Welcome To The 300 Club HUB On AGORACOM
We may not make much money, but we sure have a lot of fun!
Message: Bits and Pieces relating to Mining Movements.
Interviewed Monday this week on the "Trading Day" program of Business News Networkin Canada, former Federal Reserve Governor Lyle Gramley hinted that a big upward revaluation of gold may figure heavily in the Fed's attempt to rescue the U.S. economy. The program's guest host, Niall Ferguson, an author and history professor at Harvard, asked Gramley,now senior adviser at Stanford Group in Houston, about the seemingly grotesque expansion of the Fed's balance sheet in recent months. Ferguson Asked: "I've heard it said that the Fed has turned into a government-owned hedge fund, leveraged at 50 to 1. Do you feel nervous about what this might actually do to the Fed's reputation?" Gramley Replied: "I think you have to reckon with the fact that one of the Fed's assets is gold certificates, which are priced, as I remember, at$42 an ounce, and if we were to price them at market prices, the Fed's leverage would look a lot less than it is now." While valuing the U.S. government's claimed gold reserves at today's Comex closing price of around $822 per ounce instead of the government antique bookkeeping entry of $42.22 per ounce would indeed vastly expand the government's monetary assets, it might not be enough to offset the liabilities and guarantees the government lately has taken on. But the job might be done by revaluing the gold to $5,000 or $10,000 per ounce, as the British economist Peter Millar speculated two years ago might be necessary to prevent debt deflation ....................................... ATLANTA (Resource Investor.com) -- While premiums for physical gold and silver remain stronger than an acre of garlic (more about premiums at the end of this report); while shares of big U.S. mining companies fared much better and both gold and silver advanced, shares of the smaller, less liquid Canadian miners and explorers remained comatose in the three weeks since the last full Got Gold Report. That may be about to change, however, if the underlying action on quote screens is any guide. It may just be a case of wishful thinking, but dang if we didn't’t see some of the small Canadian resource companies building larger bids underneath and taking a few tentative steps into the offer over the past two weeks. One wouldn’t know that there was anything happening just by looking at the CDNX, the S&P TSX/Venture Composite Index. The index did manage to turn in a “green” week this past week, but not all that big of one, just up 5.0%, closing at 718.54. By comparison, the HUI surged almost 23% to close at 261.30. The real action is what has been happening for those of us glued to Level II quote screens following a number of the Canadian miners in more or less real time. What has been happening with quite a few of them is that very large bids are being put up just underneath the trading. That’s new. “Stink bids,” yes; cheap bids, yes, but we are talking cheap stink bids in size. Not just a few measly thousand shares, but much larger, “I mean business” sized bids of tens of thousands or hundreds of thousands of shares even on the cheaper, more risky issues. The action certainly has changed from a month ago when bids were puny, weak or virtually absent. What has changed is that now the stink bidders are getting much more serious about taking the shares being thrown out by last minute tax dodging sellers. It shouldn't’t be all that long before a little competition breaks out among the bidders. That’s if a wheel doesn’t once again fall off the global financial or geopolitical wagons. ATLANTA (Resource Investor.com) -- While premiums for physical gold and silver remain stronger than an acre of garlic (more about premiums at the end of this report); while shares of big U.S. mining companies fared much better and both gold and silver advanced, shares of the smaller, less liquid Canadian miners and explorers remained comatose in the three weeks since the last full Got Gold Report. That may be about to change, however, if the underlying action on quote screens is any guide. It may just be a case of wishful thinking, but dang if we didn’t see some of the small Canadian resource companies building larger bids underneath and taking a few tentative steps into the offer over the past two weeks. One wouldn’t know that there was anything happening just by looking at the CDNX, the S&P TSX/Venture Composite Index. The index did manage to turn in a “green” week this past week, but not all that big of one, just up 5.0%, closing at 718.54. By comparison, the HUI surged almost 23% to close at 261.30. The real action is what has been happening for those of us glued to Level II quote screens following a number of the Canadian miners in more or less real time. What has been happening with quite a few of them is that very large bids are being put up just underneath the trading. That’s new. “Stink bids,” yes; cheap bids, yes, but we are talking cheap stink bids in size. Not just a few measly thousand shares, but much larger, “I mean business” sized bids of tens of thousands or hundreds of thousands of shares even on the cheaper, more risky issues. The action certainly has changed from a month ago when bids were puny, weak or virtually absent. What has changed is that now the stink bidders are getting much more serious about taking the shares being thrown out by last minute tax dodging sellers. It shouldn't’t be all that long before a little competition breaks out among the bidders. That’s if a wheel doesn’t once again fall off the global financial or geopolitical wagons. Odds and Ends The gold:silver ratio (GSR), which reached a 16-year high in October of 88 ounces of silver to one ounce of gold, remains quite high. As of the Friday close the GSR was just over 80 ounces of silver to one ounce of gold using cash market closing figures. At a ratio of 80:1 robust conversion of gold into silver is almost certainly underway because it is quite rare to be able to exchange gold for silver at that ratio or higher. However, about the only place one can actually convert gold to silver at that ratio is on the futures markets themselves. Premiums for silver products outside of the heavily distorted futures markets are too high to allow conversion near the spot prices. Since October 17, the inventory of silver metal of COMEX depositories has fallen considerably, down 6,755,230 to 126,826,996 ounces as of December 12, with 77,756,068 ounces of that amount remaining in the “Registered” category. Silver in the Registered category is actually deliverable for COMEX contracts. As of December 12, there had been 5,936 delivery notices for the December contract, or just under 30 million ounces worth. Source for data NYMEX.com Repeating from previous reports: So long as the futures markets continue to grossly under price silver relative to the popular physical markets, we can expect the trend of silver metal exiting the COMEX for the real physical markets to continue and probably to accelerate into December. Premiums Remain Strong Premiums for physical gold and silver remained strong, as reported by the Coin Dealer Newsletter (CDN), a very respected and widely used source by the coin and bullion industry on December 5. U.S. one-ounce gold eagles continued to see dealer to dealer premiums of $46.50 bid over spot gold of $774.60 on December 5. ....................................... Minister of Economic Development and Trade, Akylbek Zhaparov confirmed that the negotiations with CG are almost completed. Akylbek says “The Head of State Geology and Resources Agency Kapar Kurmanaliev informed me that they were able to arrive at successful outcome in the negotiations” and he hopes that the results are to be announced shortly. Akylbek affirmed that he believes nationalization to be off the agenda given that “the state of KG does not have enough muscle to sustain Kumtor gold production on its own”. He pointed out that Kumtor production is very technologically advanced and the state will struggle to replace the key highly qualified engineers. He further added that even if the nationalization was theoretically feasible, practically the state of KG would be faced with multiple international lawsuits. He emphasized that the government will be pitted against an insurance company as the “founders are insured against political risk and legislative risk”. He added that nationalization will trigger reimbursement of the founders, thus making the price unacceptably high for KG. Akylbek finished by stating that ‘a lean compromise is better than a fat lawsuit’. He suggested it’s time to learn to defend one’s interest through constructive negotiations.
Former Fed governor hints at big upward revaluation of gold
Sat, 2008-12-13 02:25. Section: Daily Dispatches
Last weeks headlines in Kyrgyz newspaper .. with regards to price of CG-T
New Message
Please
login
to post a reply