Loading ...Whatever unemployment numbers they come out with tomorrow you can bet they will be engineered so that the spin doctors can adjust them any way they want in the sheepies mind. I don’t trust anything the guv does or says anymore. They could tell me the sky is blue and I would have my doubts!! Yep, I would want confirmation!!
Dusty
The J Taylor interview …
EXPLAINING A SPOT DEFERRED CONTRACT …
Doyle: A normal short sale would be a lousy device to manipulate a market because a short sale is inherently speculative and dangerous. If you sell something short, the upside potential of your investment is limited but your downside is unlimited.
Taylor: Right. Your upside is limited because the price of an item can’t go below zero but in theory it can rise to infinity.
Doyle: Exactly. However, Barrick’s spot deferred sales contracts are super-short sales of gold – short sales on steroids. The gold used to make the short sale is borrowed by J.P. Morgan for Barrick’s account.
The borrowed gold is immediately sold into the market and the dollar proceeds from the sale of the gold are invested in money market instruments that produce a higher rate of return than the gold lease rate. From 1996 through 2001, J.P. Morgan loaned gold to Barrick at a lease rate of approximately 1.5%. J.P. Morgan then reinvested the proceeds at a rate of interest of approximately 6.5%. The 5% interest premium, or “contango” was profit to Barrick. If the price of gold fell, Barrick realized additional profit. A sweet deal. But what made the spot-deferred sales contracts truly extraordinary was the fact that, with most of the contracts, Barrick had 15 years to repay the borrowed gold; had no margin calls at any gold price; and had “evergreen” provisions that effectively restarted the 15-year term each year.
Taylor: Our subscribers are familiar with what is known as the gold-carry trade but that normally didn’t involve long-term loans and it normally would involve margin payment requirements if the gold price began to rise. Is this the only case you know of which involved such long term loans and no margin?
Doyle: It’s the only one we have been able to find. Barrick itself says its spot deferred contracts are unique. What is most interesting is that these began back in 1988 when Barrick described itself as a smaller, higher cost producer with a weak balance sheet. So you have to ask yourself the question, why would someone be willing to lend gold with no margin calls for ten years or more if he didn’t have the absolute certainty that it is going to be repaid? We don’t know what other kinds of credit enhancement were provided. We don’t know what the reasons were for J.P. Morgan extending such generous terms.
Taylor: Right. Why would J.P. Morgan make such seeming extraordinarily reckless loans to such a noncredit worthy borrower?
Doyle: J.P. Morgan does say in their answer to our complaint that they have legitimate business.
Now if that isn’t enough why not examine the various US and Canadian political elites that have been board members .
EXPLAINING PAST AND PRESENT BARRICK BOARD MEMBERS …
Doyle: Barrick actually has two boards - its Board of Directors and its “International Advisory Board.” Brian Mulroney, the former Prime Minister of Canada, is a member of Barrick’s Board of Directors and is the Chairman of Barrick’s International Advisory Board. Former President George Bush served as Honorary Senior Advisor to Barrick’s International Advisory Board. Members of that Board have included Karl Otto Pohl, former President of the German central bank; Senator Howard H. Baker, a former Majority Leader of the U.S. Senate and White House Chief of Staff; Senator William Cohen, a former U.S. Secretary of Defense; Andrew Young, a former U.S. Ambassador to the United Nations and Mayor of Atlanta; and Vernon Jordan, a former President of the Urban League, NAACP Field Secretary and a former Senior Partner in Akin, Gump, Strauss and Feld.
Taylor: Wasn’t there a CIA connection with Barrick?
Doyle: The CIA connection was actually through Barrick’s initial investors. At its inception, Barrick’s principal investors were Saudi Arabians who had close ties to the Saudi Intelligence Services, or to the CIA, or to both. Those Saudi Investors were Sheikh Kamal Adham, the head of Saudi Intelligent Services at the same time that President Bush was head of the CIA; Adnan Khashoggi, the first of the Saudi investors in Barrick; and Prince Nawaf bin Abdul Aziz, one of the biggest of the initial shareholders in Barrick and now head of Saudi Intelligence Services. Sheikh Adham was the CIA’s principal liaison to the Middle East and was so closely tied to the CIA that he even had an agency codename: “Tumbleweed.”
Taylor: What do these colorful folks know about the mining industry? I’m sure Barrick has had some technically competent folks on their board who know the mining industry. But many of these people of influence in the company appear not to have any substantial knowledge of the mining industry. Herbert Hoover was a mining engineer so his addition to a mining company board might make sense. But George Bush? Brian Mulroney?
Doyle: We failed to find any connection that the Advisory Board members had with mining, mineral development or geological engineering.
Now lets look at the JP Morgan and Barrick Gold connection a little closer …
EXPLAINING THE BEGINNINGS OF THE JP MORGAN & BARRICK UNION …
Doyle: Barrick and J.P. Morgan have a contractual relationship through the spot deferred sales contracts and the master trading agreements that govern the operation of those spot deferred contracts. During the course of the trial of the motions to dismiss that were filed by J.P. Morgan, they claimed that Blanchard had failed to allege a viable economic motive for them to participate in the conspiracy with Barrick. What Blanchard discovered and included in our later filings was that, from 1996 though 2001, J.P. Morgan had an ownership interest in Barrick! To give you a bit of background – it will give you whiplash following this, but here it is.
