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Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: russet who wrote (2385)	4/12/2002 2:58:24 AM
From: FuzzFace	Read Replies (2) \| Respond to of 3558

Well then, you sure came up with a first class quote. I'll have to steal it. <g> But I stand by my opinion that $100 current dollars is way too low for a historical average POG. Food, shelter, transportation and clothing are essential and consume the lions share of most peoples income. Clothing is unnaturally depressed since it is now mostly made in countries which use slave labor and/or have currencies crushed by the bloated dollar. When the days of slave labor and the super-dollar end, what will happen to the price of clothing? or electronics? Cars are expensive too. 30 years ago, a Japanese car cost my dad $2000. Five years later, his next one was $3600. I just bought one (better, but not by much) for $26000. Yet the Japanese are famous for their work ethic, efficiency and automation. And the yen has depreciated significantly in the last 10 years. So for cars, inflation overpowered all those deflationary pressures. But things we don't import much of, such as shelter and food, are the best inflation tells. The industrial revolution, the electical revolution, and the computer revolution kept some things cheap. E.g. wheat is not much more than its price 100 years ago in nominal dollars. But the nominal price of bread is over 100 times greater after 100 years of improvements and automation. That is the very essence of inflation to me, when it can overwhelm 100 years of technological improvements while the price of the raw materials merely eeked up. The dollar is simultaneously strong compared to other currencies, and yet a mere shadow of its former self inside the US. I disagree with the idea that the average person has no use for gold. They most certainly do in the form of jewelry. I myself have given my wife a few nice pieces of gold jewelry. I must agree with you about bullion though. Only people who fear the worst buy bullion. I own no bullion now, but I'm thinking of it because I'm beginning to believe the worst is true about the state of the dollar. I started investing in gold stocks 6 years ago simply because I saw the charts and believe even bear markets like gold's eventually end. I was way early. It hurt bad being that early. But I stuck with it and have made up my losses and more. If this is a new gold bull market, we are only 1 year into it. If it isn't, it sure is a long bear market rally. And it is an odd bear market rally indeed that lets a little guy like me recoup all the losses of the prior 5 years and then some. Arguing in favor of hedgers long term in today's market reminds me of those arguing in favor of long term tech investmest circa October 2000. All the signs of a sea change are there in the market right now. The only thing that argues in favor of hedgers is bygone years of mild relative outperformance. Disclaimer: One must reevaluate one's positions every few weeks or so. What I write is what I truly believe today. But I would not hesitate to change my mind if the facts as I see them warrant it.

To: russet who wrote (2385)	4/12/2002 7:40:38 AM
From: nickel61	Respond to of 3558

These are from an article by David Upham..Government intervention to keep gold’s price down is nothing new. In 1975, the U.S. Treasury announced two public gold auctions. The purpose was to exert downward pressure on the price of gold in the upcoming free market. From the Treasury’s point of view, these auctions were highly successful. Very little of the gold was actually sold at these auctions, but the presence of the Treasury in the market was a major factor in the price of gold then. A high price would have established gold in the public mind as a store of value and a true way to protect assets against fiat money inflation. A low price would cause the public to lose interest. The auctions amounted to taking what had always been a strategic asset of the United States and dumping it in order to depress the price. In May of 1976, as a partner in crime, the International Monetary Fund (IMF) announced that it would auction 780 thousand ounces of gold every 6 months until 25 million ounces had been sold. The schedule was changed in 1977 to 524.8 thousand ounces every month. As you might imagine, gold fell in price reaching a low of $103.50 per ounce on August 25, 1976. Subsequent US Treasury and IMF gold auctions took place for several years. Despite ongoing auctions of increasing amounts of gold, the price of gold turned around, climbing to $186.60 at the end of March, 1978. Everything possible was done to depress the price. The reason stated was that U.S. Treasury officials, the IMF and other central banks wanted to "continue progress toward the elimination of the international monetary role of gold." Monetary history details the relentless pursuit of inflationary policies of the US government and the Federal Reserve Bank over the ensuing years. Because of the inflation problem and despite massive gold sales, gold’s price rose eventually to $850 per ounce in 1980. More gold was sold, but the primary reason that gold fell after that was the successful effort of the Federal Reserve to curb inflation. Rather than institute a program to establish sound money over time, the Fed chose to inflict draconian interest rate increases on the economy by switching from targeting interest rates to targeting the money supply. Short-term, the program was successful and inflation’s back was broken. Gold prices came down. Subsequent to that time, the rate of money creation has again accelerated. The problem for the Fed became how to maintain a stable currency without having to resort to monetary discipline. Answer: target the price of gold. It has now become common knowledge that the Fed continues to engage in actions to do just that. It knows that a rising gold price is indicative of a weak dollar. So keeping the price of gold down should keep the dollar strong. For the dollar to keep its status as a reserve currency if not the reserve currency, it must remain relatively strong. In "cooperation" with other central banks, large gold dealers and the US Treasury, there is an ongoing effort to keep gold at or near a target of about US $300. So far the program has enjoyed remarkable success. The dollar remains relatively strong despite economic fundamentals that would normally have weakened it. Gold has seldom been over $300 since mid 1997.

To: russet who wrote (2385)	4/12/2002 7:52:34 AM
From: nickel61	Respond to of 3558

"even if you take into account the illegal trade which may be the problem with Gata's ASSumptions of gold supply and demand. Illegal supply of gold is the big unknown,...and I'm not talking about from Fort Knox (ggggggggggg) 20 years ago, the arguments for gold going up were the same as now,...but it collapsed from US$800,...too much supply is hidden and unknown. To much supply can be found by digging. Too much supply in bank vaults. I agree with this portion of your analysis..I have long been suspicious of the total amount of gold that the media claims to be extant in the world..it has been between 130,000 tonnes and 140,000 tonnes for as long as I can remember and that is over twenty years...improbable. I have no clue whether Suharto took a couple hundred tonnes under the table from Freeport McMoran Copper and Gold in order to allow the mining liscence in Indonesia or there is just a steady unreported stream, but you are quite right that would skew the analysis of GATA and the various consultants fairly significantly...not enough to even partially make up for the avalanche of paper currency creation that we are currently seeing but enough to maybe prolong the fiat monetary system longer than it's critics think..certainly something has.