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Gold/Mining/Energy : Gold & Gold Stock Analysis

GLD 368.18

-0.5%

Oct 31 5:00 PM EST

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To: ecrire who wrote (25093)	8/4/2011 11:11:38 AM
From: Tommaso	Read Replies (2) of 29622

Stocks can go either way, as they did in Germany in the early 1920s and in Zimbabwe recently. Huge balances of paper credits can be shifted around. The evil thing is that it is all gambling. Poker chips have very little intrinsic value, and that's what shares of companies are turning into. Gold mining companies stocks may be dragged either way, but since they are producing an actual substance that people value, they will ratchet upwards. The 1930s are commonly cited as a deflationary era, but the seizing and repricing of gold was actually a huge monetary inflation that Roosevelt meant to raise the general price levels. The effect on the main U. S. gold producer --Homestake-- was to mutliply the price of its stock even as other stocks sank 90%. Things are, of course, different now. But it's a mess no matter how you look at it. And gold does well when things are a mess.

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