OT RE: Let's discuss that distasteful subject (AMD stock) no longer
"In 1997, the company realized an average price of $420 per oz.
on its sales, versus an average gold price of $332/oz.,
reflecting the benefits of its hedging program. At the end of
1997, the company had 10.0 million oz. of production hedged
at a minimum average price of $400/oz. through the year 2000." S&P Reports on ABX
Don't see how ABX can abandon its forward sales except as a temporary market measure. It (and some others) are constantly bringing cheaper capacity on-line, and this, more than anything else, is what IMHO is driving gold prices down. If ABX expects incremental cost to decline, ut had better sell the stuff forward as long as its realized price is greater than its expected cost. Goldbugs have always assumed that new gold could be won only at higher real cost, so that gold was believed to be a real store of value, its positive self-rate of interest depending on its increasing scarcity. Bad joss. Developments in recovery technology have led to the promise of falling prices or decreasing scarcity for a few years at least. Not good stuff to hold, even as a temporary expedient, when T-bills pay 3+% real return. Recognition of this trend and the losses of holding gold since '79 may lead many to abandon holding gold as a hedge. The anomalous behavior of prices recently make this a real threat.
The fall in YDR must not be interpreted as weakness in the dollar. Some of it is just a periodic shock to unhedged members of the yen carry trade. The short $ interest rate is still ten times the short Y rate. Occasionally, some of the people who borrow yen to buy T bills must be taken out and shot to encourage the others.. Cock a snook at Toyoy and Honda ADR and think about buying some J stocks. Selected J stocks, if not the N225 have had and should have a good rally. If I were GM I would buy Toyota and give Chevrolet and BOP away!
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