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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: long-gone who wrote (68410)	9/30/1999 10:57:00 AM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 132070

Richard, many class me(somewhat wrongly) as a "gold bull". and many class me wrongly as anti-gold. I've been a significant investor in gold at times. While I don't see "gold as money" as much now as 25 years ago, I'm far less sure what the next 20 years may bring. Agreed. I am concerned about a number of possible trends. Many of the emerging market economies are lobbying hard fro currency controls and management. They are getting a very sympathetic ear in Europe and Japan as well as among protectionist, statist politicians in the US (Gephart, Buchannan, Perot). One of the major, although unspoken, goals of the Euro is to build a wall around Euro to protect interventionist, statist policies. The move to currency blocks will lead to greater currency management. If this trend towards managing currencies reasserts itself and the free markets are unable to exeret discipline on economic policy then I definitely agree that gold will reemerge as money. I think I had posted earlier that I believe we set a very significant low in gold with the British gold auction so I agree that we have probably seen the bottom and if not we are very close. I am not however seeing a return to $800 anytime in the forseeable future. Personally I think gold will have tremendous trouble getting above $400. Stronger gold prices will bring some mines back on line. My belief, and this is just speculation, that if the central banks stay out of the picture the equilibrium price will have a range with a $350 mid point. However I don't believe the central banks will stay out. I believe the action by the European central banks was an effort to prop up the IMF and support emerging market gold producers. When their goal is accomplished they will rationalize whatever action serves their needs. I trust the European governments less than almost any government on the planet. I see some slight downside risk in the very short term but think there is margianl upside risk over the next year. The 1Q issue does not concern me. I don't believe there will be a major Y2K impact in the US and if there is such an effect overseas, which is possible, I believe it will benefit the dollar as much as gold. Henry