brooooocie and gobbo, page-11

Interesting point from Adrian Douglas re The Privateer

To wit

The second encouraging gold bugs: The lease rate for gold. This is the cost
of borrowing gold.

Thirty years ago, this was a detail, but with the huge expansion of lending
to gold mining companies in the 1980s it became a big deal. In particular it
was an important part of the argument of outfits like Gold Anti-Trust Action
Committee (GATA), which argued that secretive activity in the gold market by
central banks was crucial to understanding what was happening with gold.

In the past few days a strange thing has happened. Australia's The Privateer
says, "the shorter term (one and two-month) rates have actually gone into
negative territory this week."

In other words, gold is being supplied to the market by the central banks.
The Privateer goes on: "We do not recall a previous instance of this, and
there certainly has not been one since the cold bull market began in
2001-02. ...

"We have not -- until now -- seen a situation in which the central banks are
actually paying the bullion banks, hedge funds, gold miners, et al. to
borrow the stuff. And please don't forget that, in this context, leasing
gold is actually 'shorting' gold. Gold is not 'leased' to be hoarded; it is
'leased' to be sold for something that pays a far higher rate of interest.
... The practice of 'leasing gold -- and silver' by the central banks has
been one of their best means of suppressing the prices of these precious
metals for a long time."

Interestingly The Privateer's wonderful $US 5x3 Point and figure chart
withstood this week's slump. See chart:

http://www.the-privateer.com/chart/gold-pf.html

Goldbug conclusion: Central banks, led surreptitiously by the Fed, are
supplying physical gold to the market. And wise heads like the Indians are
buying it.