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To: yard_man who wrote (75624)	3/5/2001 1:52:08 PM
From: Mark Adams	Read Replies (1) \| Respond to of 436258

Are you saying that you believe falling prices equal inflation? Inflation/Deflation- the important part of what he was saying was lost in the relative aspects of it all. Where is Einstein when you need him? Let me get this straight: His assumption was gold supply grows more slowly %-wise than goods and services and gold is the currency. One of the things he seemed to say was that the increase in supply of gold could artificially restrain economic growth below it's sustainable level, resulting in a smaller economic pie. This must be a well known position, as I shared the same thought. This isn't an indictment of gold, just a caveat of a gold backed currency. Do you believe prices rise in terms of gold under that scenario? Since I don't need gold, I wouldn't really care. I can't speculate on what would happen to the price of gold if the economy grew faster than the amount of gold backed currency. It's not a simple thing, as you have the velocity of money to consider, and the public desire to own, based on mass psychology and perceptions that can be shaped by the media. Or are you just saying that you would just as soon see gold serve no monetary function going forward? I think this is the outcome. I don't support further efforts to extract marginal deposits at the expense of investments in more productive efforts. Keeping the price of gold low will encourage capital to find more productive uses, and if kicking gold out of the vaults accomplishes this, so be it. That said, I own gold shares, ABX and CEF, and would not be surprised to see the price increase. If it is the latter, fine, but Zeev is clearly in error when he talks of gold as a currency being inflationary. He's got that backwards. Sometimes he isn't as clear as he could be; this takes effort. You have to consider the message over all the posts and perhaps even read a bit between the lines. Message 15450227