Barrick Gold (ABX) Message Board

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Gold/Mining/Energy : Barrick Gold (ABX)

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To: russet who wrote (2411)	4/15/2002 6:39:57 PM
From: nickel61	Read Replies (1) of 3558

To butt in here...The main point is that there is an intrinsic relationship between gold and other currencies, which is affected by the relative supply of each. The wonder of fiat currencies, all of them, is that in a fractional reserve banking system they can be created almost at will and almost endlessly. Gold as we all know is rather tough to locate, process and make available. That said there is a natural interaction between gold and the other less constrained currencies in the world. You must at least be willing to consider that that relationship exists before any of the analysis that Fuzz Face and I are making becomes meaningful. If you see no connection then it is pointless arguing...it is from that relationship the relative value of gold as money versus other currencies such as the US dollar that the arguements against Barricks hedging is based. If you think gold is nothing more than a commodity like zinc then you are correct, why not hedge it. If it is indeed money then the risks are much greater betting against it's price long term. Do you really believe that the world percieves gold in the same vein as zinc, or copper? Maybe you do. But that is a different problem.

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