[DEBATE] : (Gold) Bugs were right about derivatives disaster, Citigroup analysts say

[Riaz K Tayob]

Bugs were right about derivatives disaster, Citigroup analysts say
    
Submitted by cpowell on 07:40AM ET Friday, September 19, 2008. Section: 
Daily Dispatches

10:30a ET Friday, September 19, 2008

Dear Friend of GATA and Gold:

MineWeb's Dorothy Kosich writes about a new report from Citigroup 
analysts John H. Hill and Graham Wark, who last year wrote a report 
acknowledging that central banks were strategically intervening in the 
gold market to suppress gold's price. You can find their report from 
last year here:

http://www.gata.org/files/CitigroupGoldReport092107.pdf

Now, Hill and Wark write, they're surprised that gold isn't already at 
$2,000 per ounce. Of course having already conceded central bank 
intervention, maybe they shouldn't be so surprised. But maybe it would 
be impossibly impolitic for them to write openly about intervention 
again now, especially since, as Kitco's Jon Nadler and Resource 
Investor's Tim Wood might assure us, the precious metals markets are the 
only markets in which central banks have NOT been intervening lately.

But the new report from Hill and Wark may be most satisfying to our side 
for another acknowledgement. As reported by Kosich, Hill and Wark write:

"It is notable that hard-core goldbugs have been proven correct in the 
decade-long contention that an overwhelmingly vast and complex pool of 
nested financial derivatives would ultimately result in cascading 
defaults and ruin for major portions of the banking system."

You can find the MineWeb account of the Citigroup report here:

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=62900&sn=Detail

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.