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Gold/Mining/Energy : Gold Price Monitor

GDXJ 136.34

-0.4%

Feb 10 4:00 PM EST

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To: Zeev Hed who wrote (70697)	5/30/2001 2:05:48 AM
From: Gord Bolton	Read Replies (1) of 116976

Some days these arguments remind me of the hunter and the squirrel. The hunter approaches a tree from the south and spots a squirrel on the south side of the tree. The squirrel also spots the hunter and as the hunter approaches the squirrel moves to the north side of the tree. The hunter moves to the west side of the tree and the squirrel moves to the east and so on until the hunter is back on the south and the squirrel back on the north side of the tree. Now most would immediately agree that the hunter has certainly gone around the tree but many will disagree on whether the hunter has gone around the squirrel. It all depends on what you mean by going around. A gold standard would imply that a unit of paper currency would be fixed to a certain amount of gold. That does not mean that a country could only print currency in direct correspondance to the amount of gold that it held in the central bank unless of course the country had absolutely nothing else of any value. Real estate, resources, labour and technology would still be valuable and creditworthy. The holder of the note, however, would be assured that it could on any day be redeemed for a specific amount of gold. I do not follow the arguement that this would limit the development of economic prospects, resources, or the expansion of an economy would be limited by the exact amount of physical gold in the central bank or in existence for that matter. The development of a new oil field, technology or a bumper crop would add more value to the economy even if it did not add more gold. The resulting prosperity would not be limited because their was no increase in the amount of gold. A gold standard can be used without worshipping gold or creating everincreasing piles of it in a vault. It is simply a discipline imposed by the population on the printers of currency. This is in no way a novel or unique concept. It is really no different from objecting to the neighbour who simply creates currency with his photocopier while I and presumably you have to work for it or trade something of value for it.

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