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check out the last paragraph...

full story at:


maybe someone can help out with a link...




Gold is poised for greatness By Thom Calandra, CBS MarketWatch Last Update: 10:32 AM ET Feb 15, 2000 SAN FRANCISCO (CBS.MW) -- I'm collecting people. People who believe in gold. Companies, too.

Right now, there are 17 people in the world who believe in the once-precious metal. Last week, there were 12.

If you are one of the same 17 people who believed -- 20 months ago -- that oil prices would surpass $30 a barrel, then you have to believe in gold. Jay Taylor believes in gold. He's the president of Placer Dome (PDG: news, chart), a large gold-mining company in Canada. Placer Dome is stopping its forward sale of gold.

Forward sales of gold are crushing the metal. That's when a gold mining company freaks out about the falling price of the metal. So it borrows gold, then sells the stuff to lock in a good price.

The net selling of borrowed gold around the world -- by the metal's producers -- is a joke. What if the oil ministers at OPEC never got their act together and kept jamming all that crude down the pipelines of the world's economies? Do you think oil would be staging a sustained rally? See our futures contracts page.

Placer Dome just came out and said it won't hedge gold any more. It's about time. Net selling of borrowed gold, which trades for about $308 an ounce, boosts the world's total supply by about 10 percent. Add in central banks selling gold -- the banks have about 20,000 tons of the metal in their vaults -- and voila: gold is a stick-in-the-mud.

Gold has been a stick-in-the-mud for more than a decade. That's all about to change.

Up to this point, net selling of gold has been how gold companies got extra money -- by lending their gold and collecting an interest rate payment. It's not enough that demand for gold jewelry, especially from places like India and China, is exceeding production. The big gold-mining companies have had to play hedging games and leasing games to keep their shareholders happy.

That's like a computer chip company flooding the market for semiconductors. And then leasing the chips to boot! If I owned Intel, and its financial officers were engaging in that kind of activity, I'd bail.

Placer Dome is a believer. It will stop selling forward about 2 million ounces of gold. Others, like Barrick Gold, are also starting to come around. The halting of hedging will do more to boost shareholders' net worth than derivative games in the futures markets.

That's because in a day, or a week, or a month, or a year, something will spark the price of gold. It may be political turmoil in Germany. Or social strife in Austria. Perhaps the collapse of the global currency system as we know it. Maybe even $40-a-barrel oil....

-- mike (mike@knuckledragger.com), February 15, 2000


LinkCan't believe I am seeing this said in public.

-- canthappen (n@ysayer.com), February 15, 2000.

Cool--and that's CBS market watch--mainstream.

-- Mara (MaraWayne@aol.com), February 15, 2000.

TRANSLATION: When the tulip mania finally ends, you'd better have your money in tangible assets and not in some pipedream of an Internet startup.

-- (@ .), February 15, 2000.

Where have all the pollies gone?

-- No Polly (nopolly@hotmail.com), February 15, 2000.

I'm putting profits from palladium into gold. Yes!! Then when gold runs up, I'll put profits from gold into palladium. And then, when silver catches up ...

You can play Au, Ag, Pl, Pd on http://www.e-gold.com

-- A (A@AisA.com), February 15, 2000.

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