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To: maceng2 who wrote (110959)	7/1/2001 7:57:00 PM
From: craig crawford	Read Replies (1) \| Respond to of 436258

>> If gold tanks more a whole load of miners go out of business << there are historical precedents for this happening with commodities. commodities have sunk to levels below where it was profitable to produce them in the past, and eventually that is what caused a turn in the cycle. while production is being curtailed (i.e. mines shutting down), you can have the supply demand imbalance met temporarily from de-stocking of inventories. of course there is a demand side to the equation as well. demand could fall faster than production putting downward pressure on prices. don't forget gold is priced in u.s dollars, so if foreign currencies are low enough it will encourage production and forward selling from foreign sources with weak currencies such as australia and south africa. it will also weaken demand from foreign sources. if indian rupees fall enough it might spark selling from india. if the chinese devalue the yuan they might dump gold to raise dollars. >> This will kill those who wish to see gold at depressed prices << so are you essentially saying that the powers that be are manipulating the price of gold lower, but they don't want it to get too low? they are essentially keeping the price of gold in a specific range? do they all get together and arrange on a certain price? >> If you have no supply, guess what happens to prices on the demand side << but what if the demand drops even faster than the supply. or what if the shortfalls in production are made up from above ground supplies?