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To: fedhead who wrote (142529)	5/24/2002 5:33:02 PM
From: yard_man	Read Replies (1) \| Respond to of 164684

>>Are there other fundamental reasons beside the threat of war to hold gold ? << yes -- quite simply --> the potential loss of confidence in economic "policy-makers" and financial pundits. This will certainly happen if recovery fails miserably. AG has been hailed as all powerful and all wise -- if folks reach a state where they no longer trust him and the financial establishment -- gold will do really well. Also, it is a hedge against a declining dollar which will probably result from an adjustment of the current account deficit. A declining dollar means inflation with respect to the purchase of foreign goods. Excessive fiscal stimulus and or monetary inflation is another reason -- drudgereport says we haven't hit historic highs on govmnt spending as a % of GDP, but it is accelerating and it is no accident. The reductions in interest rates and tax cuts are not stimulating the rebound that they had hoped for -- AG has indicated, I'm sure, to Bush and congress the need for rapid and large fiscal stimulus. Hence the farm bill, all the bloated security measures -- what have you -- the fact they are going this route means one of two things -- they will fail (my guess) or price inflation will be ignited in a big way if business investment were to pick up -- either way is a plus for gold. All these things are inter-related -- best thing you can do is ignore these fundamentals and simply watch the price of gold and the mining shares, IMO.