Barrick, agent of the central banks, affects to denounce one of them


8:26p ET Tuesday, August 28, 2007

Dear Friend of GATA and Gold:

Appended is a Reuters story with plenty of cynical posing for you. It quotes Barrick Gold CEO Greg Wilkins as complaining that "the Bank of England tried to put the gold mining industry out of business back in 1999," which is when the central bank sold hundreds of tonnes of its gold reserves at auctions designed to get the lowest possible price.

Wilkins neglects to mention that while the Bank of England was selling its gold, Barrick was borrowing hundreds of tonnes of central bank gold and selling them short into the market, assured that the company need not repay the gold for 15 years or more, if ever. (That is, the central bank gold loaned to Barrick was more of a gift than a loan -- provided that Barrick used the gift to do exactly what its CEO now condemns the Bank of England for doing, destroying the gold mining industry.)

In shorting gold Barrick even proclaimed, in a filing in U.S. District Court in New Orleans, that it was the very agent of central banks like the Bank of England:

This shorting of gold, engineered by the central banks and accomplished in large part through their agent Barrick, enabled that company to acquire two venerable gold mining companies, Homestake Mining and Placer Dome Gold, on the cheap amid depressed gold prices, in anticipation of the gradual unwinding of the gold carry trade.

So Barrick is denouncing a central bank?

Barrick is a crucial part of central banking -- the company said so itself, even if it doesn't want the investment world to remember.

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

* * *

Barrick Gold Chief
Sees No Slowdown
in U.S. Demand

From Reuters
Tuesday, August 28, 2007

NEW YORK -- The head of the world's largest gold mining company said on Tuesday that despite the potential for a U.S. recession, there was no sign of it yet in the market for gold jewelry.

"There has been no slowdown in gold jewelry demand in the U.S. that we've seen to date," said Greg Wilkins, president and chief executive officer of Barrick Gold Corp.

He said his principal concern was what is going to happen to the general U.S. economy. "We've seen a slowdown in housing and a potential for recession and that affects people's purchases of luxury goods, and jewelry is a luxury good.

"So there could be some softening of demand, but we don't see it more than perhaps any analyst on the street."

Appearing on cable television's CNBC, on which he denied a market rumor that Canada's Barrick was interested in acquiring U.S. rival Newmont Mining Corp., Wilkins was asked what impact inflation might have on the price of gold, which was selling for about $668 per ounce on Tuesday.

"When people talk about inflation and deflation, they're really talking about investor motivation for owning gold," he said. "Investor motivation is only one component of gold ownership."

He noted about 80 percent of the gold produced is consumed through jewelry making and some industrial applications.

"Investment demand, for whatever reason, be it deflation, inflation, flight to quality safe haven, they're just investor motivations. I think the bulk of the market is actually very strong."

In the second quarter, World Gold Council statistics show jewelry demand was up 37 percent, with some $14.5 billion in sales, he said. "On the supply side, it is challenging. Supply is declining, so the supply-demand imbalance is very positive for the gold price."

Asked about the state of the industry, Wilkins noted that Barrick became the world's biggest gold producer, leapfrogging Newmont, through its acquisition of Placer Dome in 2005.

But "the industry has really struggled from a lack of investment," he said. "It's fine to talk about great gold prices for the last couple of years, but the Bank of England tried to put the gold mining industry out of business back in 1999 and there was very little adjustment for many years."

He was referring to the British central bank's restructuring of reserves through auctions of gold between July 1999 and March 2002, in which about 395 tons were sold.

"It takes a long time to discover new opportunities and there's just not a lot out there of particular interest," Wilkins said, when asked if Barrick was looking at other acquisitions.

* * *

Join GATA at these conferences:

The Silver Summit
Thursday-Friday, September 20-21, 2007
Coeur d'Alene, Idaho

New Orleans Investment Conference
Sunday-Thursday, October 21-25, 2007
New Orleans, Louisiana

* * *

Help Keep GATA Going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at

GATA is grateful for financial contributions, which are federally tax-deductible in the United States.