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

To: nickel61 who wrote (2412)	4/15/2002 8:31:29 PM
From: russet	Respond to of 3558

Sorry,...I believe there is no intrinsic relationship between gold and other currencies given the current realities of life in this world. I definitely believe gold is a commodity, and its price will swing around the total net costs to produce an oz by the most efficient producers. There is good competition amongst producers. Demand is mainly dictated by the jewelry and collectibles market. Store of wealth demand is country dependent and is a small percentage of annual demand. Every year much more is produced, than consumed and the above ground supply increases every year. Gold is a small part of the economic activity in any industrialized nation. You want that to be otherwise, but only because you invest in it and want increased demand to drive the price up. If you are concerned with unnatural perturbations in the POG, why are you not concerned with the gross mismanagement of resources that occurred when central banks accumulated it in the first place. That store of central bank gold now looks silly given what the POG has done the costs to store it. It has made it possible for Barrick, Anglo, Newmont, Normandy and others to implement their "evil" hedging programs, and secure above average compensation for their gold. Let's face it,...you want POG to increase because it is in your best interests,...no other reason. I do too,...but I'm not going to invent all sort of conspiracies and perceived intrinsic values and causal links to justify my position. Neither we, nor any of these so called experts know where the POG is going in the next year, next decade, or next 100 years. Technological advancements and exploration finds could blow the lid off of constrained supply, and demand is fickle as it relies primarily on the jewelry market and the odd crisis. Once the crisis abates,...the POG goes back to the commodity price based on original supply and demand. I have no problem with fiat currencies. I would have a problem with the unnatural constraint of a gold standard. Politicians do not want rapid fluctuations in their currencies, so will respect the laws of supply and demand to keep there value the same relative to other fiat currencies or suffer the peoples wrath eventually. As long as all currencies devalue relative to goods and services at the same rate, no one cares. If a country's government does not put in place policies to moderate their currencies fluctuations, they will be turfed out in one way or another as the world is becoming a very small place and education is slowly filtering to all people. The increased lending that occurs with fiat has resulted in growth and advancements in technology, efficiencies and socioeconomic advancements that would never have occurred if we allowed the amount of gold in some vault to constrain lending. We live longer, and better and far higher up the socioeconomic ladder than we would have if gold was our master economic governor. A company that borrowed fiat, may discover the cure for the deadly illness that would have consumed you or a friend or family in earlier years. Fiat has definitely made my life better. Gold directly has done nothing for me,...but a few companies that explore for it and mine it have made me lots of fiat which has bought me lots of goods and services. Back to work now,...this conversation on gold is not helping me make a cent. I think we said it all, and we can agree to disagree and go on with our lives.