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Gold/Mining/Energy : Precious and Base Metal Investing

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To: Elizabeth Andrews who wrote (11459)	5/24/2003 5:11:49 AM
From: E. Charters	Read Replies (1) of 39344

I know I am braving Liz's attack Pekinese by stating this, but gold is on record as advancing in a deflationary environment. From 1929 to 1934, gold rose from 20.67 to 35 dollars per ounce. It was about $32.33 in 1933, which precludes the oft held assumption that gold only got to 35 dollars because Roosevelt pegged it there. 1932 had a -10.44% inflation rate,( a negative sign indicates it was in fact a deflation rate) and 1933 had a -4.91% rate. Still, gold rose on its own. The reason given by some authority, is that gold in effect replaces money, which is scarce, so gold rises in demand in that "coveted" role. Normally a commodity being bartered for the scarcer resource will fall in value, but we see that in this instance gold takes on the monetary role, so its value reflects that it is the scarcer commodity when compared to other things, even the dollar. EC<:-}

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