Competitive devaluation now may engulf Denmark


Denmark Warns over Pressure on Krone

By Michael Stothard, Alice Ross, and Robin Wigglesworth
Financial Times, London
Sunday, June 17, 2012

The head of Denmark's central bank has warned that the Danish krone is coming under intense pressure from investors seeking a haven in Europe and betting that the currency's peg to the euro could be cracked by the crisis.

Nils Bernstein, the governor of the Danish central bank, said that the upward pressure on the krone was the most severe he had seen in his seven years as governor, and warned that negative interest rates could be on the cards if the problem continues.

"You can see from our history that we like to keep the krone within a narrow band, half a percentage point or less," said governor Nils Bernstein. "I think we have to tools to continue to do that, and if it is necessary to move into negative interest rate territory, we will be ready for that."

... Dispatch continues below ...


Prophecy Platinum (TSXV:NKL) Announces Encouraging Rhodium, Ruthenium, Osmium,
Iridium Assays from WS11-188 of Wellgreen Project in Yukon Territory, Canada

Company Press Release
May 25, 2012

VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL; OTC-QX: PNIKF; Frankfurt: P94P) is pleased to provide results of full spectrum 6E (Platinum, Palladian, Rhodium, Ruthenium, Osmium, and Iridium) analysis of platinum group elements on the first batch of samples from the company's wholly-owned Wellgreen PGM-Ni-Cu project in the Yukon Territory, Canada.

The company enlisted Activation Laboratories (Actlabs) of Ancaster, Ontario, to conduct a full-spectrum 6E analysis of samples taken from the 2011 drill hole WS11-188. Adding Rh, Ru, Os, and Ir to Pt and Pd increased the total PGE content (6E) by an average of 28 percent, based on a population of 90 samples, most of which are from disseminated sulphide-type mineralization.

Assay results with 6E exceeding 0.50 ppm (0.5 g/t) (excluding copper and gold assays) are tabulated at Prophecy's Internet site and are available with assay results from the entire batch of 90 samples here:

Investors are pouring money into Danish bonds attracted by the country's narrow budget deficit and current account surplus, leaving it fighting to maintain the very narrow peg with the euro it has held since 1999. Rates were cut twice in the past month to a record low of 0.45 per cent.

Making life harder for the central bank, some hedge funds are taking long positions in the Danish krone as insurance against a collapse of the single currency, according to currency trading desks at investment banks.

"Just because a peg has been in place a long time doesn't mean it cannot break. It just means that it's cheaper," said Stuart Fiertz, president of Cheyne Capital, a London-based hedge fund. "If the euro cracks, the pressure to cut the peg will be overwhelming."

Denmark is in a similar predicament to Switzerland, which has been spending tens of billions of Swiss francs to buy euros and defend its own floor against the single currency after a resurgence in eurozone turmoil led to a spike in demand.

The krone is seen by some investors as a less risky bet than the franc because the Danish central bank has set a peg against a krone, rather than simply a floor, and so there is little danger of it weakening in the event of a recovery in the eurozone.

The Danish central bank spent more defending the krone last month than any time since the start of 2010 and it has seen reserves more than double from about Dkr200 billion ($34 billion) in 2008 to Dkr500 billion today.

The currency market in Danish krone is still relatively small, accounting for just 0.6 per cent of average daily turnover. That compares with 6.4 per cent turnover for the Swiss franc and 39 per cent for the euro.

Other potential currency havens in Europe have been struggling amid the escalation in the eurozone crisis. The pound has fallen in value in recent weeks as investors have priced in the possibility of further monetary easing in the UK.

* * *

Join GATA here:

Standard Chartered's Earth Resources Conference
Wednesday-Thursday, June 20-21, 2012
J.W. Marriott, Hong Kong

Hong Kong Gold Investment Forum
Monday-Wednesday, June 25-27, 2012
Renaissance Harbour View Hotel, Hong Kong

Toronto Resource Investment Conference
Thursday-Friday, September 27-28, 2012
Toronto Sheraton Centre Hotel
Toronto, Ontario, Canada

New Orleans Investment Conference
Wednesday-Saturday, October 24-27, 2012
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

Or by purchasing a colorful GATA T-shirt:

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

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:

To contribute to GATA, please visit:


Sona Discovers Potential High-Grade Gold Mineralization
at Blackdome in British Columbia -- 13.6g over 1.5 Meters

From a Company Press Release
November 22, 2011

VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling.

"We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company."

Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.

For the company's complete press release, please visit: