- There is no question in our mind that the extreme selling
in gold by Chase/Morgan/Goldman, which occurred for the third time at $322
and continues today at $305 from the same source, has the distinct purpose
of making sure that the enormous derivative on Morgan's books (as reported
to the U.S. Office of the Comptroller of the Currency) does not show the
loss that, we believe, would have existed at $322, as Morgan's credit standing
is certain to be re-evaluated.
-
- With the recent negative publicity concerning derivative
transactions at Morgan with Enron, it is
-
- reasonable to assume that debt-rating services will examine
Morgan's status. That has become normal procedure in such situations.
-
- Clearly this has created an uncomfortable position for
the gold bulls who are themselves not yet fully convinced of the integrity
of the gold bull market.
-
- We can tell you only that we believe in that integrity.
-
- The forces at hand that are motivating the gold market
lower, which is the derivative situation, are just what will contribute
to the final higher prices.
-
- We have told you that this is a battle of titans, and
the public so far has very little interest in the recent building of the
price of gold. This drama is very far from over. It's barely into Stage
2.
-
- ___
-
- James Sinclair is chairman of Tan Range Exploration and
a gold analyst with expertise in gold derivatives, gold hedges, gold trading,
and gold futures.
-
- Harry Schultz is editor of the International Harry Schultz
Letter.
-
- Courtesy of www.LeMetropoleCafe.com
|
