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To: Alex who wrote (53355)	5/28/2000 11:37:00 PM
From: d:oug	Read Replies (1) \| Respond to of 116764

Alex, it is a very long article and extremely well written, and while there is very little fluff it is easy to read and see the logic of the process to arrive at a simple conclusion. No gold issue, just a simple paper money supply and paper money creation along with the same supply/creation of credit with a focus of where it goes and what happens when there is a change in "direction" and "location." Ponzi Finance............ prudentbear.com The Credit Bubble Bulletin - by Doug Noland Ponzi Finance May 26, 2000 ... Dr. Minsky placed great importance on debt structures..... Minsky's model has three categories of debt structures: (1) Sound hedge finance ... cash flows are expected to exceed the cash flow commitments on liabilities... (2) Less sound speculative finance ... cash flows, although inadequate to fully service debt in the short-run, are generally sufficient over the longer-term. (3) Unsound Ponzi finance ... cash flows from assets in the near-term fall short of cash payment commitments and only with some future bonanza will cash flows ever be sufficient to service debts and provide any realistic hope of generating profits. Importantly, a 'Ponzi' finance unit must increase its outstanding debt in order to meet its financial obligations..... New money and credit are a necessity for perpetuating the game..... Ponzi financed assets, in particular, are highly sensitive to both changing perceptions and higher interest rates..... If our invoking Minsky Ponzi finance analysis is indeed the correct analysis for the U.S. bubble, the prognosis is increasingly perilous.

To: Alex who wrote (53355)	5/29/2000 2:50:00 AM
From: PaulM	Respond to of 116764

ZIMBABWE SOLD HALF ITS RESERVES IN PAST SIX MONTHS; TO MORTGAGE REMAINING uk.news.yahoo.com This weekend gives me the opportunity to post some things I've seen lately that have really clarified the politics of what's going on in the gold market. So I'll post them tonight. Hopefully these will shed light on what to look for in the coming weeks, in terms of signs of the next rally.

To: Alex who wrote (53355)	5/29/2000 3:13:00 AM
From: PaulM	Respond to of 116764

US PLAYERS SEE THE EURO AS AUSSIE DOLLAR'S WHITE NIGHT "According to US dealers, the players are commodity trading advisers, quantitative model-driven outfits . . . They are the dominant force: they are very "short" Aussie dollars and euros and are selling on momentum . . . ." "'But forget interest rates," said one economist. 'When people start buying euros, the Australian dollar will rise.'" smh.com.au P.S. You might ask why "commodity trading advisors" would go short the aussie dollar, a commodity country currency, when commodities are rising against the dollar. To answer, it might be worth noticing that while the price of gold shouldn't have much fundamental impact the the aussie dollar, the aussie dollar has a very significant fundamental impact on the price of gold.

To: Alex who wrote (53355)	5/29/2000 5:02:00 AM
From: PaulM	Read Replies (1) \| Respond to of 116764

SOUTH AFRICAN RAND SLIPS TO NEAR REOCRD LOW "The rand's volatility follows Thursday's slide to a fresh record low of R7,20 to the dollar, hit by a combination of fresh concern over developments in Zimbabwe, inflation fears and euro weakness." mg.co.za Alex, I think what all this boils down to is that the coming dollar slide/euro turn around (and come it must) will change everything. Gold won't immediately benefit from a weaker dollar because there is a great deal of pressure to keep gold lower in dollar terms. But once the dollar falls, physical offtake at the lower dollar price will result in a liquidity crisis of the type we saw last fall. My best guess is that all this happens in the next three to four months.