-- Posted Wednesday, 10 September 2003 | Digg This Article
One of the most bullish things has occurred recently that just about guarantees gold’s continued prominence & resurgence in the world’s financial affairs.
When I first began to study the gold market in 1997 I learned that a type of “double speak” existed among the world’s financially elite. And learning to interpret this language will enable an individual to acquire an understanding of what is important & what are the financial trends of tomorrow.
Gold, most especially, comprises a language that in its own way is as peculiar & queer as Alan Greenspan’s double speak. The question I asked in 1997 & the question I will ask again in 2003 is simple.
What does gold mean for the mighty financial banking institutions of the world? We have merely to listen to their words & we can learn & discern very quickly gold’s true relevance.
The World Bank made a press statement this past week concerning their prediction for gold’s future. Ok guys & gals let’s listen to what the World Bank said last week
“Over the medium-term prices are expected to fall below $300 an ounce…” the World Bank said… Reuters, 9-3-2003
To me this statement represents absolute proof & certainty that gold will play an important & substantial role in the affairs of financial institutions & for many years.
First of all let’s educate ourselves how to interpret this strange financial “double speak” made so famous by Alan Greenspan.
Probably the best analogy of this language is George Orwell’s 1984. Without going into the overall plot of the book it is enough to understand that within the story every word has the opposite meaning than what the original definition implied. War means peace, to love really means to hate, etc, etc.
And how may we prove this is “doublespeak” with an OPPOSITE meaning? Listen to a statement from one of the top mining executives.
Sydney, Sept. 5 (Dow Jones) - Lihir Gold Ltd. managing director says he supports a recent high-profile prediction of a gold price of $450 a troy ounce within the next 12 months. …
Swan (heads Papua New Guinea-based and Australian-listed Lihir) questioned the thinking behind a report from the World Bank this week that said gold would fall to below $300 in the medium term. …
"It is an interesting comment... (because) you can look at production but you must also look at the reserves that sit behind immediate production," Swan told Dow Jones Newswires.
"Where are replacement reserves coming from," he asked. "It takes a number of years to bring mines on from the discovery stage," Swan said, adding that there simply isn’t enough in the way of new reserves to have a such a negative effect on gold. …
"I think the improvement that we have seen is sustainable," Swan said…
Nicholas Sinclair, Dow Jones Newswires, Gold Price Of $450 Possible -Lihir Gold Managing Director, 9-5-2003 http://sg.biz.yahoo.com/030905/15/3dyfa.html
And again what does it mean when a prestigious institution such as the World Bank takes their time out of their busy schedule to make a public statement that gold soon is going to go below 300 an ounce?
Just think here about the absolute absurdity that an institution this powerful & prestigious is taking the time to bring any attention to any single commodity. As soon as the word “gold” comes out of these guys’ mouths they might just as well be setting off a powerful alarm as they are demonstrating to the masses everywhere that gold is important.
Again, what are these guys telling us here?
Number one they are telling us to listen up & take notice of the product gold as they themselves are taking notice of GOLD. By their very discussion of gold in their official statement we can immediately discern that to the World Bank gold is very, very important.
Now let’s analyze their prediction that gold is soon to trade UNDER 300 an ounce. First of all who with any common sense & brains can make an accurate prediction about the price of any product that is still at the very beginning stages of a bull market?
What the World Bank is assuring those with ears to hear is that with certainty the price of gold will definitely continue to move HIGHER than 300 an ounce.
To understand this with clarity lets listen to what Tim Wood has to add concerning the World Bank’s statement. Tim Wood does a good job of interpreting their “double speak.”
Let’s listen to the venerable Tim Wood.
…the Bank keeps touting $300/oz as the iron law of gold pricing. On what basis does it make the claim, especially through several years of violent price swings? None, we suspect, beyond near-sightedness. Tim Wood, Mineweb, 9-4-2003
And let’s repeat the World Bank quote again so that we may understand what they are saying for our own clarity & understanding:
…prices are expected to fall below $300 an ounce…”
Yes, when the World Bank opens its mouth to talk about gold the real message is that’s its time to BUY gold & with every sense of urgency!!!
And from another corner of the world we have another financial institution proclaiming with a bull horn to “stand up & pay attention to gold!!!” And who other than the head of Germany’s Central Bank comes forward with an important statement about gold.
