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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Jim S who wrote (35819)	6/24/1999 12:21:00 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 116764

Jim, The very fact that the world's central banks hold some 14 years production of gold and lease it out at 1% interest is a sign that they perpetuate the "gold as currency" myth. Taking that much production off the open market skews market efficiencies, effectively setting up a subsidy for the entire gold industry. Were that gold not being stored, the gold industry would have to operate based on market efficiencies with supply meeting actual annual demand. Much the same thing ocurred in the oil industry when OPEC artifically elevated prices far above production costs. The result was that marginable producers suddenly became wildly profitable and the industry could afford to finance more extensive exploration projects resulting in a broad widening of oil reserves that had lain undiscovered or unexploited. Now the subsidization of the gold industry has resulted in the same thing, as well as wild speculation such as the Bre-X affair. The oil sector went through an extensively bearish period as a result of the collapse of oil prices. Gold will likely do the same thing to the marginally profitable mining operations. And yes, all kinds of digressions can be taken. But to claim gold has intrinsic value is a subjective statement. What that "value" actually is remains to be seen. Regards, Ron