Gold Price Monitor Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor

GDXJ 145.03

+2.1%

Jan 23 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Gary105 who wrote (86847)	6/14/2002 12:09:35 AM
From: Ahda	Read Replies (2) of 116915

The money supply is not shrinking there are so many dollars out there that dollars are having difficulty creating future dollar value. Gold is rising as costs of operations here are very high so the ability to maintain the standard of living that has been set for our economy and servicing the debt we hold in our economy is also a factor in golds rise. Take into consideration interest rates if you have an economy that is moving very fast the rule if the market determined the rate the price for using those dollars or interest would be higher as more people want money so you can charge more for it. Here we have very low interest rates which by all means should be causing growth we are not seeing hiring in our large corporations. We are seeing a huge increase in housing price in CA. If you start thinking about wages and who can afford a house the whole thing becomes questionable. If our wages start to inflate to meet the cost of housing you are looking at a very high labor rate. When wages are too high and profits which are already tight will be too slim. This cam be seen in the wages of many top CEO's where many made out fine but employees and share holders lost. If the US does not show strong signs of a recovery in the form of new business growth that is going to mean high unemployment. That inturn will reduce the demand for products here and impact other nations who are relying on future sales to here. this will cause certain areas of the world to slow down. Japan had inflation due to too many dollars rapid growth and an increase in wages that ended up as an increase in property values. What Japan did not have that we have is very high consumer debt. Other currencies are pegged to the US dollar and that peg if our dollar dropped over night would reduce the value of their dollar. This amounts to many currencies who would then have debt that was created at a higher currency level needing far more currency to be able to repay the debt when the value of that currency is reduced. simple way of putting it would be you had a debt obligation of 2 Canadian dollars you took on that debt by converting 4 dollars in your currency to buy the 2 in the Canadian. Your currency drops so now it takes eight of your dollars to buy two Canadian dollars you have doubled your debt without any expansion but your currency has failed to keep its value. I tried to write as simply as i could but there are derivatives and there are numerous hedges to cover this possibility but they carry a cost factor to profit if they reduce risk they contribute to currency swings. So when a currencies value is questioned the economic system that produces that dollar is being questioned. Gold then has a real value as it is a commodity with value.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next