Does anybody know what happened to Andy?

I'm suprised we havent heard from him lately with all the Bullish News out there on Oil and Gold.

Anybody have a clue?

-- Zdude (zdude777@hotmail.com), February 11, 2000

Answers

Andy is busy somewhere else. When he's back here, you'll know it, Zdude!

-- dinosaur (dinosaur@williams-net.com), February 11, 2000.

Meanwhile, here's something for you gold buffs to read until Andy gets back:

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Good gold read...

Posted By: Scooter Date: Friday, 2/11/0, at 8:42 p.m.

...from LeMetropole cafe Hannibal Cannibal," Morgan Stanley, came right out of the box today before the Comex opening and slammed the gold market with selling. Gold bent today, but did not break as a $5 down day is not much after that $32 surge of the last 6 trading sessions.

The reason given and spread around the trading floor for the price weakness was that gold destined for India from Dubai was being shipped back to the U.S. to be sold here. The bullion dealers have such big problems with their short positions that they will come up with anything to try and pressure the market. Not to say that some gold from Dubai won't hit the U.S. gold market, it just won't be enough to do any serious damage.

The Cafi's John Brimlow understands the Indian gold market as well as anyone. He tells me that a "reflux" action from Dubai back to here is normal when there is spike up in the gold price. Dealers in Dubai purchase gold here in the U.S. to sell to the Indian consumer. When the gold price soars like it just did, the Indian consumer backs off for a bit, so the dealer sells the gold back to where he got it and then books a big trading profit. The Indians usually come back in after a number of days with more orders as their own inventory runs down, so the Dubai dealer has to buy gold again.

The gold chart looks terrific and today's lower gold chart was a good one according to the technicians we spoke to this afternoon.

I am still looking for a dramatic price explosion at some point.

There will probably be a trigger and that trigger could be the unraveling of the Ashanti mess.

After gold closed today, there were rat a tat tat of Dow Jones wire service releases. The are stunners in my book:

ACCRA, Ghana (Dow Jones) --Ashanti should scale down its gold hedging position and buy up smaller gold companies to increase production, Jean-Claude Gandur, a possible future leader of the company, told Dow Jones Newswires on the sideline of a court case last month.

Th comments, which couldn't be published while the trial was ongoing, came as Gandur lead a group of Ashanti minority shareholders in a court battle to hold an Extraordinary General Meeting. The plaintiffs, who hope to replace certain company directors, won the right to hold an EGM with the next 21 days.

Gandur is a likely candidate for leadership of Ashanti if a new board is elected. A decision to scale back Ashanti's hedge book could mean lower volumes of gold being sold forward on the world market and could even mean a massive gold buy-back.

Gandur said the gold hedge book should be "drawn down" to ease the company's cash flow. Such a move, he said, would pave the way for an expansion of Ashanti's gold production through the acquisition of smaller goldmining companies. End

This one from Dow Jones was right behind it:

2: Govt Also Wants to Cut Hedging

"A source familiar with the affair said the government, which holds a 20% stake in Ashanti and a golden share, also wishes to reduce Ashanti's hedging position. He compared Ashanti's large hedging position to a Rolls Royce, saying that Ashanti can only afford a Ford Escort. The hedge book he said, needs to be brought down to a more manageable size.."

Two hours later the following appeared in another Ashanti story was carried by Dow Jones:

"Meanwhile, Ashanti has filed for a stay of execution of the high court's order restraining them from taking out further loans, said a source involved in the legal negotiations.

"Ashanti has said it wishes to sign a $100 million loan from Barclays Bank. During the court case, Ashanti has argued it needed the $100 million to prevent it from becoming insolvent.

"Ashanti has now changed tack and is arguing that the loan is for further development of the company's Geita gold mine in Tanzania, said the source. On this basis, Ashanti hopes to gain permission from the judge to obtain the loan, he said.

"Ashanti hopes gold production at Geita will start by June 30.

"The source said the lawyer for Shanti and the lawyer for the original plaintiffs are to meet with the judge this coming Tuesday."

End.

Are you confused yet? This is one quagmire that comes at you like a bowl of spaghetti.

Allow me to do what I can with this.

