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Gold/Mining/Energy : Global Platinum & Gold (GPGI)

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To: Korey W Carlsen who wrote (4663)	1/8/1998 6:31:00 AM
From: Henry Volquardsen	Read Replies (1) of 14226

*OFF TOPIC* Hello Korey. I think this was my first post on this thread but I have been lurking for awhile. I am not invested in GPGI yet but have friends who are. I am very familiar with James Davidson but more from his work with the Taxpayers Union. Also familiar with Prechter. For the record I manage global interest rate trading for a trading company and am actively involved with gold financing deals. I actually like and respect Davidson, Prechter and Wanniski (author of the origional article you quoted). I do have to say I find a lot of the analysis these and other people make re gold highly suspect. Perhaps people are still to emotional regarding gold. Trading the stuff I find it important not to be emotional. Whenever I see one of these statements I first check the assumptions to see if they are using suspect data. Wanniski's article raised a red flag because he used 79 as his base comparison and that was clearly an extreme year and not appropriate as a base for long term analysis. I haven't seen the Davidson analysis you mention but stating that gold performs relatively better in an deflationary period than in an inflationary period is counterintuitive. So I would want to see his base data. If he is including a period such as the 30s when general prices declined while gold prices remained contstant because of trading restrictions and government fixed prices this would significantly skew his findings and perhaps lead to the wrong conclusion. I suspect Prechter is closer to the truth on this one. FWIW I have been a gold bear for a while and am known as such on the Naxos thread. However I am beginning to change my long term outlook (I still think this year will be tough). The reason for my beginning to change long term outlook is because of Asia. However the reason I am saying this is because of my basic contrarian instincts. To many people are focused on the deflationary threat. The problem people focus on is never the one that gets you. There are already signs in Asia of inflationary responses such as use of the printing press. Add to that Europe. I have long believed the austere government policies being practiced in Europe would last only as long as governments were trying to qualify for EMU. The final beauty contest is in the spring. Once in there will be perverse incentives towards inflationary policies among the member states. I believe this will lead to a gradual increase in inflationary policies in Europe. I don't expect inflation to roar upwards as in the 70s however I think reports of inflations death are premature. BTW Mr Rubin was at Goldman Sachs not Lehman Brothers. Sorry for being so long winded Henry

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