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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Bobby Yellin who wrote (43903)	10/26/1999 12:48:00 PM
From: ahhaha	Read Replies (2) \| Respond to of 116753

Gold is money. The price of money is impossible to predict because all other prices are priced in it! Ken Benes has a good point. Without an event gold is only somewhat boring. Unless you're a speculator it makes sense to have a little Agnico or Harmony laying around. The boys might cook up a squeeze because they have no trust in anything including their hedges. The lack of trust feeds into the big risk: being short and needing to cover in panic. I don't hold gold with the intent of making a killing. It's a societal responsibility to resist society evil and gold is the way, the only way, to vote against the academico-federal phalanx which holds a wrong view about the function and purpose of the central bank. In 1974 Robert Mundell protested against high taxes on capital. This idea was completely rejected at the time by the establishment. Mundell was disgusted with this reaction so much that he took off for Chile. Gradually others picked up his idea and a few people in high places seized upon it as way to reverse stagnation. Reagan was one. In later years the cutting of taxes had been considered to be bad because presumably it increased the budget deficit. You can't do anything constructive as long as it threatens a myth. It was the cutting of taxes which forced government to reign in spending. The Democrat controlled Congress argued all those years that the budget deficit needed to be fixed first and then they would reduce taxes. Fat chance with those spenders in power. Reagan found a way to get the Congress to agree to a tax reduction. This action not only forced fiscal discipline, but also created the firm foundation upon which the current prosperity rests. Gold works in a similar disciplining way with central banks. Our FED is inducing in the rest of world's central banks a return to the good old days. It's a slow but insidious process and it's too slow for speculating individuals to use as a meaningful factor of price determination. FED's market interventionism though causes the inexorable rise of gold. The expected rate of rise is so low that the resulting compression causes high amplitude fluctuations. These fluctuations are tradable. The speculator must trade; can't hold. The problem is guessing entry points. You have to take the Missouri Attitude. You have to book below and assume there will be a one day downside spike and then an intense reversal. You book away GTC or by daily entry and maybe you'll get picked up. If you do, then you have to be right that it is a reversal. You can't take a speculative position in gold and hold. You can take a long term investment position and hold, but if you do that you might as well find industrial stocks regardless of whether the stock market crashes. They will always outperform the price of money over the long term. The reason for this is that human effort in the creation of new ideas and products adds more value within the same risk class as the human effort made to retrieve gold.