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Gold/Mining/Energy : GOLD-XAU
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To: paul ross who wrote (1348)3/4/1998 10:19:00 AM
From: Enigma  Read Replies (2) of 1756
 
Asian 'dishoarding' (con't) Not all of Asia surely. The situation is S.Korea is interesting. Where is the Korean gold actually going? Is it from weak hands to strong(er) hands i.e. other central banks. These people are being paid for their gold 6 weeks after turning in in - in local currency. Let us hope that their local currency hasn't tanked even further. Is this a case of good money driving out bad.

Whatt are the parrallels between this and America in the 1930s when citizens were forced to turn in their gold (at $32/oz I think - later fixed till 1971 @$35/oz)

The gold went to the central bank, and it became illegal and also UNPATRIOTIC for individuals to hold hold. Faith in paper was the driving force. You could only hold gold through ownership of gold shares - which soared.

Of course this leads to the classic argument for diversification of investment. It might seem a good idea to own (only?) gold - but what happens if there is a crisis of such magnitude, such a loss of faith in currency that the government declares it treasonably to own real money, i.e gold, and anyone doing so is branded a traitor liable to be hanged from the nearest tree? I'm stretching a point, I know, but it was an argument put to me by Russ Morrison once. And it is a compelling one

Ironically, because it suits them, the Euro bankers will want some gold in their reserves because they want to ensure confidence in their new paper. And so it goes on....
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