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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: SOROS who wrote (32049)	5/9/2000 10:52:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 42523

o.k. i'll read that tomorrow...too late already in my neck of the woods. i'll let you know what i think. it looks pretty nutty at first glance however.

To: SOROS who wrote (32049)	5/10/2000 12:27:00 AM
From: Archie Meeties	Respond to of 42523

Soros, The next war will be a war of currencies the likes of which can not be imagined. The illusion of enormous supply of Au will evaporate once physical demand demonstrates that the supply which has held down the usd price of gold consisted of nothing more the movement of bullion from one ECB to another. The inertia of a strong usd was initiated and then supported by this movement. Now the question will become - who will buy the illusion of an expensive dollars if the supply of paper gold comes to a halt? A crashing equity market will be the last sign of the destruction of this illusion - an illusion losing credibility as the discrepancy between economic fundamentals and equity valuations becomes a sickening absurdity. The word of the day will be "Illiquid". Holders of ndx puts as real life 'protection' for their beloved tech myths may find that the counterparties are bankrupt and gone for a long vacation. The image of an evil clown comes to mind. The lone defenders of the usd remain the Asian faction and the Fed, China is unknown. My guess is that they are playing both side of the currency fence for now, waiting for the victor. The current defense consists of printing more dollars - literally printing for all you and I are worth. When this defense fails, and it must, hyperinflation wheelbarrow style will be the worst outcome. Derivative markets, as Heinz has been raving about for months, are totally untested, and will quickly become like the chaff that the wind blows away. There must be some escape plan engineered by the Fed, of which we will never be aware of, least of all if it fails. It may consist of joining the euro or releasing oil from SPR in a last ditch effort (which would seal OPEC refusal to settle crude in dollars) to strengthen the "THERE IS NO INFLATION" myth. The dung rally early this year must be somehow part of a GS powered solution, perhaps to facilitate a crash and then a deflationary depression in an attempt to ward off a hyperinflationary sequence of events. A pre emptive strike which will choke demand and attempt to ward off inflation by throwing Asia into recession again. This approach has its merits, but it has been done before but the timing is wrong to try again, IMO. In any case, until the usd crisis is over, physical gold will serve well as the currency of last resort, and holders of 'paper gold' might find that they are exchanging paper for paper. Once the abyss is closed, 'paper gold' will be valuable again. So, in chronological order; a crashing equity market, a plunging dollar, a rising pog and 'paper gold' that outruns physical gold until the defense of the usd leads to hyperinflation apparent to all. Then, paper gold is sold, and the physical is bought "in size". How high will gold go? Any number is meaningless now, as meaningless as the current price of gold! How long and how severe this crisis is - how can one tell now?