Copied from jibbo,19 Jan 2014 12:38
Who's great at finding great sip-its...They were strong-arming them (the producers) to lockin marginal or low-cost bullion buy warning of prices hundreds of dollars lower. We heard (a price target of) $800 being hung out there (by LBMA Chairman, Simon Weeks) to incentivize them (producers) to come and do some forward selling. Now, we’ve seen the aggressive manner in which these banks were forcing producer hedging in the last quarter of 2013. Well, these same banks were seeking to take forward delivery in mid-2014 at an unhedged plus-or-minus $1,200 price -- a price below most producers’ costs. But the key is the bullion banks are not hedging these forward buys. This is a classic ‘hurt and rescue’ strategy employed by the likes of Goldman Sachs and ScotiaMocatta, forcing producers to sell to them at a discount in order to obtain the necessary financing. Now, in 2014, it’s no coincidence that Moody’s downgraded the miners last week, which plays directly into the bullion banks’ hands. Talk about good timing (laughter ensues), with the threat of lower credit ratings and the squeeze on these producers already, it (the squeeze) has become even more aggressive. However, this move is backfiring. What’s the expression, Eric? ‘Pigs get fat, but hogs get slaughtered.’...felt this is very relevant with avm.