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Gold/Mining/Energy : Gold Price Monitor

GDXJ 126.27

+3.5%

4:00 PM EST

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To: Abner Hosmer who wrote ()	7/8/1997 1:01:00 AM
From: Lorne Larson	of 116852

thomas Congrats on starting a most interesting thread. Your timing was impeccable. All the talk of a historic shift in the psychology of the gold market instills a sense of "deja vu". In 1980-81 interest rates were at incredible highs and bonds were being devastated. In hindsight it was an easy call to buy long bonds, but most people didn't do it. The reason? Because the "experts" said it was the start of an "historic and long-term shift" to higher rates. There was no sense in buying a long bond when interest rates were at 15%, because rates were going to 30%. Likewise in 1987 the doomsayers were saying that the market could collapse completely, because people were starting to believe that a share certificate was merely a piece of paper with no intrinsic value (a view with which I have some degree of sympathy). Shares would have no liquidity and therefore become essentially worthless. It was an "historic change in investor psychology" and it might be years before the stock market recovered. The language sounds mighty similar today in respect to golds. Maybe in the last 2 or 3 days we have actually seen a reversal of 4000 years of recorded history in terms of investors perception of the value of gold. Maybe it is an "historic shift". Maybe, but I don't think so. Regards

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