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To: Zeev Hed who wrote (36409)	7/3/1999 1:16:00 PM
From: TD	Read Replies (1) \| Respond to of 116756

Zeev, Your response is interesting. Only one area would it be beneficial to review; 'I believ that gold is dead as a monetary instrument because it would intrinsically cause permanent inflation if it was the peg against which all monetary instruments are based.' Thought ... What changes the troy ounce of gold or the number of federal reserve notes required to buy the ounce of gold? If a dollar equaled a dollar there would be no inflation because inflation by strict definition is " An increase in the money supply" However most people choose their own definition. Back to the point if a dollar does not equal a dollar (eg. it now requires about F$265 for an ounce of gold and in 1970 it required about F$75 for the same ounce of gold) then what do we use for a "standard"? For example if the "foot" were allowed to "float" then each builder would be able to build according to their "foot" and their would be no standard to estimate the cost of a new building... As a student of monetary history, it is easy to see the greatest lesson in all this chatter... "People do not learn the lessons of history".. My best to you, this is not to convince you or to argue with you, perhaps you may see it that way ,it is to make us all think.. As it is asked of my kids when discussing their day in school... What were you taught today? Were you taught to think or were you taught to believe"?" td

To: Zeev Hed who wrote (36409)	7/3/1999 2:02:00 PM
From: Rarebird	Respond to of 116756

Zeev; Supply and Demand are NOT the Driving force in the Gold Market at all. Gold is only 2% Commodity. Gold is both a reserve that a Central Bank holds as a defense against other paper currencies losing their value and as a support for their own. The Dollar is drastically over- valued IMO. The only thing that is keeping it afloat at these lofty levels is the stock market and foreign inflows. I think the System is in for quite a shock as Y2K unfolds. I began investing in 1982 when Gold was worshipped as a "Golden Calf" and equities were hated. I started buying stocks in the spring of 1982 and everyone told me I was crazy and nuts. Now I'm buying Gold aggressively and I'm hearing the same thing. If gold falls to $195 an ounce, I'll just buy more. Ultimately, Gold will trade inversely to the dollar. It will have its day in the sun again. That is what I was telling people about the S@P in 1982 after 16 lean years.

To: Zeev Hed who wrote (36409)	7/3/1999 6:03:00 PM
From: PaulM	Read Replies (1) \| Respond to of 116756

"Do you really think that the value of a single commodity should equal the world annual gross product?" I think not only world annual gross product, but world annual gross product since the beginning of time has to be denominated in some medium of exchange. I say "has to be" because the alternative would be stone age barter system, in which each of us has to be our own farmer, barber, shoemaker and under-wear-maker etc. until we find someone willing to trade these services for what we have. The issue is: how many mediums of exchange and which. A single one that all countries are willing to accept will facilitate global trade that otherwise would not take place in a world of many mediums of exchange. That leaves: which medium of exchange? This issue has been debated at length and I won't go into the reasons gold is superior to government issued fiat. P.S. It is true that gold in the many thousands per ounce is above fair market value in a free market. But it is precisely because we don't have a free market system that gold will trade at that price. This is also the same reason that oil skyrocketed in the 70's and will again. The supply of dollars will caused a "shortage" of these commodities. Regards