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To: Zardoz who wrote (74184)	7/30/2001 11:14:32 AM
From: Ken Benes	Respond to of 116815

Right on schedule. With the Gata proclamations of engulfing thrusts, spear chuckers, hannibal outflanking the enemy by climbing over the alps, new revelations, conspiracies, etc, etc, etc, you know the market is going to react. Unfortunately, it is always to the downside, I guess with all the spears in the air, buyers are afraid to stick their heads up and buy a few nuggets. Ken

To: Zardoz who wrote (74184)	7/30/2001 11:20:29 AM
From: Ken Benes	Read Replies (1) \| Respond to of 116815

When their is frost in coffee country, coffee futures spike up. Turmoil in the middle east causes a spike in oil prices. An imminent strike in gold country results in a spike down in gold prices, you go Shaka Gata, the unions are in on the conspiracy. Ken

To: Zardoz who wrote (74184)	7/30/2001 12:17:49 PM
From: long-gone	Respond to of 116815

Hands Off the Currencies! Should the loonie survive? by Pierre Lemieux A debate about dollarization has been raging in Canada over the last few months. (No, I won't make the easy joke that Canada is already dullarized enough!) "Dollarization" has become the standard term to describe the adoption of a foreign currency, whether it be the U.S. dollar (which is usually the case) or some other currency. In the Canadian context, dollarization means using the U.S. dollar instead of the Canadian dollar. In a recent opinion poll among Canadian business executives and business owners, 45% answered Yes to the question, "Should Canada adopt the U.S. dollar?", while 42% said it was a bad idea. A majority of those who wanted to keep the loonie (Canadian dollar) cited "independence/sovereignty" and "national pride/emotional appeal." [1] One wonders why "Canada should" adopt, or not adopt, this or that currency. Busi- nessmen are free to put their money where their mouths are, and use the U.S. dollar if they like it — or, for that matter, the Ethiopian birr. Perhaps those who trip on "national pride" (poor things!) should be let free to carry loonies. Why should one group impose its choice on other individuals? What is "Canada," by the way? Oh! You mean "the Canadian government"! Why do we need the government to decide which currency to use? Two crucial issues are easily forgotten in the dollarization debate. First, it would be impossible to dollarize at a rate much different from the existing exchange rate, for the same reasons that a currency cannot be pegged at an unrealistic level. If the government of Canada mandated dollarization today, Canadians would earn on average 35% less than Americans, as the loonie is currently priced at 65 US cents on financial markets. Whatever businessmen or whoever think of the loonie's worth, there is no way around the market's evaluation of the relative credit worthiness of Canadian and American producers, which is what the exchange rate ultimately reflects. The second issue is, indeed, why we should need a Godly political decision to decide which currency to use. We should know better than the European Union's way of doing things, i.e., than replacing some currency by another mandatory one. Informal dollarization is the forgotten option. In fact, Canada is already partly dollarized. Many Canadian multinational corporations use the U.S. dollar as a unit of account; a few, like Alcan, publish their financial statements denominated in that currency. The U.S. dollar is also used as a medium of exchange and store of value by many Canadians. Some 12% of outstanding commercial paper issued by Canadian corporations is in U.S. dollars. About 10% of outstanding deposits in, and business loans made by, Canadian chartered banks are denominated in foreign currencies (mainly the U.S. dollar). A standard measure of dollarization is the ratio of residents' foreign currency deposits to M3 (the largest definition of money supply, which includes all bank deposits). In April, Canadian residents' foreign currency deposits in Canadian banks were worth $66 billion (Canadian), while M3 stood at $687 billion, for a dollarization ratio of nearly 10%. The dollarization rate in Canada is lower than in many South or Central American countries because Canadians have less reasons to flee their domestic currencies. Yet, as can be seen on our chart below, when Canadians' trust in their currency decline, they tend to dollarize their assets. The light curve plots the Canadian dollar in terms of US dollars, from May 1970 (one month before the loonie started floating and jumped from $US0.93 to $US0.96) until now (US$0.64 in April). The heavy curve traces the evolution of the dollarization ratio (foreign currency deposits in Canada over M3). In general, Canadians have decreased their foreign currency holdings when the loonie was on an upward trend, and (quite strikingly since 1983) increased them to hedge against a dropping Canadian dollar. Increased dollarization in the 1990s (from 3% back to 10%) is also related to the phenomenal increase in trade, but the dismal performance of the loonie has obviously been a factor. This can happen because legal tender legislation in Canada (like in the United States) is quite liberal. Although banknotes issued by the Bank of Canada are legal tender (Currency Act, s. 8), nothing forbids contractual parties in Canada to agree on any other means of payment, including foreign currencies. The greenback could spontaneously become the major currency in Canada if only a majority of Canadians decided to conduct their transactions in that currency. (cont) zolatimes.com

To: Zardoz who wrote (74184)	7/30/2001 1:33:08 PM
From: Rarebird	Read Replies (4) \| Respond to of 116815

I prefer filet of Gold Stocks, Hutch. I require that the bones or "bugs" be taken out of my fish before I devour it. What kind of "bug" is in Kitco, Hutch? The Futures are down $3.10: test.crbindex.com But Kitco has the spot price only down 90 cents: kitco.com Isn't it amazing the difference between the "bug" report and the real Truth? I even got the XAU and HUI on technical sell signals! GRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRROWL! PS I'm just eating my MM or NEM candies here.