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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: lorne who wrote (66919)	4/3/2001 11:07:16 AM
From: Rarebird	Read Replies (1) \| Respond to of 116759

Lorne, since the global stock markets peaked, about $US 10 TRILLION worth of global wealth (expressed as valuations of shares) has been written down. That is equivalent to the entire annual U.S. Gross National Product (GDP). What has NOT been written down are the debts. From this point on, three different main issues will mutually affect all the world's economies. The first issue is national credit worthiness. Wealth has fallen but debts have not. The result has been a dive in the value of collateral. Debts are now more risky and, over time, higher interest rates ought to be the result. If interest rates DON'T rise, the second issue will be falling currencies. The third issue is the future of the international value of the U.S. DOLLAR. The U.S. Dollar cannot CRASH without taking the entire global currency system down with it. Gold will be the major beneficiary of that. Japan holds $US 363 Billion, mostly in U.S. Treasury debt, though a very small part is held in the form of U.S. Federal Reserve notes (cash) - also a U.S. debt. Japan is in the super desperado stage. After Japan is finished selling its US equity holdings, it will sell its US Treasury debt. As this all plays out, the eventual big time winner is Gold. Got Gold? Got Guns? Got Glory?

To: lorne who wrote (66919)	4/3/2001 1:39:58 PM
From: Don Lloyd	Respond to of 116759

lorne - ...In the last day or so some one posted the amount of wealth that has been wiped off the books since this market drop began it was in the trillions and trillions of dollars. Question-- in what way do these losses affect the new supply of dollars being added to world money supply? In no way at all. Every dollar spent to buy a stock is exactly offset by someone else's receiving that dollar to sell it. Money is a catalyst for a stock transaction, and is neither created or destroyed in the process. Stock is a partial ownership in a company and a claim on the company's assets and future cash flows. If someone foolishly sells 100 shares for a penny or buys 100 shares for a million dollars, a stock price transaction record is established but the stock claim of ownership is unaffected, only having changed hands. The price of the last stock transaction is only significant to the extent that it influences the price of future transactions. Assigning meaning to stock and stock market capitalization levels is meaningless unless there exist sufficient buyers at the current stock price level to acquire the entire amount of outstanding stock, which is , of course, what happens in an acquisition. Since the peak price of a stock occurs when not even a further hundred shares can be sold on the market, using this price to assign the total capitalization value of a company is absurd. Regards, Don