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Newmont Mining Corporation Message Board

  • zeno451 zeno451 Jan 31, 2004 12:06 AM Flag

    ReplyTo PipeFitter Washington Accord

    Re: Norways Gold-zeno
    by: zeno451 (54/M) 01/31/04 12:03 am
    Msg: 48694 of 48694

    As I've stated many times over the past 18 months the LTCM crises precipitated the Washington Accord. i.e. LTCMs bankruptcy(300 tonnes of gold) left the whole gold leasing game subject to a domino like collapse. Ergo the CBs stepped in and assumed the LTCMs obligations. One year later the WA was launched to wash the LTCM gold fiasco through the system. Gold went up and the CBs said the WA was designed to help out the gold miners. Well gold went up because the bullion bankers had to go to market to buy real gold to offset their individually specific LTCM obligations. The WA originally provided REAL gold to cushion the bullion bankers added purchases of gold in the marketplace. That is to say the CBs still thought they could recover their leased gold from the marketplace. THE 1000 PLUS TONNES OF GOLD DEHEDGING OVER THE LAST TWO YEARS IS WHAT WOULD BE TURNING THE WA gold sales into a clear up of the leased gold accounts. Ergo the original WA solved a problem of a lack of physical gold supply to clean up the bullion bankers problems stemming from the LTCM collapse. What I'm saying is the bulk of the gold sold under WA 1 was physical bullion. But due to the gold miner dehedging and the need to wash the 1000 tonnes of gold miner dehedged gold throught the system I argue that the bulk of WA 2 sales will be directed to writing of the leased gold. That would mean higher gold prices as the CBs don't intend to give away the gold in their vaults for pennies on the dollar given their knowledge of the markets. The Russians are buying The Chinese are committed to buying. They announced a purchase of 3 million ounces a year ago last december. The Japanese have started intimidating the Fed-treasury with gold buying threats. One source has moved the WA extension announcement to April 24-5. That would leave just a mere four months between the announcement and the expiry of the Accord. Some serious bickering and infighting as to who is actually going to deliver real gold to the market is underway.

    Posted as a reply to: Msg 48686 by pipefitter9

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