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Gold/Mining/Energy : Gold Price Monitor

GDXJ 97.99

+0.3%

Nov 11 4:00 PM EST

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To: Hawkmoon who wrote (44965)	11/13/1999 11:42:00 AM
From: Michael Collings	Read Replies (1) of 116753

As elementary as this is going to sound..... Gold is a store of value and,(this is big!)IT IS PORTABLE! Is the price being manipulated? It doesn't matter in the long run. It is still a store of value and it is still portable. It's value is dependent on perception of its worth at any given time. As long as substitutes for gold, ie., paper money, are perceived to have worth, gold will not be as highly valued. Take away that perception and gold will soar. In the mean time the price can be manipulated especially since it is such a small market. In the long run it will reach its natural level taking into account the years and years of inflation. Manipulation only ensures that when the time comes the move will be explosive rather than a nice gradual rise. Whether or not companies forward sell will not affect demand nor will it affect perceptions. When the credit bubble implodes, and implode it must, whether its this year next year or three years from now, the perception of paper money as a portable store of value will diminish with its actual value. The fed's ability to restore liquidity as they have with each liquidity crises in recent years eventually will be fruitless in preserving the value of the dollar. It is precisely because these liquidity crisis are occurring more frequently that we know the end is within sight. The Economist had an excellent article last week on the impending implosion of our credit markets. However, the resiliency of our Fed could keep this going awhile longer. Japan's market bubble lasted much longer than most people thought. I would imagine ours will also. The debt bubble is beyond anything ever seen and is growing exponentially. The stock market rise is only a reflection of the debt bubble. With each crisis the Fed must infuse more credit to delay the inevitable. So why wouldn't anyone want to hold a portable store of value that has intrinsic value? Probably because the perception of paper is still on a rampage. Confidence in paper and promises won't diminish until there is a major crisis, such as a debt bubble pop and when adding more paper doesn't restore confidence.

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