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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Cynic 2005 who wrote (17865)	9/29/1999 10:35:00 PM
From: Rational	Read Replies (3) \| Respond to of 18056

I think I have untangled the puzzle about the rich nations' strategy. I am convinced that US$/yen/euro are highly inflated in terms of their purchase power as compared to the developing nations' currencies, but the rich nations will play their game to maintain disparity. I think the rich nations will dangle their gold reserves threatening to sell some of it to buy back their currencies to prop up values. Gold has a limited utility compared to its supply and so US/Europe/Japan can play the hide and seek game with respect to their gold selling in the foreseeable future. The puzzle I had raised is: Where will investors use their US$/Euro/yen after pulling out of stocks and bonds? They will buy gold as the central banks sell the reserves. The money will go to where it came from: reserve banks. The announcement of "limiting" sale of gold is a gimmick to prop up the price so that US/Europe can keep selling gold at higher prices. I do not believe that gold will ever be the standard again; its price will drop to the worth of its industrial or ornamental utility. Thus, the stock market game may last very long; inflated stocks will of course be puffed.