17 bullion banks led by lead advisor, "Hannibal Lecter" (Goldman Sachs) influenced Ashanti to select exotic hedge programs in such a degree, at such low price levels in recent years that when the gold market exploded late last September and in early October, their hedge book blew up. Goldman and the other bullion dealers forgot to put an explosive, fast moving gold move up possibility in their computer option volatility models for the Ashanti executives. In other words, the Ashanti management had no idea that the volatility on the calls they had written could go so high, so fast and therefore cause the price of those calls to skyrocket. The sky high calls caused massive margin call exposure and big time dollar losses.

The surprise Washington Agreement surprised the gold market and effected an $84 rise in the gold price in days. And Voila! Ashanti is in the toilet.

It is now 4 months later and the haggling over the devastated company continues. According to the press release yesterday, the Ashanti hedge book is down some $570 million, give or take. The present Ashanti management is being challenged by insurgent shareholders that seem to have the backing of the Ghanian government, so we know who wins this one, and they want the hedge book reduced.

Meanwhile, the bullion banks that are exposed for all these losses are sitting short 9 million ounces of gold on their books. As the price of gold rises, the loss grows. A banker's nightmare.

There have not been any recent statements about what was going on because of a gag order that was lifted today. And then, after the gold close in New York, we find out that the government of Ghana wants the hedge book reduced.

That means gold buying hitting the market at some point. Positions will be closed out and losses taken. Who pays for them?

There are many questions here. Does the Ghanian government want the gold price to explode and then plan to walk away from the resulting bullion dealer losses sitting on their books? Is that why this statement was made tonight?

Will the shark hedge funds jump in here and load up on gold knowing the vulnerability of the bullion dealer banks? Will they goose the gold market like they always do when there is easy prey to be had? Especially now that so many producers will not be selling into rallies.

Will this be the trigger that blows up the colluding gold shorts? Will this be the event that causes a gold buying panic for those gold market players sitting on 10,000 to 13,000 tonnes of gold shorts with no way to get even a fraction of all that gold in a short period of time?

The set up is here for a big move. We will see. Will Secretary Summers and the Exchange Stablilization Fund have to stabilize the gold market? The Commitment of Traders report released after the close shows the small and large specs have increased their positions significantly while the trade have increased their shorts. The open interest is just less than 160,000 contracts, which is a low number. It is a low number because the producers are buying back their hedges. So, the specs and producers are buying. Who is selling and how much have they had to sell just to slow down the gold rally?

How long can the manipulation crowd hang on? That is the real question. Regardless, I have said that the gold market could explode at any time as this "goon squad" is overpowered. That is what I believe and there is not much of a ceiling for the gold price when that occurs!

$600 gold is my target, in the next couple of years, maybe in the next couple of months! Not such a big deal. March palladium traded that high today and finished at $598.85, up $18.85.

Oil closed at $29 and 1/2 dollars, practically unchanged after trading up to $30, down to $29, then up on the day, then down on the day, etc. A wild affair. Market still looks like it wants to go much higher.

Gold analysts are turning bullish. The Merrill Lynch gold analyst in Australia is looking for $350 plus gold. The head of research at BNP Ltd in Australia is looking for $340 to $360 gold in 6 months and $400 in one year. This is great to see, but where were these guys two weeks ago? Better late than never.

What few of these analysts know is how really explosive the gold situation is. They don't know how big the loans are for example that could propel a moonshot move up in gold to prices that they cannot even conceive of - because they do not realize what has been really going on behind the scenes in the gold market and they are also not working with the right numbers. There is so much else like that which will be revealed as the market moves up.

Might be more to come for you on all of this over the weekend if all goes well.

Don't know how this relates to the bullion dealer in trouble story, put out the other day, but I was told this afternoon that the United Bank of Switzerland chief gold trader was just fired and that their option book was a mess.

Chris Powell received a letter today from Martin Armstrong. He wrote that the government seized some of the tape recordings he had made describing market manipulations. He asked Chris to get a transcript of his appearance in court Feb. 7, which would have been just a few days ago. He said the transcript "may be of great interest to your members and your cause to unravel the organized crime ring that is controlling the markets."

Chris has contacted GATA's attorney, Merrill Davidoff to find out if they are connected enough to get the transcript.

Lordy, lordy what are we getting into

-- Goldie (Goldieee@Goldieeee.xcom), February 11, 2000.

Andy, is that really you??

-- Imso (lame@prepped.com), February 12, 2000.