Metals With McGuirk: Truth is Sometimes Stranger than Fiction
The metals did a great job holding that $488 level on Wednesday.
Gold and silver have been rather quiet the last 36 hours for the obvious reasons. The metals did a great job holding that $488 level on Wednesday as there were plenty of excuses for a break down in price. The physical market has continued to be robust although I would expect some downward pressure again early next week, all things being equal. There is a serous seller sitting around $495 and it would surprise me if it was anyone apart from a European Central bank. They ditched nearly 20 tonnes last week and we know they can ditch up to 500 tonnes per annum under WA II. At that rate, they'll be done selling by May next year.
Plenty being made of Central Bank buying and the Russians have certainly opened a can of worms when they discussed doubling their reserves. Imagine Japan and China or a few other Asian CBs lifting their gold holdings to 10% of reserves. Don't discount such a measure especially as the flight to quality continues to gather momentum. Gold is rising in EVERY currency which we have spoken about ad nauseum.
The interesting part of Wednesday's action was the across the board sell-off of ALL gold stocks. Some were down 5% on the day. I suspect maybe some traders went home long the metal and hedged by ditching some equities. The equities are a beast unto themselves and sometimes it is a little better to just close your eyes, turn off the computer and jump into bed!
Illiquidity in the next 24 hours could throw up a few surprises, should anyone want to shove the market one way or the other so be wary.
As it will be such a quiet day from what I can see, I thought a little light reading may be in order. I will expand on an incident that occurred in Brussels in 1988 when I was on a rugby tour of Europe, that I made mention of in a column a month or so ago...
I was part of a 30-man touring rugby squad that left Australia in October 1988. We were away for a month and it was a very long month! We played a game that was televised on Belgian TV, as we were the first Aussie team to play there and were treated magnificently by the locals. We played well and won the match comfortably but were most impressed by the "pre-match" match which was played by women. I had never seen women play rugby before! The after match social was quite something! Some Aussie girls had heard of the match and traveled up from Paris to see the game. It was quite a big deal with the Aussie Ambassador and other dignitaries and stuff all turning out for the event.
Anyway, after a very long evening enjoying the local hospitality and more than our fair share of Heineken, me and two other guys on the team decided we hadn't had enough fraternization with the locals and decided to hunt out a local nightclub. My two mates were rather inebriated (unlike myself) but in very good humor. To set the scene, John is 6'2" NZ Maori and former nightclub bouncer while Mick played rugby for the Australian Barbarians and knows his way around the block. We were wearing our No 1's (our tour blazers and ties etc) so we were all dressed up.
We were wandering around Brussels on these old cobble-stone streets trying to find the Grand Place 'cuz we knew where we were going if we could find it. Anyone who has been to Brussels will tell you that it is near impossible to miss the Grand Place. We were on tour and funds were tight, so no cabs for us. We knew we were wandering in the right direction. The streets were narrow and I saw these two blokes wandering towards us. They crossed the street about 100 yards ahead of us and I thought that was odd. They also had been drinking from the looks of their gait.
We yielded, allowing them to pass through us when one of them gave Mick a shoulder charge on the way past. We stopped. They stopped. Mick said something in English and the other blokes gobbed off in what we later found out to be German. I just stood back and kept my bloody mouth shut. Next second John yells "Gun" and pounces on the other guy. Mick squared off with his opponent and it was "on for young and old." All I saw was John grab this blokes hand and pull it from his jacket and it had a bloody hand-gun in it. We Aussies never see guns like that. These guys picked the wrong people to try and "roll." John wrestled the gun from the bloke and it fell to the floor, simultaneously bashing this guys head into a car hood. I picked it up. Mick was doing just fine looking after his antagonist so I just made sure no one got the gun and ran interference for the lads. It was a good stoush.
It seemed to go on for quite some time when I heard the sounds of sirens wailing in the distance. I was telling the lads to just forget these blokes and to leg-it, as we were traveling to Paris the next day. I chucked the gun under a car and we had walked about 50 yards away when all hell broke loose. Anyway, apparently there was a police strike at the time and the law enforcement was left to the gendarmes (military police). They got there pretty quickly in their Audi Quattro's and when they jumped out with sub-machine guns and told us in no uncertain terms to stop and drop! At that moment, I reckoned we might be in a bit of strife.
It appears that an old man had heard the commotion from his apartment and had peeped out his window and saw 2 guys in blazers beating the shit out of two guys, while another guy with the same coat held a gun. That was all the gendarmes knew when they arrived. They collared all five of us and lined us up against the wall, legs spread and hands on the wall--you know all the stuff you see on TV. They found the gun, courtesy of the old man. The cops didn't speak English and we spoke no Flemish or French. The blokes who caused the biff looked like they had been in a car wreck. Things were turning bad.
Meanwhile, Mick was still spewing that he hadn't finished with his guy and was saying stuff like "when this is over, mate, I'm gonna beat you till ..." all the time we had 15 soldiers behind us with their machine guns in our backs. All John was saying was "shut the f@*k up Mick, this is serious!!" The two "Europeans" spoke with the cops and told them that WE rolled them. Only one of the cops, who spoke a little English, thought it was too odd as he had seen us play that day! Everyone was arrested.
We spoke with the cops/gendarmes on the way to the station and tried to tell them what happened. They didn't understand Australian drunkenese very well. Anyways, we ended back at the Lock-up. Lots of questions and little response. They seriously thought we were the bad-guys! We were all separated and they questioned us individually. Mick slept through most of it.
They got an interpreter in after about 2 hours and we each explained our side of the story, again. The interpreter was laughing with me as I told the whole story. He'd already heard it twice and obviously got the picture. Calls were made to Interpol. Then things started to get brighter--we got offered coffee and cakes and were asked for autographs. Seriously. This is a bloody weird place, I kept thinking. I was just thinking: Who will I use my 1 phone call on!!
It turned out that the two blokes we tangled with were wanted in 3 countries across Europe for numerous offences including armed robbery and drug trafficking, and their native West Germany (it was that long ago) were very keen to get them back home!
We signed our statements and they said that they wouldn't need us to come back to give any evidence as they had enough on these two blokes without us. We got a police escort back to our hotel and got out of our Audi 4 as the rest of our teammates were boarding our bus to Paris. You should have seen the look on our tour "manager's" face as we got out of our own "individual" cop car.
We never did get to "Le Garage," the nightclub we were looking for, although we did find a good nightclub in Nice about 10 days later, that also ended up with police involvement for some in our touring party, but that's another story.
Truth is sometimes stranger than fiction.
Lisa and I are off to Brisbane to spend the weekend with kids.
Enjoy your day.
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