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Gold/Mining/Energy : Gold Price Monitor

GDXJ 101.44

+3.5%

Nov 12 4:00 PM EST

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To: Jaakko who wrote (995)	7/30/1997 11:17:00 PM
From: Mark Kubisz	of 116756

In an affluent society, the value of gold relative to goods is supposed to be constant. In other words, if gold is valued as much as 50 widgets are by the average person, then that is how it will be valued, regardless of what the price of those 50 widgets is in fiat money. Thus if the price of 50 widgets doubles over time, so should the price of gold. That is why gold is said to maintain its value during inflationary times. This being so, I do not see why gold should benefit from any amount of deflation. If $100 buys progressively more goods (deflation), then it should also buy progressively more gold i.e. gold should drop in price. I invite anyone who can point out an error in my thinking, or cite contrary historical experience to please do so.

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