Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (150351)	2/9/2002 12:06:28 AM
From: Les H	Read Replies (3) \| Respond to of 436258

Maria B. song nashscene.com due out Feb 19 cdnow.com*JOEY/ITEMID=1499625 guess all that sittin' around as a couch potato watching CNBC contributed to his demise.

To: Les H who wrote (150351)	2/9/2002 11:20:47 AM
From: Tommaso	Read Replies (1) \| Respond to of 436258

Sounds good for the goldbuggy: A recent article in the Wall Street Journal highlighted one of these important indicators. The article outlined how lower interest rates and the price of gold actually have a "cause and effect" relationship. It told of the seven Fed rate cuts between December of 1974 and November of 1976 and the subsequent 405 percent jump in the price of gold from 1976 to December of 1979. The next seven rate cuts occurred between 1984-1986, and gold nearly doubled. The Fed again cut rates five times from 1990-1992, and gold jumped from $317 to $427. That's a whopping 34 percent increase in just six months. Now, since the beginning of 2001, there have been an unprecedented 11 rate cuts. The conclusion the article draws is logical: "If history is any indicator, gold is set to rally in a big way." Demand really up, supply really down Another strong indicator of things to come in the precious metals markets is, of course, demand. There's been a lot of it lately. Over the past 12 months, world gold demand has surged 12 percent. That's due in no small part to increased stockpiling of the precious metal by some of the largest nations on earth. China's central bank, as a case in point, recently raised its gold reserve by 120 metric tonnes. But the real story is in Japan. In preparation of such belt-tightening measures as the imposing of a new and very limited FDIC-type protection of just $75,000 per bank account, Japan just bought 30 metric tonnes of gold. You can better imagine the public reaction to this if our own FDIC suddenly lowered its stated $100,000 protection of your bank account by 25 percent, due mainly to problems in the economy. Unfortunately, Japan's move leaves an unthinkable $1.5 trillion of the public's money virtually unprotected in the banking system and makes the nation subject to a massive flight to gold, a "currency" now viewed as being safer than the yen and more secure than the banking system. Of course, bear in mind that all the gold ever mined since man first picked up a shovel – some 120,000 tons of it – has a collective value of "just" $1.3 trillion. But that isn't deterring the Japanese any. As a preview of coming attractions, Japanese citizens demanded 54 percent more gold in the last quarter of 2001 than in the previous one. Should this gold flight continue – and lines have already started forming outside precious-metals dealers in Tokyo – the price of gold will soar, too. Interestingly, and in the wake of the Euro introduction, French banks have also reported brisk gold sales, as have Russia and the U.S. All of this is against a backdrop of an anticipated 1 to 2 percent decline in gold production, a shortfall that would translate into 100 tons of demand gap in 2002, at the very least. Then there's silver. Over the past two months alone, silver demand has shot up a whopping 9 percent. Astonishingly, the U.S. government recently admitted that its entire silver inventory will soon be depleted. A popular department of the government, the U.S. Mint, likewise acknowledged that it will soon need to buy silver on the open market to satisfy its coin customers, since its own stockpile has just been used up. That's the first time the Mint has had to buy silver like this in over 30 years. In 1996, it was estimated that there was enough silver reserve to last the Mint another 12 years. However – and remarkable for any government agency – the Mint's marketing programs combined with an unprecedented demand for silver Eagles by investors and retirement accounts has led to a department far more productive than anyone ever anticipated. Investors have absolutely fed on Mint coins like the silver American Eagle – yet another signal flare heralding a coming precious metals boom. But perhaps the most telling part of the silver story in 2002 is this: World silver production in 2002 is only expected to be 485 million ounces, while demand should top 900 million ounces. In the simplest terms, demand for gold and silver will simply clobber supply in 2002. Many of the most respected names in the investment business believe that for these and other reasons, the gold and silver bull is well on its way. Forbes magazine, together with the major brokerages of Salomon Smith Barney, Morgan Stanley Dean Witter, Merrill Lynch and Goldman Sachs have all reported that gold will rally into the $325 to $350 price range in the near future. That's some 30 percent higher than current prices. A poll of 17 analysts conducted by Reuters also forecast substantially higher gold prices in 2002. worldnetdaily.com