance
of today is pointing towards a further decline of the Gold/HUI
ratio indeed.
Below are the Gold/HUI ratio and HUI charts..
Notice the HUI chart, this formation should solve itself one
way or the other within a week. My guess is to the upside
for reasons mentioned above..
Furthermore I would like to let you know
that we’ve just published our first monthly issue of
‘The Gold Discovery Letter’ which covers Gold/HUI
analysis in depth and current exciting discovery cases.
Readers interested can download a free copy
at :
http://www.golddrivers.com/GDRUpdates/gdrupdates.htm
All the best,
Eric
It was a nightmare Halloween for our camp
with the trick on us, courtesy of Goldman Sachs and The Gold
Cartel. It is an outrage on a day which the surprise Barrick
news will be interpreted bullishly. No other Wall Street sector
would ever trade like this. Unfortunately only the GATA ARMY
will express outrage at what is going on and articulate why.
While those of us who are infuriated have every right to feel
this way at the moment, gold and silver should not stay down
very long. The gold/silver fundamentals are too compellingly
bullish. The assault on contract highs for gold and silver
will resume shortly. Our treats are still to come and they
will be bonanza ones.
Nightmare Halloween for my thoughts on the
markets too. Bullish on oil, gold and silver. Bearish on the
US stock market. Bad Day At Black Rock. Bowed, yet not broken.
Big picture, nothing has not changed one bit. At least for
gold, silver and the future direction of the stock market.
There is good reason to believe The Gold
Cartel manages the gold shares as part of their manipulation
of the gold price. The gold shares have acted unreasonably
weak of late vis-à-vis the price. Now we know why.
The Gold Cartel had planned to bury the prices of gold and
silver today and sent in Goldman Sachs as their hatchet man
to get the job done this morning.
Considering how gold and silver were brutalized,
the shares held their own. Most likely due to the Barrick/Placer
news and to covering of shorts by those manipulating the shares
as part of The Gold Cartel's drill. The XAU rose 1.04 to 107.84,
mainly due to the strength of Placer and the HUI only lost
1.36 to 222.84. Support at 220 held nicely.
HUI
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=hui&sid=0&o_symb=hui&freq=1&time=8
The bid by Barrick for Place is likely to
inject some excitement in the gold share sector and even in
the moribund explorations. This is a time to focus on the
gold and silver shares, not run from them.
GATA BE IN IT TO WIN IT!
MIDAS
Appendix
Hi Bill,
Hope you are holding up well during this most recent assault
upon gold and silver. I am going to hazard a wild guess that
today's $8.00 takedown in gold ($00.25 in silver) is connected
to tomorrow's Fed meeting... Duh, can the timing of these
interventions be any more obvious? These guys are broadcasting
their power and control over perceived inflation and setting
up their justification for no increase to the Fed rate. The
energy villain has been mostly contained, so now the standard
inflation benchmark, gold, must also be defeated. This will
enable Wall Street to achieve their lustfully craved Santa
Clause rally and improve the perception of the U.S. economy.
It's a win-win situation for the establishment and the President's
falling popularity. Economic fundamentals, a.k.a. reality,
will just have to be put on hold till after the holidays.
The script for this fairy tale world in which we live has
been written to satisfy a naive populous, which has the mind
set of a ten year old spoiled child. There is no accountability,
no limit to deficit spending, no cause and relation, just
fun, fun, and more fun for the children. Who needs hard assets
and a hedge against inflation when the stock indices and government
statistics are screaming prosperity? Everything is fine, matter
of fact; it's wonderful! Makes me wonder what is really known
about the ensuing Avian flu pandemic and other potential geopolitical,
world changing events. It is all obfuscation and diversion,
which supercharges my usually low paranoia. We sure do live
in interesting times.
Rich C.
Good evening Bill,
Found some data on the U.S. Mint’s 2003 and 2004 annual
report that you and fellow readers might find interesting.
