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Gold/Mining/Energy : Gold Price Monitor

GDXJ 106.75

-0.5%

4:00 PM EST

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To: Enigma who wrote (27569)	2/3/1999 12:45:00 AM
From: Hawkmoon	Read Replies (1) of 116791

Hutch - so you admit that gold in the reserves keeps a currency strong? << This is why other resource countries have sold {Canada, Australia}>> DD, You forget that there are two reasons for CB's to hold gold. One is for the purpose of maintaining psychological support for those who think gold supports Fiat paper in inflationary times. The second is so the CB's can control and influence the price of gold versus its currency. If gold gets to high versus their Fiat paper, they have the reserves to sell in order to pressure the market. A weighty hammer indeed. Second would be as a means of preventing their Fiat paper from growing too strong in order to create the perception of weakness in their currency and thus decreasing fears of deflation. However, it it is far more efficient to print more money and inflate the supply in order to boost economic output so that struggling economies have ready marketplaces for their goods as they try and drag themselves out of recession/depression. Holding large quantities of a commodity that might compete with your currency is the best insurance a CB can have. Regards, Ron

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