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Strategies & Market Trends : Currencies and the Global Capital Markets
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To: X Y Zebra who wrote (2680)12/25/2000 12:27:59 PM
From: Hawkmoon  Read Replies (3) of 3536
 
As for gold... I do not agree either

Actually, that was a "tongue in cheek" statement on my part because I've been known to have little regard for that shiny yellow metal. I believe the value of currencies should be based upon economic fundamentals (ie: the ability to produce greater wealth with invested capital).

Weak economy equals a weak currency that eventually self-balances as increased ability to export spurs some measure of economic growth that will hopefully lead to stronger self-generated growth (imported currencies being put to use domestically for internal investment).

But as we're seeing, these nations are selling us goods, and then shipping the proceeds back over here because they can't generate a better return in their own economies.

And until the structural obstacles that prevent the generation of better returns are eliminated, I don't see a reason to believe slowdown in the US will provide some economic boom overseas that would create those incentives for capital.

Gold for me is only for the purpose of safeguarding against an utter breakdown of the current financial system, which would default back to the previous one, namely the gold standard.

But such a drastic breakdown might cause us to default back one step further and return us to a barter system in which it would behoove us to buy large quantities of fuel, non-perishable foodstuffs, and assembling an armory of assorted weapons and quantities of ammunition..... <VBG>

Regards,

Ron
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