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Gold/Mining/Energy : Gold Price Monitor

GDXJ 121.95

+0.8%

Jan 9 4:00 PM EST

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To: Mark Bartlett who wrote (26864)	1/23/1999 4:10:00 PM
From: Hawkmoon	Read Replies (2) of 116846

I do not buy this ... gold, as an alterative haven for money protection is just as legitimate as any other Ok Mark... it may be a legitimate storehouse of value. Fine. But if you sell your dollars to gold dealers to purchase gold and the price of gold rises excessively fast you create the impression of inflation. By creating this perception you are helping to increase the value of gold in DIRECT competition to the dollar. If the price of gold increases, it take more dollars to buy it. That means that dollars have a reduced purchase power for buying gold (it now takes more dollars). Thus gold is a better storehouse of value than gold in the perception of people looking for safety (as well as profit). Too many people doing this forces those irresponsible shorts to rapidly cover positions to keep from losing their collective "behinds" without the ability to unwind these positions gradually. That further creates the perception that dollars are worth"less" than gold and inflation in the global reserve currency is occurring, resulting in the belief that investors had better buy gold. Hope that explain the scenario a little better... Regards, Ron

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