We are all peeved as hell Mihaly:
hi bill,
just a message...because with today’s action i am pissed as hell....just like the rest I suppose. With all the fundamental information, u would expect that gold will perform well...or at least neutral. The last couple of months the market reaction of gold was in complete disconnect with the fundamentals. As you said many times, market action makes market news. You might ask, why are you so pissed...well, because of this:
I have been reading for many years now central banking documents....all sorts. I even took the time too figure out how the hell these central banks account for there reserves/swaps/repos/reverse repos/deposits/loans. As you can imagine, central banking accounting is not easy and it took some time. A few months ago, I figured out how they report these swaps/repos and loans according to IMF regulations. The data can be found on the IMF site:
http://www.imf.org/external/np/sta/ir/colist.htm
and is called Data Template on International Reserves and Foreign Currency Liquidity
So you would think that the central banks fill out this form....well:
They dont have to: Countries participating in this endeavor do so on a voluntary basis.
Snd even worse, in the book "How countries manage reserve assets''(central banking publications), on page 259 it is stated that there are several shortcomings with the SDDS and the data template. The 3 auteurs (from the Safeguards Assessments Division, IMF), see the biggest shortcoming as (quote):
"Finally, and most important, the data contained in the SDDS are NOT audited by an independent third party."
So no wonder that the United States has a lot of zeros in the data template....Another point, I asked the Central Bank of Belgium to comment on their data in the IMF sheet. As I said in the past, at an annual shareholders meeting, it was said by the central bank that there is no more gold in the Belgium vaults (not on print!). This can also be seen in the sheet. I emailed the Bank 14th of december 2004, and I am still waiting for an answer.
According to the sheet, the goldswap position would be 1,134.87 and goldloans would be 2,142.36 with a total gold value of 3,529.42...which would mean almost everything is gone(everything in Millions of US Dollars).
No answer...voluntary data....data not audited by independent party......yeah.....isn't central bank accounting great? There is not much to find, if they dont have to tell. And that's why i am pissed...
Although central banks are becoming more and more transparent....it seems like they can still lie about the interest rate.....and gold.
greetz (from the Netherlands)
mihaly
Mihaly sent me the above email right BEFORE I served up the following in last night’s MIDAS:
