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

To: philv who wrote (8084)	10/7/1999 8:17:00 AM
From: sea_urchin	Read Replies (3) \| Respond to of 81023

philv : Indeed so. I didn't realize to what extent certain mines would be hurt as POG rose. Ashanti, for example, is in serious trouble. Amongst the SAf mines, Randfontein was mentioned in this morning's paper as being highly "hedged". "So, the question is as always, who actually controls the POG? Never the producers or the cost of production for sure." I don't know and I can't argue with you! What interests me is, if gold is now universally (or should I say officially) viewed as a barbarous relic which is mainly used to adorn indulgent ladies, why does anyone bother to "control" its price?!

To: philv who wrote (8084)	10/7/1999 5:47:00 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 81023

Phily, What the European banks did was comparable to a one of the major money center banks suddenly refusing to loan out its depositors money and calling in any outstanding loans. It created an immediate credit crunch in the gold market. Now this gold will sit in their vaults, collecting dust, and removed from the marketplace until there is a hue and cry for more liquidity in the gold market, possibly by gold miners themselves. It was an attack on the US dollar, imo there is little doubt. Whether the decision was made in February as 49r claims, or recently, it was a decision made to directly weaken the US dollar in a vain attempt to shore up the Euro, which is 30% backed by gold. The problem for Europe is that increasing the value of their currency, WITHOUT restructuring their economic deficiencies will only be a short-term solution. With a lower dollar, our goods will be even more competitive in their markets, while theirs will be less so. US earnings will go up while theirs will go down. That's why it is so foolish to think that by accumulating gold, a nation can make up for a weak economic structure that is unable to compete in a global marketplace. The end result is that the best economy, with the greatest efficiency and productivity, will win. Having all the gold in the world backing your currency will not alter that. Many goldbugs seem to deny this self-evident logic thinking gold standard is the end all/be all for backing a nation's currency. But economic efficiency will usually win out in the long run. Thanks for the opportunity to respond. You are right on about who controls the POG, and for what reasons they use it as an economic or monetary weapon. Regards, Ron