And what is their message?
Germany would sell gold… Bundesbank Ernst Welteke has said he wants the option of selling some of the central bank’s gold…Bloomberg, 9-4-2003
How many of you now reading this article is familiar with the real estate market?
If you are real estate literate then you understand that it is never an issue how MANY homes may be on sale in the market. The only issue is if there are buyers. And as long as there are BUYERS then this in itself is a sign of a very healthy housing market.
So the most powerful financial leader in Germany is giving gold prominence by not only talking about gold, but he also adds prominence to gold by proclaiming that there exist BUYERS waiting in the wings to BUY their gold.
My friends, lets begin to call a spade a spade!!!
Gold is significant & with every ounce of gold sold by central banks they are sending a message to the entire world of the vast & TREMENDOUS number of BUYERS that are waiting to BUY every ounce of gold they can get their hands on. If this is not a sign of a healthy market then I don’t know what is!?
Again, only concern yourself when an announcement is made to sell & no BUYER steps forth. But the fact remains that there are ALWAYS BUYERS ready to step forward to BUY gold.
Always remember that the selling of a product always demonstrates the strength & demand for that product as long as there are buyers.
Is gold an excellent investment?
YES!!!
And why? Because we have the largest & most prestigious banking institutions shouting with a bull horn telling the world to look & to pay attention to gold.
Is gold of great consequence?
Yes, because we have the highest financial leaders in the world proclaiming loudly that a STRONG demand exists for their gold!!!
Is gold significant?
I learned a long time ago that something is important based on how often that item is discussed & by whom. As long as we hear the Presidents of Central Banks & World Banks standing up & telling the world to take notice of their gold sale they are in the same breath sending a message to the entire world that now is the time to BUY!!!
I really wish that every Central Bank would announce even next week that they are wishing to SELL their gold. Why? Because as long as the central banks are informing the world at large that they are selling their gold in the same breath they are informing the world also that a STRONG & powerful market exists to take their gold off their hands!!!
And again let me repeat the simple & basic rules of the real estate market.
The strength of the real estate market is always determined by the number of BUYERS stepping forth to purchase homes.
Gold remains strong & relevant because there are ALWAYS BUYERS standing in line to purchase every last ounce that the central banks are willing to sell.
So let’s listen to that quote from the World Bank & the German Bundesbank President again!
…prices are expected to fall below $300 an ounce…” World Bank
Bundesbank Ernst Welteke has said he wants the option of selling some of the central bank’s gold… German Central Bank President
Remember, what these words are telling the world is to LOOK & pay attention to GOLD!!! They are saying: “Gold is important & we are not going to let you forget that fact!!!”
Jim Sinclair sums up all of this the best with the following words:
So their bad mouthing of gold is in all probability the most bullish thing I have heard in years. Jim Sinclair, 9-4-2003
Now as the World Bank directs the world to pay attention to gold now is the time to get into gold equities & before the World Bank successfully succeeds in driving the gold price even HIGHER!!!
Is gold going higher? Read the following & YOU decide!!!
GATA: Blanchard & Co.'s Gold Price-Fixing Lawsuit Against Barrick and Morgan Chase Can Proceed, 9-9-2003
DALLAS--(BUSINESS WIRE)--Sept. 9, 2003--Blanchard & Co.'s anti-trust lawsuit against Barrick Gold and J.P. Morgan Chase alleging that they conspired to control the price of gold can proceed to trial, a federal judge in New Orleans ruled in a decision released Monday.
The judge, Helen G. Berrigan, denied a "summary judgment" motion by Barrick and Morgan Chase to dismiss the lawsuit. She found that Blanchard, the New Orleans-based coin and bullion dealer, had proven its standing to sue and the appropriateness of its claims under the Sherman Act.
The judge pointedly rejected Barrick's claim to be immune from suit as the agent of central banks in the implementation of their policy on gold. …
http://www.gata.org/Blanchard_v_JPM_Order_9_3_03.pdf
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Comments?
David N. Vaughn
Gold Letter, Inc.
David4054@charter.net
Gold Letter Website
September 10, 2003
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-- Posted Wednesday, 10 September 2003 | Digg This Article
