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

To: Cynic 2005 who wrote (17919)	10/27/1999 11:56:00 PM
From: Rational	Read Replies (1) \| Respond to of 18056

Mohan, I don't think BoE or any other central bank is out to help Goldman. They (CBs) let Drexel perish and so can let Goldman die. They are worried about wider market-wide panic, called systemic costs/risks, and so they got into LTCM to let it be liquidated over a period of time. The main reason for gold falling is that the CBs don't want to hold it as a standard any longer. Quite frankly, one should own assets in stable developing economies. I was a strong advocate of Malaysia and India when they were at the bottom. Even now they are poised to do well looking forward because they have little external (foreign-currency denominated debt). I was surprised to note that India has a total debt of $100B, of which about $13B is foreign. [I read an article from Hindustan Times and could not believe.] India's main problem is oil price, but software exports may make up. Malaysia has zero external debt. I had EWM at $2 and sold at $4+; and have waited these funds to go down again, but they will unlikely unless there is a severe downturn, globally. Indians value gold as an ornament. But, just think of the price of $300 per ounce. If gold had risen at the rate of the stocks, it should be $3000 by now. Thus, it is really cheap. Indians may ultimately exhaust the CBs' sales of gold, when gold cannot be mined cheaply, and it cannot be used to protect rich nations' currencies any longer. Then developing nations' currencies will appreciate, so will gold, and the pseudo disparity of exchange rates may vanish. That may be at least 20 years from now. Just my thoughts. Rational