The following information was copied from the report:
------------------------------------------------------------------------------------------------------------
UNIT COST OF PRODUCING AND DISTRIBUTING
COINS
FOR THE YEAR ENDED SEPTEMBER 30, 2004
Penny Nickel Dime Quarter Half Dollar
Cost of Goods Sold $0.0090 $0.0446 $0.0212
$0.0466 $0.1101 $0.0984
General & Administrative 0.0001 0.0006
0.0100 0.0257 0.0569 0.1114
Distribution to FRB 0.0002 0.0004 0.0002
0.0010 0.0027 0.0016
Total Cost per Unit $0.0093 $0.0456 $0.0314
$0.0733 $0.1697 $0.2114
DEPARTMENT OF THE TREASURY
UNITED STATES MINT
NOTES TO THE SCHEDULE OF CUSTODIAL GOLD
AND SILVER RESERVES
AS OF SEPTEMBER 30, 2004 AND 2003
Note 2. Gold and Silver Reserves
The gold and silver reserves reported in
this Schedule are exclusive of the gold and silver reserves
considered to tie operating inventory in the United States
Mint's financial records and of the Treasury gold held by
the FRI. The custodial gold and silver reserves included in
this Schedule are primarily in bar form, but may occasionally
be in coin or other form. The custodial reserves also include
foreign gold coins that have been held by Treasury for many
years.
The gold and silver reserves are reported
in this Schedule at the lower of cost or market value. Absent
historical records to determine the acquisition cost of the
gold and silver over the decades, the reserves are valued
at the rates stated in U.S. Code Title 31, Sections 5116 and
5117 (statutory rates) which are $42.2222 per Fine Troy Ounce
(FTO) of gold and $1.292929292 per FTO of silver. An offsetting
liability is also reported for these assets.
At September 30, 2004 and 2003, the market
value of gold was $415.65 per FTO and $388.00 per FTO respectively.
Gold inventories consisted of the following at September 30:
FTO Statutory Value Market Value
2004 245,262,897.04 $10,355,539,091 $101,943,523,155
2003 245,262,897.04 $10,355,539,091 $ 95,162,004,052
At September 30, 2004 and 2003, the market
value of silver was $6.6650 per FTO and $5.1150 per FTO respectively.
Silver inventories consisted of the following at September
30:
FTO Statutory Value Market Value
2004 7,075,171.14 $9,147,696 $47,156,016
2003 7,075,171.14 $9,147,696 $36,189,500
The combined gold and silver custodial reserves
consisted of the following at September 30:
Statutory Value Market Value
2004 $10,364,686,787 $101,990,679,171
2003 $10,364,686,787 $ 95,198,193,552
In prior years, custodial gold and silver
FTOs were transferred to the PEF for numismatic operations.
The PEF is responsible for either replenishing the custodial
reserves with newly mined gold or paying the Treasury General
Fund for the custodial reserves transferred to the PEF for
numismatic operations. There were no such transfers during
FY 2004 and 2003.
Supplemental Information per Public Law
107-201
Public Law 107-201 (July 23, 2002) authorized
the United States Mint to purchase silver on the open market
to mint coins when the Strategic Stockpile of silver was depleted.
The law requires annual reporting of the amount of silver
purchased on the open market by fiscal year. The following
are purchases for FY 2003 and FY 2004:
Quantity (FTO) Market Value
FY 2003 9,709,426.5470 $ 45,663,721.33
FY 2004 12,968,078.1850 $ 81,939,233.25
----------------------------------------------------------------------------------------------------------------------------------------------------
The complete report can be viewed at http://www.usmint.gov/downloads/about/annual_report/2004AnnualReport.pdf
The above PDF file is more readable. My cut and paste imported
some mistakes which I have hopefully corrected.
A couple of interesting points about this
report. The cost of minting a penny is 0.93 cents and the
cost of minting a nickel is 4.56 cents. The government will
soon be minting these at a loss if they aren’t already.
The paragraph which begins "in prior years" states
that the Mint’s Public Enterprise Fund (PEF) used to
get its gold from the treasury. They conveniently leave out
where the have got the gold for the last 2 years. Either the
Mint is drawing down their stocks or they are buying on the
open market. Why the switch in procedure? In recent years
they have used about ½ million ounces per annum (17
Tons). The last point is that they bought 12.9 million ounces
of silver from the open market in 2004. This is more than
the annual mintage of silver eagles for any year through 2003.
It would be interesting to know how the CPM and Silver Institutes
surveys compare to this quantity.
I have always enjoyed the daily Midas, but
even more so recently. I think a storm is brewing in the west.
-Bryant
***
Copyright (c) Le Metropole
Cafe, Inc.
www.lemetropolecafe.com
Le Metropole Cafe is a Membership site. Visit and experience
a 2-week Free Trial!
|
