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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: kimberley who wrote (7482)	8/28/1999 8:10:00 PM
From: m.philli	Read Replies (1) \| Respond to of 81280

Thanks Kimberly, It would be interesting to know what physical Gold demand "would have been" if Asia "had been" allowed to carry on expanding for a couple more years before the crisis developed. Perhaps, with the extra time allowing wealth creation to filter down to the common folk, demand would be very different. When you think of 100's of millions of potential buyers on the verge of being able to purchase, the demand numbers become pretty awesome. Not only were they getting jobs and wages but their currencies were appreciating. 100 million people buying an ounce=100 million ounces=total production. With the populations of the Asian countries that were doing so well, is that number unrealistic? mike

To: kimberley who wrote (7482)	8/31/1999 11:34:00 AM
From: m.philli	Read Replies (2) \| Respond to of 81280

MARKET REPORT (8/31/99): Gold tracked up in the early going. Physical demand for the yellow continued to build in the United States as investors continued preparations for the year 2000 computer switch-over. Market participants reacted also to concerns about interest rates and their effect on the stock and bond markets. Alan Greenspan late last week indicated that the Federal Reserve would begin taking the rising stock market into account in forming monetary policy. The Commodity Futures Trading Commission on Friday showed a large increase in the speculative short position for COMEX gold now at 75,298 contracts. These aggressive shorts tend to push the price down and ameliorate the effects of the strong physical market. The dollar is getting hammered this morning, a situation probably indicative of a trend we have reported on here in the past -- foreign money, particularly Japanese money, leaving Wall Street and returning home. Those who do not completely understand the value of physical gold metal in the financial portfolio would be well advised to read the following "real life story" from a speech by the World Gold Council's Asian Director Albert Cheng. This comes to us by way of our own TownCrier at the USAGOLD Forum. It is a lesson in the practicality of gold ownership: "Gold in Indonesia, as in some other Asian countries, is primarily bought as a store of wealth by the rural community. This practice had some interesting consequences during the recent economic crisis. The crisis led to the Rupiah plummeting against the dollar, reaching at one stage nearly Rp17,000=US$1.00 compared to the pre-crisis level of Rp2,500=US$1.00. Conversely the local price of gold soared from around Rp20,000 per gram to reach Rp130,000 per gram. While urban residents with savings in Rupiah suffered badly, rural residents benefited from the soaring gold price. Many sold their jewellery at this stage and used the proceeds to buy land or cattle or to finance new businesses. Along with distress sales, illegal mining and retail stock liquidation, it is thought that as much as 100 tonnes of gold were exported during January-April 1998. There was thus a net increase in wealth in rural areas, which may explain why they were largely unaffected by the civil riots and looting of May 1998. In August 1998, harvests were good and farmers started to purchase gold once more despite the high price - although quantities bought were smaller than in pre-crisis days. An improving economic and political environment towards the end of the year resulted in the Rupiah gaining ground against the dollar and the local gold price of gold become cheaper. Rural gold purchases rose sharply, reaching 80% of pre-crisis levels. Buying increased further in the first half of 1999 with the continuing relative strength of the Rupiah and the fall in international gold prices. Elsewhere in the region, second quarter demand in Thailand was four times the level of the same period of last year...The rise in investment demand during the second quarter of 1999 was especially remarkable. The lessons of the Asian economic and currency crisis have not been forgotten. During the first quarter of last year, there were people in Indonesia and other Asian countries who were only able to buy food and other necessities because they had some gold they could sell. I want to close today with just one example from a survey we conducted late last year in Indonesia. Mrs. Latiyem told our interviewer, and I quote: 'I didn't have anything, that is why I sold my gold necklace to buy essentials. I bought things like coconut oil, soap and a paddy field. Once I have sold the rice, I may be able to buy back my gold with the profits.'" There are two points to be made here (please forgive me if I am stating the obvious): First, in Asia gold secured a better life for those who owned it during the crisis -- to simply call this one of life's important lessons does not give it the full import it deserves, unless of course we experienced that benefit ourselves. Then there would be no doubt as to the importance of gold in the financial portfolio. The second report is related to the conclusion gained from the first. During the height of the crisis in Asia, when gold exports were skyrocketing from that part of the world with people cashing in their gold, there was great criticism from the mainstream press that gold couldn't go up even during the worst international economic crisis in a long time. The implication was that Asia was unloading its gold, but Asia wasn't "unloading" at all. It was simply using gold for the reasons the metal was procured in the first place. It helped them survive. Not only that, gold owners lived well, while others who didn't own it suffered. We said at the time that once the smoke cleared in Asia we would see a huge increase in gold demand from that part of the world because gold's lesson would not be lost on the people. That supposition, apparently, is now becoming a reality. It won't stop here. Over the past week, physical gold demand has picked up considerably at CPM/USAGOLD. Investors are citing two motivations: Y2K and the bubble stock market.