The controlling shareholder of Barrick in 1994 was Horsham. In 1994, Horsham joined with Argo Partnership, LP, which was an investment partnership in which J.P. Morgan Securities owned a partnership interest, and acquired a controlling interest in Trizec Corporation. In 1996, the remaining equity in Trizec Corp was acquired by Horsham and the interests of Horsham and Argo were merged to form TrizecHahn Corporation, which became the controlling shareholder of Barrick.
Taylor: So J.P. Morgan then actually had a controlling interest in Barrick?
Doyle: TrizecHahn did. And J.P. Morgan – through Argo – became a significant beneficial owner in Trizec Hahn. At the same time, the Managing Director of J.P. Morgan Capital Corp became a director of TrizecHahn and also served as a member of its audit and executive committees. Securities and Exchange Commission filings show that the ownership in Argo were held by J.P. Morgan Capital Corp and J.P. Morgan Securities Inc. In its 1999 Annual Report, TrizecHahn said that it realized $1.3 billion or 1,600% on its original investment in Barrick!
Obviously there is collusion going on here … In the words of Bill O’Reilley of the NO SPIN Factor … What say you?
Entire J Taylor interview link: http://www.lemetropolecafe.com/img2003/DoyleInterview1203.pdf
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About Stephen Wellman: Stephen Wellman is now an orchid farmer on the Big Island of Hawaii. Mr. Wellman learned all he knows about mining and geology from his Father who was a top geophysicist with Chevron Oil for 45 years and one of the founders of the Lake Maracaibo oil field in Venezuela as well as the Barrow Island oil field in Western Australia. His knowledge in contracts arises from running an electrical contracting business in the San Francisco, California area for 20 years doing public works projects involving the largest school districts in California as well as large prison projects for the State Of California and the Department of Corrections. Mr. Wellman has been involved in the gold and silver markets as an investor since 1979.
( are the numbers skewed by all the loans made by the fed in late December? Are lenders really stupid enough to start buying this stuff????)
Commercial paper backed by mortgages, credit-card loans and other assets rose $26.3 billion to a seasonally adjusted $773.8 billion for the week ended Jan. 2, the Federal Reserve in Washington said today.
The 3.5 percent increase, the biggest gain in at least seven years, snapped a 20-week losing streak that began as losses from subprime mortgages caused a retreat from all but the safest government debt. Yields on the paper due in 30 days posted their biggest weekly decline in at least a decade as investors became more willing to hold the debt.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.eCRuUhEyfY&refer=home
“It is better to be divided by truth than to be united in error.”
— Adrian Rodgers
“Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity.”
- Martin Luther King Jr.
~ ~ ~ ~
JBI
PS -
………”Rather than love, than money, than fame, give me truth.”
………… –Thoreau
Personally, I can’t get out of this asylm fast enough. Figure have until the next socialist president is in office a year or so to make the great escape..hopefully with me stash of gold. Still, Ron Paul at this point has 10% of votes. I only wish he were younger..in another few years this country will be ready for him.
I try to limit my oil stories so as not to distract the troops from showing me how to make money in Gold. Besides, I am a boring writer who fails to use enough adjectives to paint an interesting mind picture. My training is in writing reports, facts and geologic descriptions, and then edited by two secretaries who each worked for me twenty years plus, not the wild, unbelieveable descriptions of things like well blowouts, or hearing casual comments that I immediately recognized as being worth many ounces of gold into my pocket. It has been a fun journey.
If you will go to IMDB (upper right corner of this page) under Energy & Uranium you will find the hiding place of “How Geologists find oil” A few boring true stories out of an exciting life adventure. A work in progress that I add to occasionally, unedited bad spelling and all. My memoirs were written for my grandsons and are too personal to publish. Deadeye
I don’t know. If the numbers are stronger than expected, then there goes any more rate cuts? Either way, a vicious, very vicious web of LIES it will be once again, I am sure.
JBI
Yes, I remember you mentioning that fund before. I gata believe it’s a winner, and I’m not saying that just to make you feel better. The BUBBLE of the century, imo. It deflates and you win, BIG TIME! Keep us posted and GOOD LUCK!
JBI
I did not now there were so many pinheads and airheads in Iowa. And then we turn around and blame it all on the same scumbags that we put in office. What a vicious circle of LIES we live in. SPIT!!!!!
JBI
PS - Heeeeeeeeeellllllooooooooo, Iowans. Are you having the same kind of problems we had a few years ago in Florida. You really meant to vote for Dr Ron Paul, didn’t you? Geeeeez!
“Sometimes the majority only means that all the fools are on the same side.”
……………… – Unknown
In the freezing Sunshine State
Ah, the employment numbers tomorrow! Now that should be an interesting report from TPTB and 1:30 later we have the ISM Service number. They kinda need a BETTER THAN expected employment number to keep the SM from totally tanking - we shall see!
I’ve got a lot riding on this inverse emerging market fund. It’s hard to imagine it was over 200 less then 5 years ago. bring it on…
It’s coming, I think. There about 3 or 4 indices in Asia that look like crap. HORRIBLE! They are setting the stage, I think.
JBI
PS - Remember that we need to buy some more ABX puts tomorrow. {G}
Check out what happens to the Nikkei when the yen rises (green line below the index)
Imagine the blood if the DJIA fell 5% in one day… haaa recession would be in the present