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

To: Mark Bartlett who wrote (37950)	7/28/1999 9:16:00 PM
From: Baba 2	Read Replies (1) \| Respond to of 116762

mb, <<<<>>> perhaps the worm is finally beginning to turn... POG up .65 overnight so far and has been putting in a nice base for the last three days....IMVHO

To: Mark Bartlett who wrote (37950)	7/28/1999 10:46:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 116762

My point exactly. If a price rise in gold was going to be viewed as that deleterious to the world economy, then in fact the economy must be in a real mess otherwise it could withstand that increase. Mark, the global economy IS IN A REAL MESS, in case you haven't been reading the news lately. Asia is only now recovering from the Asian contagion of two years ago, and is likely getting ready to be slammed again by Y2K fears. There is too much capacity of production, while the means of sustaining demand has diminished with the global turmoil. It's not like the demand isn't there, but that the means to develop it and encourage it are not being taken by nations like Japan because of tough political decisions they have to make with regard to monetizing their debt. Now when Japan begins to finally monetize their debt and devalue the Yen, China will follow, and the dollar will grow stronger in comparison. That will require liquidity to be added to the US economy in order to lower the dollar's value, and at THAT TIME you may see gold rise in comparison, or hold its current value. But the issue is that the demand for goods and services has to be properly serviced, not capacity restricted. That's like telling the Chinese who don't have automobiles that they will never be able to obtain financing to buy one. The demand is there, but not the credit capacity. I really like Armstrong's comments on the railroads and the current information age. The dollar was backed by gold but because of the productivity gains provided by railroads, it was imperative to increase the money supply to accomodate this new economic growth. But limited gold supplies prevented this. Thus, they began issuing silver certificates as well in order to finance the additional growth. But Mark, metal was used in times when there was relatively LITTLE transparency of banks or their liquidity. Banks were issuing money/certificates directly based upon their OWN holdings of gold and silver, not of the govt. And even with gold backing there were still panics because of the lack of transparency in these banks. Gold did not provide "integrity" during these times, now did it That is why the Federal Reserve was created, to regulate, and enforce transparency in banking transactions and liquidity, as well as acting as the lender of last resort to these insitutions. Lack of transparency is what caused these Asian banks to fail or get into trouble with over indebtedness. Once that is changed, there may be even less need for gold since that transparency provides the confidence that gold provided in the past. Gold should be sold off so that it finds a market equilibrium. As a result, individuals can accumulate that gold as a hedge against some absolutely catastrophic event that completely undermines or destroys their govt (as well as every other out there, unlikely as that sounds). Integrity in finances comes from having the appropriate regulatory monitoring policies in place that bring transparency to banking transactions, not having a shiny yellow metal locked up in vaults that never see the like of the public eye. Regards, Ron Regards, Ron

To: Mark Bartlett who wrote (37950)	7/28/1999 10:52:00 PM
From: lorne	Read Replies (1) \| Respond to of 116762

Hi Mark....... <<In my estimate, gold rising strongly would initially hurt the Dollar, making it weaker vis-a-vis the Yen & Euro.>> I have heard this comment used many times and it just does not sound correct to me. I don't think a rise in the price of gold will hurt or cause the dollar to lose value I think a rise in the POG just indicates that the dollar has lost value and the world is just looking for a place to store their value. I am starting to wonder why CBs should think that gold is a threat to their currencies. It is said that the USA holds something like 8000 tons of gold why should they fear gold at 1000$/oz. wouldn't it just add to the value of their currency. ? The new EURO started out with 15 % gold backing it appears to me that they have no fear of gold price. Take care Lorne