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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (43518)	3/24/2002 10:59:28 AM
From: Joan Osland Graffius	Read Replies (3) \| Respond to of 99280

Zeev, >>As for the Japanese recent appetite for gold, quite understandable, but a little late and a little overdone (buying at three times their normal rate of buying). Yes, I don't know what goes on in the minds of people. I think that the Japanese people have around 5 trillion yen in cash as savings, someone could correct me if this number is incorrect. Cash has been king in Japan with deflation for the last ten or more years and holding this asset class has increased the purchasing power of it's citizens. I don't know if they have been getting any interest on this savings at the banks, but we know if they get any interest it is miniscule. In 2001 the government decides that they are going to let the currency devalue and the purchasing power of these people savings starts to decline. The government also decides to put an insurance cap on the amount of yen each person holds in their bank accounts. Gold as an asset class becomes one of the trade offs during this type of economic activity in the country. They have a stock market that continues to deteriorate so that asset class is not attractive. A lot of these people have homes that are worth less than the mortgage and this asset class is not very attractive either. They know about bubbles and currencies of the US and Europe are not attractive. I also believe the citizens know their government and corporations at some point in the future will sell their funds held in other countries and holding off shore debt is not attractive. For sure the risk of the Chinese doing this is real. What would you do? Jay, here on SI has been communicating that deflation of some assets is occurring in Hong Kong and gold is an asset class of choice of some of it's citizens. We also know the Chinese central bank is increasing its gold reserves as well as is going to start a gold exchange in the country. Interesting times. Joan

To: Zeev Hed who wrote (43518)	3/24/2002 12:12:49 PM
From: churchy6	Read Replies (1) \| Respond to of 99280

Zeev, While Feb. '02 Japanese gold imports of 19.8 tons (662% increase over Feb. '01) could be a flash in the pan, Japan has imported relatively large quantities of gold for sustained periods previously. They averaged 16.4 tons/month in '94 and 21.86 tons/month in '95.