GOLD & SILVER POTPOURRI

April 22, 2002

Pressure is building on the Indian federal government to give clearance for setting up a gold exchange for spot, forward and futures trading in precious metals. The government supports the idea of the 13 commercial banks' licenses to import gold sterling and starting to trade among themselves and also with trading on a limited scale preceding the constitutions of an exchange. The World Gold Fantasy Council says Indian gold demand was 855.2 tons in 2001 the same as 2000. As a share of imports it was up 11%. AngloGold is aggressively expediting the run down of its hedge book. They closed 1.7 million ounces in the last quarter of 2001, leaving it with a hedge book (short) of 14.6 million ounces. A start but nothing to write home about. Remember these people are part of the criminal horde that cost gold and gold shareowners billions of dollars in losses. Harmony closed the balance of its Randfontein hedge book at net cost after a tax of R125 million or $1.1 million. Harmony is now flat gold shorts.

The World (Fantasy) Gold Council has a new president, Mr. C.M.T. Thompson, Chairman of Gold Fields. Let's hope he moves forward in a manner that allows us to inform the public that gold is an investment as well as jewelry. We believe Japan is moving nearer and nearer to a financial collapse. The slowdown in the US recovery later this year could prove to be the catalyst. There is a strong possibility we could see $300 billion in fresh gold buying over the next year. There will be no letup. Japan's economy is self-destructing. It's systemic and cannot now be stopped. Government debt is over 130% of GDP and is headed to 140%. The only way the government can now go is to print money, yet not even that will help. The public is gaining knowledge of the investment character of gold and that will become more widespread as the year wears on. Gold prices have only one way to go and that's up. Anglo-Gold tells us the big gold discoveries of the past 20 years will run dry and they are rapidly reducing their hedge positions. They said "over the next 10-15 years, new mine supply is likely to be neutral or negative than it is to increase as it did over the past 15 years." Mining output probably will fall from 2,595 tonnes last year to 2570 tonnes this year. A drop of 25 tonnes when jewelry demand alone is 3,000 tonnes. Over the next 10 years supply will fall some 30% to 1,820 tons. As a long-term investment it shows you, just based on fundamentals, how powerful gold, silver and platinum will be. Freeport McMoran's gold production from Indonesia fell 50% during the first quarter.

We repeat sell Barrick Gold, Placer Dome and AngloGold. Switch to *Agnico-Eagle (AEM-NYSE) and *Goldcorp (GG-NYSE) immediately. When the short squeeze comes Barrick, Placer and Anglo will have some major problems.

Japanese gold purchases in March were similar to January and down from February, but they were still five times greater than they were a year ago. Goldman Sachs predicted gold will remain at $300 an ounce for 2002 and go to $325 in 2003. More misinformation by a gold price manipulator.

Japan may drive gold price to $330

Dudley White- April 16, 2002
Melbourne - Gold prices might rise to $330 an ounce this year, the highest since 1999, as demand gained in Japan and violence in the Middle East would.

Goldman Sachs Group this month raised its estimate of the average gold price this year by 5.2 percent to $300 and its long-term forecast to $325.

Spot gold has averaged $279.31 an ounce so far in 2002. Gold prices have gained by as much as one-tenth this year as Japanese government limits on bank deposit insurance spurred a tripling of demand for gold from Japanese investors. The yen price of gold has soared.

Speculation that prices will rise further encouraged companies such as Newmont Mining, the world's biggest gold producer, to spend $8.5 billion in the past six months buying new mines.

"What you're getting in Japan is a real crisis of confidence in their banking system," said Brian Bath, the managing director of Australian Gold Refineries, which is half-owned by Newmont and refines two-thirds of Australia's gold production. "People are going into gold coins or any other gold as a defense against any concerns that they have."

Japanese investors bought about 45 tons of gold in the first quarter, up from 12.6 tons a year earlier, the World Gold Council said. The jumpoccurred before the Japanese government cut insurance coverage on savings accounts of more than Y10 million (about R850 000) from April 1. "The Japanese have lost confidence in political leaders to right their economic woes and are buying gold by the bucket load," said Tamara Stevens, the Australian Gold Council's chief executive.

Japanese demand might rise again in early 2003 if banking rules were changed again, analysts said. The nation's investors were concerned about the weakness among Japan's banks, which hold about Y151 trillion in problem loans. "The gold boom may emerge again before next April, when the government will expand its limit to other deposits," said Nobuyuki Kudo, a gold researcher at Ace Koeki, a Tokyo-based commodity futures brokerage.

"The rising trend in gold demand from Japanese investors will continue." The outlook for demand is on the agenda as the world's biggest gold producers meet in Melbourne for the Australian Gold Conference, which started yesterday and ends today.

Barrick Gold and Placer Dome are due to attend the conference, while AngloGold officials will attend a meeting of the World Gold Council, also in Melbourne tomorrow. "The underestimation of US interest rates, Japanese investment buying and higher-than-expected Middle East tensions are the three main drivers of our 2002 forecast and for recent gold price strength," Goldman analyst Daniel McConvey said in a note to clients.

Concern that the conflict between Israel and the Palestinians may disrupt financial markets and drive stock prices lower encouraged investors to buy gold, fuelling the rally in prices. Still, if gold prices rose too high they might encourage sales by central banks, capping further rallies, analysts said. Central banks hold 11 years of global gold production. - Bloomberg

I wonder how long it will be before J.P Morgan is dragged in front of Congress to answer for their role in the scandalous gold fraud?

J.P. Morgan Asked By Congress to Explain Enron Loans
By Mark Lake

New York, April 16 (Bloomberg) -- J.P. Morgan Chase & Co. helped Enron Corp. raise $1 billion in 1999 and 2000 in transactions that let the company avoid reporting loans as debt. Now, the bank is suing the bankrupt energy trader to recover the money and Congress is asking for explanations. J.P. Morgan arranged for at least four banks to provide funds to Enron through five partnerships, including one that allowed Enron to repay loans on the last day of a month and borrow again the next day. Rep. Henry Waxman, a California Democrat, charged yesterday the cycle gave Enron a way to portray the debt as satisfied when accounts were tallied at month's end.

The House Energy and Commerce Committee is probing whether banks played a role in Enron's collapse. The committee last month asked 10 banks, including J.P. Morgan, Merrill Lynch & Co. and Citigroup Inc. about financing partnerships through which the company concealed debts and inflated earnings. J.P. Morgan's transactions "do not appear to have served a legitimate economic purpose," Waxman wrote to the bank's chief executive, William B. Harrison Jr., in a letter released by Waxman's office. "Rather, on their face, they appear to have been designed to allow Enron to covertly borrow hundreds of millions of dollars."



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