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To: Zeev Hed who wrote (52500)	5/29/2000 10:14:00 AM
From: Haim R. Branisteanu	Respond to of 99985

Zeev, gold is not the ONLY store of value!! Land and real estate are, known mineral deposits in the ground are. In a nutshell there should be a defined relationship between the amount of money or other means of payments and the nation hard assets and specific productive assets. Fancy software is nice but it does not represent an asset as it is perishable due to technological advances, same apply to many other products. The RE debacle (S&L crisis) in US and before in Japan was generated by the mere fact of overstating the value of those assets by printing endless mortgage contracts ( printing paper money ) in other words a promissory note to pay certain amounts of money from the assets cash flow or person income. This promissory note or mortgage turned worthless or fell substantially in value for various known reasons. My point is that this is a recent example violating ones trust by not fulfilling a promise to pay. So the mortgage note was a FIAT MONEY NOTE. Printing dollars if on paper, contract or bytes, to buy goods from overseas is about the same. Others are stuck with fiat money. They produce more than they can use and then, the US buys those goods with pieces of paper called dollars, which formally do not have now a intrinsic value but only perceived value. As long as the trust in the dollar remains high everything is nice and dandy. My point is that....... what will happen to this promise on a piece of paper by the US government called dollar, if the global faith goes to another type of asset?? Well the dollar will follow the path of the mortgage note mentioned above which in turn will generate a hell of inflation. In the 1920 the same happen to the German Mark, due to the stupidity of the allies who decided that Germany should pay for the war such large amount of money in such a short period of time. Fact was that Germany was unable to produce the goods or assets to back their currency ..........the result is now history and has cost the world a multiple of the initial demand for compensation from WWI. Trade deficits are similar in nature if they are substantial and span over a long period of time. Pegging the dollar to some kind of assets would limit the pace of printing currency and there would not be enough dollars to sustain the imports which would result in lower trade deficits, and consequently lower growth. Raising interest rates is an artificial procedure to achieve just that lower growth & trade deficits and make the currency more attractive. The right thing to do is stop printing and natural forces will push the dollar higher and interest rates will rise. The danger of continuing to print dollars is for the world at large as many countries which do not have great credibility peg their currency to the dollar ....... so you have a multiplyer effect. BWDIK Haim

To: Zeev Hed who wrote (52500)	5/29/2000 11:43:00 AM
From: UnBelievable	Read Replies (2) \| Respond to of 99985

Money Supply Measurements and Equity You must assume that currency in circulation has to grow at the same rate as the world economy Absolutely - The reluctance to give up the gold standard is not due to the efficiency of Gold as a basis for currency, but rather on reluctance to trust anyone with the ability to "create" money. Equities are in fact a form of currency. As long as Equity gains and losses are kept within the "country" of the Equity markets there is not really a problem with having an Equity dollar not equal a US dollar. The inflationary effect for the US Economy of the currently inflated values of the Equity markets, (in terms of the hard assets for which they are a surrogate), occurs when Equity dollars begin to be exchanged for US dollars. A variety of factors have converged to vastly increase the amount of this type of foreign exchange coming into the US Economy. In a very real sense the Investment Banks are printing money. The inflation risk associated with maintaining the exchange rate at the previously established level (and continuing to increase as the market rises)is far greater than the "wealth effect'. When you say that the total currency in circulation in the world is $5 Trillion, what measures of money supply are you including? Do you, or anyone have a estimate of the total value of the Equity markets in the US. What percentage of M2 are US equities (I recognize they are not included in M2)? Is there a data source to look at this historically?

To: Zeev Hed who wrote (52500)	5/29/2000 3:00:00 PM
From: LTK007	Respond to of 99985

ZEEV based on this chart,i can see little possiblity that we will not see below 2400 in COMPX siliconinvestor.com somepoint

To: Zeev Hed who wrote (52500)	5/29/2000 5:31:00 PM
From: Claude Cormier	Read Replies (1) \| Respond to of 99985

<<Of course, we will have to go through a massive devaluation of all currencies just to get these 20,000 tonnes to cover the world's currency in circulation (what is it, about the equivalent of $5 tillion?>> Can you define "world's currency in circulation", cause the US money supply alone is more than $5 trillions.