Negative Interest Rates

TIPS yields turned negative on the five-year Treasury Inflation-Protected Security. Goldman Sachs had made a prediction on the gold price reaching $1300/oz. U.S. if bullion could match the inverted real TIPS yield on the 10-year TIPS.

bloomberg

http://www.scribd.com/doc/35748775/Goldman-Gold

Conclusion: If 10-year TIPS yields reach zero, or go negative as the 5-year TIPS yield has, then the assumption is that bullion prices will adjust to reflect the decline in real rates reaching beyond ~$1780/oz. U.S.

BNN.ca

Bill Murphy, GATA

http://watch.bnn.ca/trading-day/september-2010/trading-day-september-24-2010/#clip352503

Art Hogan discussing bullion and miners

http://watch.bnn.ca/thursday#clip351237

Alamos Gold CEO forecasts ~$1800/oz. U.S.

http://watch.bnn.ca/thursday#clip349044

Jeffrey Christian, Managing Director, CPM Group

I find the outlook of Mr. Christian the most pessimistic outlook on the gold bull market, though gold average prices are important to miners. We are nowhere near the top, until 2015 if realterm.de is right. He also forgets what he's saying at one point. This fellow is in some sort of face-shaving exercise.

He raises an important point in attempting to downplay bull markets in gold, in that the important number will be the average gold price, not the peak price.

Note that Netolitzky has stood by a $900/oz. gold price average, much in the same light, because imo, he has a pessimistic outlook on the gold bull market. Mr. Christian's views are completely out of sync with the market.

http://watch.bnn.ca/thursday#clip349046

Monthly GBN.V Chart

We now have the highest monthly volume in company history this month, and there are still a few trading days left. You will notice that the 38¢ level is being heavily defended, though all of the technicals for the monthly chart say rally.

Imo, there is enough evidence in the trading logs to say that there is a large naked short interest in the stock that is interested in keeping the price from rising. How do they accomplish that? They sell a small amount of inventory to make it appear as if insiders are selling. They also rely on the slightest panic from shareholders to trade down the price with massive amounts of shares they never bought in the first place.

supersize: http://www.flickr.com/photos/11747277@N07/5021537844/sizes/l/in/photostream/

stockcharts.com

Insider Trading

Insider trading records for TD Waterhouse show unequivocally that there is no insider selling, only cashing in of warrants and buying at market. The SEDAR for the company shows that there was a large sale of shares in July, but no further insider sales, otherwise it must be reported in the alternative monthly report. This one large trade was done with a goal of raising capital to purchase warrants, thus the net is a larger holding.

So what we are seeing is a MARKER trade, where a holder of a large, leveraged position wants to determine the share price. On the TMX website, they don't differentiate, so it appears that insiders are selling, when in fact, they are loading up.

The TMX exchange is also a derivatives exchange, so equity swap holders insuring against the risk of the failure of the company(holding a fraudulent lien) will best be served by the appearance of insider selling when marker trades occur, when no insiders are actually selling.

The reason why they would do this is the prevent anyone from buying GBN.V shares, since the insider buying here outstrips any small amount of selling that actually occurred. Please see the insider report provided, look for 'Previous Day's Marker Trading.'

supersize:

http://www.flickr.com/photos/11747277@N07/5021538222/sizes/l/in/photostream/

tmxmoney.com

Ink Research insider report for GBN.V- Look under 'Previous Day's Marker Trading'(pdf)

Short Position

There is an actual, real short position in the stock, rather than an equity swap(fraudulent lien) held against the company. As normally listed in the security summary:

250,000 shares held short as of 15th. Sept.

Conclusions

There are two fundamentals at work here to assist in the advance of GBN.V shares. The decline of interest rates, and the rise of the gold price. Both of these are completely beyond the control of anyone. Should the discount rate decline, or the money market rate decline in Canada, this will lead to some very motivated buyers. The price of gold will correct eventually as will equities in the gold space, but these two fundamentals will drive the short interest out of the stock.

-F6