<<Ron, I think you are fooling yourself and your readers with the assumption that the old days of gold as the currency of last resort are coming back.>>
Zeev, nowhere that I am aware of, have I said gold would come back as currency of last resort.
However I do believe that gold could move higher with currency turmoil and mostly so with the U.S.$. I also believe the US$ will soon take a mighty plunge, this year or certainly in 1999. The strong US$ is one of the major negative factors on the gold price. Once the dollar starts coming down gold will likely rise.
This will be the turning point in the gold bear.
If you read my recent updates on my Web site, you will get a better idea where I am coming from. There is not a lot of comments on gold though, mostly stock and world markets that will eventually have a big impact in the old U.S.A.
We are just seeing the beginning now
We are getting close to the next turn in the death spiral screw in Japan. This could cause or may already be causing a liquidation of U.S. paper assets.
<< Gold as a reserve is a straight jacket om the world's economy. >> I agree, but the fool has been loose to long and caused a lot of problems, perhaps the straight jacket should have been used sooner<g>
Since we are on the topic, I wouldn't count gold out as a currency so soon.
It worked very well for Asians who had gold. South Korea used gold from their citizens to help them out.
The strongest economies and currencies have the most gold reserves, U.S. and Germany.
Swiss Franc the strongest currency in the world over time, happens to be backed by gold.
What happens in the next 1 to 2 years could actually re-enforce gold as a valid currency
Do as I do, not as I say
The CBs talk about selling gold, yet the biggest holders have sold none. I doubt whether the U.S. Germany, Italy or France will sell any. The Swiss have to hold a referendum to sell gold, but we keep hearing the same old announcement about their intents.
The CBs that sold their gold are in trouble, Canada, Australia and Russia, currencies at new lows. Belgium, I haven't followed their currency close, so I am not sure of the recent value.
Once gold turns up, so will the mining sector
Ron |
