Waigel to hold June 18 CSU briefing on EMU, gold

By Emma Thomasson

BONN, June 6 ( Reuter ) - German Finance Minister Theo Waigel will defend his controversial plan to revalue Bundesbank assets and his stance on Europe's single currency to his Christian Social Union ( CSU ) on June 18, the CSU said on Friday.

A CSU spokesman said Waigel had been due to address the party, the Bavarian sister party of Chancellor Helmut Kohl's Christian Democrats ( CDU ) , earlier this week, but was forced to cancel because of ``important engagements in Bonn.''

Waigel on Tuesday was forced to retreat from his plan to help plug a gaping budget hole and qualify for the euro with profits from revalued central bank assets, after sharp Bundesbank criticism and disquiet in the ruling coalition.

The beleaguered Waigel on Wednesday survived an opposition parliamentary motion calling for his dismissal, after Kohl threw his weight fully behind the struggling minister.

CSU sources in Bavaria's state parliament said there was broad dissatisfaction with Waigel in his own party, particularly because of the row with the fiercely independent Bundesbank over asset revaluation.

The sources said the party was critical of their leader because he had not informed them sufficiently over his plans.

Waigel on Thursday denied there was any discussion in the CSU party about a possible delay to the start of European economic and monetary union ( EMU ) , planned for 1999, as reported by Friday's edition of the Sueddeutsche Zeitung.

The Munich-based paper said CSU members were discussing a possible delay due to the left-wing election victory in France.

Waigel also reaffirmed that Germany would meet entry criteria as outlined in the Maastricht Treaty and that the deficit criteria must be strictly met at 3.0 percent or below of Gross Domestic Product ( GDP ) .

The Sueddeutsche Zeitung daily quoted a member of the CSU state government in Bavaria as saying: ``Since the French election we have agreed currency union must be postponed.''

The report said the CSU state government and CSU members of the state assembly in Bavaria believed a single currency would be a ``monetary death sentence'' after new French Prime Minister Lionel Jospin suggested it could be launched with softer financial criteria.

A spokesman for Bavarian Premier Edmund Stoiber said in response to an inquiry that Stoiber saw only 50-50 chances of a punctual launch of the euro if France's new leaders met certain election campaign pledges.

Dominique Strauss-Kahn, France's new Finance Minister, has suggested that criteria in the Maastricht treaty on monetary union, including a requirement to cut public deficits to three percent of gross domestic product, should be interpreted politically rather than in strict mathematical terms.

Stoiber, quoted by the Sueddeutsche, said softening the criteria could have disastrous consequences. ``If people notice in the year 2005 that they have given up their currency too soon, we can really talk about a bomb in Europe,'' he said.

The govenment would like to see gold at it's real value ( cost of copper ) and once and for all killing the myth that the barbaric relic of years gone by is somehow a hedge against inflation. If gold was ever to raise its ugly head as a safe haven against the evils of fiat currency the governments of the world would sell at a huge loss to stiffle the reasugance. But they do'nt have too, they will sell very slowly and reap big profits while keeping the fiat currency strong. Do you believe the EMU would let gold devalue the currency. The CB's will and are selling all the gold in thier valuts now. They know the future of this barbaric metal is gone. If the CB's had no gold who would want it?

1. 16 mo. baby bear $415.00 to $337.00

2. Almost 10 year moma bear $502.75 to $326.10

3. 17 year papa bear $850.00 to 284.25

#1 baby bear needs a test of $337.00 only -$6.00 or 2%

#2 moma bear needs a test of $326.10 just -$17.00 or %5

#3 papa bear needs a test of $284.25 - $60.00 or 17%

http://www.bday.co.za/97/0606/news/news4.htm

LONDON, June 5 ( Reuter ) - Soaring platinum and palladium

prices on a lack of available supplies dominated precious metals

trading on Thursday morning, traders said.

