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To: Hawkmoon who wrote (36360)	7/2/1999 4:08:00 PM
From: Jim S	Read Replies (1) \| Respond to of 116762

I agree, it would be more practical to hold platinum, titanium, and chromium in reserve. Problem being, to hold enough in reserve to be practical would wreak havoc on industries that use those materials, like tire makers during WWII when rubber was treated as a strategic material and restricted from public use. Isn't that a great reason for gov'ts to hold gold? Because of its frivilous value as a midas metal and relatively limited industrial use, it seems to me that it is perfect -- huge psychological value, yet withholding large quantities won't disrupt "practical" industries like the withholding of strategic stuff might. Gov'ts holding large stockpiles of titanium would lead to industrial and market instability as rumors would inevetibly circulate about fluctuations in the size of the stockpile. If a "worthless" commodity like gold can ripple the market, imagine what would happen if we held half the world's production of chromium! Gold seems to be pretty useful after all, don't you think? jim

To: Hawkmoon who wrote (36360)	7/2/1999 8:55:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116762

I will give you another reason for gold...Now suppose China, Japan, Euro no longer want to be dominated by US Dollar, that further suppose that they are unwilling or unable to make necessary changes to get their economies up...now suppose they decide to gang-up on dollar....(Sell dollar-buy Gold) Isn't this is the good reason for USA to keep large gold reserves just in case? Vice Versa? Now dollar is vulnerable as it is..Inflation, recession, Market Bubble collapse....What is in the Euro reserves to protect them, if their largest reserve (Dollar) would tank? Yen? Young, weak and single: the European currency There were fireworks in Frankfurt to celebrate the euro's launch It is something of a comedown for a phenomenon that was greeted with such jubilation at its launch. When the euro was born on 1 January, champagne flowed, bankers celebrated and prime ministers and presidents hailed the historic moment. It was indeed a momentous occasion in Europe's history. This was the continent's first serious attempt at launching a common currency to match the dollar or yen, to allow freer trade, to cut red tape and create a trading bloc rivalling the Far East or USA. Barriers between 300m people in 11 countries would be swept away. Fifty years ago, it would have been unthinkable. So hopes were high. The new currency held out the promise of higher growth, lower interest rates and no more dominance by the dollar of European economies. EU Commission president Jacques Santer said the launch signalled "a new chapter for Europe". And Wim Duinsenberg, head of the European Central Bank, which runs single currency interest rate policy, said: "The euro is far more than a medium of exchange - it gives identity to Europe." The celebrations lifted its value to $1.18 and predictions of its strength were widespread. Falling, not rising Yet what has happened in the six months since then? The single currency has fallen steadily, reaching its latest record low against the dollar on its six-month anniversary. A series of events have knocked confidence in the euro - and, as we know, confidence, or lack of it, is self-perpetuating. At three weeks old, it became clear that the currency was performing weakly, beginning to fall. Speculator George Soros said the euro would remain weak as long as economic policy-making remained divided. Then a member of the Bank of England's monetary policy committee warned of the possible collapse of the currency if countries began withdrawing. The war in Kosovo, the resignation of the European Commission and Italy's broken promises on reducing its debt also served to undermine the fledgling currency. Another blow came from incoming European Commission President Romano Prodi, who said last month that Italy may have difficulty staying in European Monetary Union. Moreover, poor economic performance by member countries - especially when the US is showing very strong growth - have allowed it to sink. Last month, the European Central Bank intervened for the first time to buy euros amid fears it was too weak. The new currency has dropped about 12% in value since launch and the prospect looms of a euro worth less than a dollar. Mixed hopes So what does the future hold for Europe's currency? Some economists have accused the European Central Bank of pushing Europe towards economic crisis. Low interest rates, 2.5% on average, have failed to help the stagnant economy. Yet there is hope for member states: companies in the UK exporting to "Euroland" have suffered, finding that their goods are uncompetitively priced, but member states have received a boost as their goods appear better value. The appointment of new EC commissioners, the end of the Kosovo war and investors looking to make gains when recovery begins are all now set to bring back confidence. The Bank of America believes the respective trends of Europe and the US will begin to turn in the autumn, which should boost the euro. Senior economist Rob Hayward said: "The European economy has been sluggish primarily because Germany and Italy have been weaker than anticipated. Our feeling is that they're probably going to continue to be a drag for some time and pick-up will be moderate. "More convincing evidence that the European economy is recovering is more likely to come in the fourth quarter. "The US economy has continued to be stronger than expected and it will probably be much later before there's evidence that is moderating. "For three years, those signs have been just round the corner, so it may take time, but we think it will come." Some believe the euro will have to wait until notes and coins are introduced in 2002 before the euro really takes off. In any case, it may have had a shaky start, but reports of the death of the euro are undoubtedly premature. news.bbc.co.uk