Bill,
I think most people truly attempting to understand the economic role or influence that gold plays in the markets is bright.
I'm just not trying to take one side or another. Yeah, I come across as a gold bear at the moment because I can see the major psychological ramifications of a gold price surge could have as AG and Robert Rubin (and others) attempt to salvage the global economy and prevent a total collapse that would likely uncounted people unemployed, both here and abroad.
So forgive me if I don't cheer on a huge surge in the price of gold. But since I'm a bright guy (according to you anyway), neither will I ignore it as a potential storehouse of value until I can once convert it into a reasonably liquid and safe dollar denominated equity again.
I don't love gold nor do I hate it. But I respect the psychology people possess for it. I don't really understand it, but I respect it.
You have an agenda which is fine. I don't (really!!..I don't).
You believe gold should back all paper currency although the logic behind that belief would mean that the economic and productive power of mankind would be limited by how much metal he could extract from the ground to act as his monetary proxy.
Mankind would become a slave to the monetary system due to gold's rarity, who scarcity would control and limit his ability to finance and pursue new technology and economic strategies (the amount of available gold would limit the amount of investment capital that could be made available).
While your self-proclaimed mission statement calls for you to pursue the greatest possible price for gold, despite the lower costs of production that have manifested itself, mine calls for me to read the economic "tea leaves" and make the proper investment choices.
Your mission requires that you convince as many people as possible that gold is the only proper storehouse of value, whether it be the threat of the entire Federal Reserve system, Y2K, or just peoples greed as they sign on to the concept of a short squeeze.
But playing on peoples fears is a poor substitute for reality. When those fears are abated, they will go back to the system that they know and they will sell all of that gold bullion and the gold eagles they accumulated, knowing that if they don't, everyone else will and the price will collapse even more. Gold will be damaged by a short squeeze, just as most stocks that enjoy the temporary attention that a squeeze brings, leaves them suffering long term collapses. (and the examples are numerous).
Btw, I, and most people familiar with Y2K believe that the Asian economic crisis has only just begun. There may even more jewelers shops closing down.
Regards,
Ron |