Palladium fixed at $235.00 per ounce, its highest fixing

since the twice-daily fix began in 1989 and its highest spot

price since early 1980.

Platinum, its sister metal, was fixed at $440, the highest

fixing since September 15, 1995.

``Things are very tight in the spot market. A big U.S. hedge

fund is holding 1.5 million ounces ( of palladium ) and who knows

when this will come on the market,'' a dealer said.

``Every participant who is short in palladium is being forced

to borrow,'' he added.

That need was sending borrowing rates -- especially for

between a day and a month -- to unprecedented levels.

``If you borrow overnight you have to pay more than 200

percent. And one-month lease rates are at 165 percent,'' he said.

Platinum one-month rates were 60 percent versus a regular

two-three percent.

``If the funds don't deliver, what will people who are short

do? Someone is squeezing palladium market and this raises legal

issues,'' the dealer said.

However a senior market source debunked any idea of

culpability. ``It maybe an ugly world but it is a free world and

the funds cannot be forced to put their metal back into the

market to relieve those who don't have any,'' the source said.

Compared with gold, platinum and palladium are very small

markets and are not blessed with overground stocks running into

tens of thousands of tonnes held by central banks.

``The funds have the ammunition to manipulate it and that is

what they are doing in conjunction with Russia's problems. It is

a sort of double whammy for the market,'' the source continued,

adding that if similar problems hit the gold market central

banks would come in.

Russia the largest exporter of palladium and the second

biggest supplier of platinum after South Africa, has been out of

the market this year due to administrative problems in Moscow.

This week it opened 1997 export talks with importers in

Japan, its biggest customer, and exports could begin on June 20,

according to Russian negotiators.

But the squeeze will take another couple of months to

unwind, according to dealers.

LONDON, June 4 ( Reuter ) - Palladium prices exploded to new

17-year highs on Wednesday in a market severely squeezed by

protracted delays in Russian supplies.

The gold market, however, ignored the excitement in the

platinum group metals ( PGMs ) , as it did the German drama over

plans to revalue gold reserves to qualify for European Monetary

Union.

Palladium, a rare white metal used in electronics, catalytic

converters and dentistry, fixed at $210 an ounce, the highest

ever level since prices were first formally set in 1989.

By contrast its previous fix on Tuesday was $188.50.

``The market is extremely nervous about Russian deliveries.

Palladium and platinum are much higher this morning even though

there has really not being any fresh news,'' said analyst

Hanspeter Hausheer of Swiss Bank Corp.

Platinum, its better-known sister metal, also jumped to fix

at a new 16-month high of $425.00 an ounce, compared to the

previous fixing of $406.50.

Both metals have soared since the start of the year -

palladium is up 85 percent from year's low and platinum is up 25

percent - due to administrative delays in Russian supplies to

key importer Japan.

Russia is the world's biggest producer of palladium and is

second to South Africa in platinum output.

The latest price surge started late on Tuesday as dealers

scrambled to cover short positions by borrowing or buying metal.

``Everyone and I mean everyone is a borrower. If there are no

lenders around all you can do its borrow stuff at very high

lease rates or buy material, which has been driving the price

up,'' a dealer said.

``It has really started to bite now,'' he added, noting that

one-month lease rates had rocketed to 90 percent or higher. In

platinum, the rates were at around 50 percent.

The market would remain extremely volatile as fresh news

emerges from ongoing supply talks between Russian exporter

Almazjuvelirexport ( Almaz ) and Japanese consumers, dealers said.

Both metals whipsawed off highs ahead of the morning fixing

on talk from Tokyo traders that Almaz officials had told

Japaense clients exports were expected to begin around June 20.

In other precious metals markets, gold fixed at $342.40 an

ounce, down $1.15 from the previous fixing and barely changed

from Tuesday's closing level in London.

The silver market was similarly stolid at a virtually

unchanged $4.74/$4.76. --London newsroom +44 171 542 2936