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Gold/Mining/Energy : Gold Price Monitor
GDXJ 114.21-0.4%4:00 PM EST
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To: long-gone who wrote (65379)3/11/2001 12:01:59 PM
From: Square_Dealings  Read Replies (1) of 116815
 
long-gone:

My comment is not directed at any particular investment, long or short. I believe that the current economic crisis is a result of zero savings rate and over extended consumer credit. The government and Wall Street have encouraged high borrowing levels by making it easy to get credit. I mentioned earlier my 7 year old son just got an application to get a $50,000 credit limit from American Express.

The SEC just passed a law that will allow day traders with $25k minimum balance to borrow up to 4 times that amount on margin, instead of the previous limit of 2x capital. This is total bullshit and amounts to nothing more than the government promoting gambling.

I am long gold as insurance against a worthless dollar and the potential for bank failures on a massive scale. Gold is a debt instrument that has been abused along with every other derivative source of easy money in the last 10 years.

M.

p.s. I believe the drop in XAU at the close on Friday may have been related to margin calls where the brokers force sales to reduce margin. My guess is that some people recently went long gold shares as a hedge against tech positions but the tech positions are falling too rapidly and the newbie gold investors are too late to avoid margin calls.

Its a great set up for the banks since they can just liquidate margin accounts and buy the stock back themselves when they know the margin accounts in question are eliminated.
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