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To: Victor Lazlo who wrote (110531)	10/15/2000 7:17:00 PM
From: GST	Read Replies (2) \| Respond to of 164684

Victor: Let me give you an analogy. Lets say you lease a car, and the effective interest rate is 1%, so you decide to lease ten cars even though you only want one, and you sell the nine you don't need and invest the money in the stock market. The price of cars goes down cause you keep flooding the market -- there is a glut of cars -- right? Now, lets say that its time to give the cars back but now you find that everybody has been playing this game for twenty years and in fact you can't find any cars to buy. This is what has happened to gold. The gold owned by the central banks was already sold before they sold it -- and a decade of production in the ground is leased out and has already been sold as well. Central bank sales are in part meant to keep the price low to keep leasing as an attractive bet. If the price went up and leasing was not attractive, the house of cards comes down -- there is no glut.