To: Merritt who wrote (68475 ) 10/1/1999 10:15:00 AM From: Henry Volquardsen Respond to
But in the 70's, gold's intrinsic value probably wasn't any greater at $800oz than it was at $150oz. What had changed was people's perception. The average J6P has probably never heard of Forex, and could probably care less about the natural corrections that occur in a free floating currency market - except for how he's affected by that "correction." When he sees the buying power of his paycheck dwindle, he knows something's wrong - and the built-in reaction is to get tangible assets, gold being the usual asset of choice. if purchasing power were being eroded. But where are people getting this perception? There is no great inflation underway, the fear in much of the world is deflation. There is more concern about keeping paychecks. We are a long way from people having a perception that they have to put some money into gold.I've been wondering about this recent announcement by the EEC's CBers. Wondering if they were trying to strengthen people's perception about the strength of the euro, and to what purpose. It was probably done to strenghten the IMF, but... need a stable to weak Euro. I believe the recent announcement was to prop up the IMF and emerging market gold producers.Last year I wrote a note to MB about how if I were a fundamentalist moslem who wished to strike a blow at "The Great Satan," I'd demand that my oil royalties be paid in a currency other than dollars.
