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Gold/Mining/Energy : Gold Price Monitor

GDXJ 105.33

+5.2%

Nov 26 4:00 PM EST

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To: Zardoz who wrote (21687)	10/15/1998 5:28:00 PM
From: E. Charters	Read Replies (2) of 116778

70 billion is really small unless its a black hole. It would pay Canada's 1994 deficit twice. It is way beyond the capability of the loaners to pay back and not it is not covered. We KNOW for sure that almost 2000 tons could not be covered as it is part of the debt of \|LTCM and the soon to be insolvent hedge funds. This market is the jitteriest market in history. 330 points today. This sawtoothing in reaction to .25 base points on 5 % is a bit chaotic. Sawtoothing can presage a fall. We are in a credit crunch of monumental proportions and if Congress will be acrimonious about 18 billion to the IMF I can be scared about a 70 billion gold overhang. The true Value of gold is today's price X 2.0. The true value of anything is impossible to formulate of course. But you can calculate its latent value not its price by taking its last stable free market price and compounding the inflation rate forward to today. We are depleting wheat, fish, silver and oil so their comparators for the rightness of this price are not fair. They are being held low by market manipulation. In the last days of all these products they will never rise in price. In Newfoundland COD never did rise in price. That is because nature could not exact anything but the extreme price of impovrishment right up until the stuff ran out. The last stable free market price of Gold were $35.00 in 1934 before it was then fixed by Roosevelt AND its price in 1984 of 485 dollars. Compound either today by the inflation rate, not the bank saving rate* and you will get the modern latent value. It cannot be denied that this is so. All other prices have changed to reflect this in general. We do not make salaries of 1000 dollars a year today so gold should not be merely ten times its 1934 price. IT should be 40 to 60 times its 1934 price. We know gold was WORTH more than 35 dollars as the price Canada paid for it in mines was always more than US 35 dollars. It was horded around the world and embezzled by the ton as it was always perceived as worth more than its price. Any way the only arbiter of a element's worth is its TRUE cost of production. * The true interest rate and the inflation rate multiplied make up the bank saving rate. True interest rates always average around 3.0%. The rest in the inflation rate. The inflation rate since 1934 AVERAGES around 6%. This equates to 1.06 to the 65 power or a factor of 44 times. This would make gold a price of 1545 dollars. It is probably more fair to use the 1929 price of 20.67 as this is the first predevaluation price and gold rose catastrophically in the thirties in response to devaluation. This would make it 1.06^ 70 or 1219 dollars per ounce. EC<:-}

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