Reg Howe: Gold derivatives -- The tide turns


11:15p ET Saturday, May 23, 2009

Dear Friend of GATA and Gold:

Reginald H. Howe, principal in Golden Sextant Advisors, litigant in the groundbreaking gold price-fixing lawsuit in federal court in Boston in 2000, and consultant to GATA, has reviewed the latest report from the Bank for International Settlements and writes that gold derivatives have fallen sharply in value -- except among U.S. banks, where the decline is modest.

According to Howe, the new BIS data suggests that the worldwide bank short position in gold "was reduced by some 2,000 tonnes in the last half of 2008, and that as a consequence of the fall financial crisis, official gold lending is now definitely on the ebb even if, like a modern King Canute, the Federal Reserve and JP Morgan Chase are trying to stand against the tide."

Howe sees great stress in the gold market, a serious possibility of its failure, and the likelihood that gold will be restored to the center of the world financial system.

His analysis is headlined "Gold Derivatives: The Tide Turns," and you can find it at Golden Sextant here:

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

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