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

To: long-gone who wrote (68860)	5/8/2001 3:03:18 PM
From: marek_wojna	Read Replies (2) \| Respond to of 116758

<<Is not the demand also greater and soon to explode due to China? >> Demand will explode when price will shoot up.

To: long-gone who wrote (68860)	5/8/2001 4:20:04 PM
From: E. Charters	Respond to of 116758

Demand is way greater. But it is not great enough even with Arabic and Japanese demand. Even with an increase in physical demand, the gold fixers being gov'ts, will strive as long as they can to hold it down. What may have to happen is that we establish a gold-for-goods market independent of the gov't gold-for-cash market and let gold find its own level against goods. It will be very hard at first to divorce people from this cert is worth so many dollars. It will not be. It will be worth so many ounces. A totally different concept. What I think you will find is that at first people will want more ounces for something than the equivalent dollar value. Then as the system begins to be seen as absolutely secure against currency devaluation, the buyers will need less. Some people tried this on the Internet about 4 years ago, but they wanted the buyers to trade in and out of the gold like they were buying or selling at bid and ask for big margins. It was greedy (3 to 7 percent or something like that) and did not work. I am talking about 25 to 40 cents a transaction. The gold fix will only be important when gold comes up to a realistic value vis a vis the slowly but surely imploding dollar. Why we have not grasped that the dollar economy is weakening like green river ice - holding for now, but ready to crack at any time. This is because we are/were in a period of deflationary growth similar to the roaring 20's. A widening money supply and no perceivable inflation except in the market. Inflation and deflation at the same time? Well that is what happened. That is why Greenspan tightened the grip when the market surged. It was the new "inflation". If the market had not taken off the depression we are headed for would have been ten years earlier. Chinese demand is moot. They cannot pay in gold so they do not sell for gold. They were supposed to make a huge demand in the 90's but it is impossible to do business in China (as it is in India) unless you operate devices that will neutralize silkworm missiles.. The Chinese are like the US and the Japanese, any trade is fine as long as it only benefits them. There is only one reason why gov't want to divorce gold or any easy to manage index. That is to print more and more money. The idea is to stimulate growth and be able to print money to pay a huge civil service and social services (pension, medicare) in general.(Gov't shortfalls of pay to snivel servants in the 80's and 90's) If they had to buy even 12% gold to index their money, they would have to shrink the forces in the States to one million, fire 60% of the civil service, and sell a similar percentage of gov't buildings to real private industry. The only solution to making US more competitive is to eliminate income tax AND sales taxes. They don't need it. (flat tax schemes are gov't plots to extract more money as they eliminate deductions - don't buy that one.) What no income tax would do is make all US products 24% cheaper over nite as the salary packs would be cut back by the tax amount. This would be an enormous competitive advantage on all exports. You could buy a car for 18 thousand that used to cost 24,000 ideally. This lessens a lot of expenses on interest and sales tax if that beast is retained. Or the company would make more profit. Profits and corporate tax contributions would shoot up and gov't coffers would soon equalize. But no way we should go to the spending of the past. The only way to get bad gov't spending practices to stop is to shrink the gov't departments overnight. Asking for better practice in setting budgets in gov't is like asking the fox to mind that the chickens don't eat too much grain. 60% of the cost of making anything is salaries. 40% of the cost of salaries is gov't tax. No tax means cheaper goods. Cheaper goods means more inroads into overseas sales and more profit for business. All things supplied as materials to manufacture would drop in cost too so this cost effect would snowball. Good would be substantially cheaper with no net loss in gov't revenue or personal income. You are just taking off the front end loading of taxes and putting it on the backend. At a casual glance it seems that the wage earner would be no further ahead if one ignores the price reductions that should happen. But he would have the same amount of money to buy what would be the same or probably lower priced product. (Business can afford to lower the price as they would make adequate profits and sell more still, so profit would go up) And there would automatically be more and better jobs available, lowering the gov't social cost and corporate taxes substantially. Win win? No. It's win win win ... infinitely. It makes no sense at all to make products cost MORE, in order to become richer. How the hell does that work? You sell more by lowering prices usually. If you tax the corporate profit side it does NOT add to the price of goods! And corporate taxes do NOT have to rise as more goods are sold. In fact they can be reduced. The same amount of money is still there! Sensu strictu there is a a seeming slight reduction (well, 15% is not that slight!) in total gain in collecting from corporate taxes alone, but in practice so may companies make a profit that never did before, that the actual reduction in gov't revenue is not noticeable. In fact in every major previous income tax reduction in every major country, (Norway, Ireland, Great Britain) - gov't revenues actually grew! This curve and its obvious consequences are lost on present commie-liberal brain-dead (scratch that.. what brain?) politicos. Yet it is a system we have followed slavishly as there was "not enough" money to pay for the 1st world war. Every nervous nelly president who went to lower taxes was stupidly told that monetary needs of the overly large governments could not be made up in the following year. How the hell do they know? Everything after such a tax break is definitely NOT equal! So it is TAX that causes a burden on people. That, and its spending is very very wasteful. Gov't spending is the most inflationary spending there is bar none. Anyone who says otherwise cannot be anything other than a communist-brainwashed economic spy. And I am being open minded on that. I have to laugh when people say they must raise taxes to fix this or that problem as with British Rail or other such boondoggles. How could the taxes get any higher? EC<:-}