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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: At_The_Ask who wrote (24435)	10/22/2002 2:09:32 AM
From: Maurice Winn	Read Replies (2) \| Respond to of 74559

Gold is money, to some extent, but unlike money, gold has a wide range of other uses too. One of which is to satisfy a sense of luxury, which people in thrall to the Wealth Effect can afford to indulge, by buying gold door-knobs, gold chains, gold this that and the other. When the Wealth Effect goes away, as it has, quite seriously if you ask around, the inclination to drape gold around the place reduces. Those who cause it to decline are those who fail to buy it and those who thought they should cash up some of their gold for whatever reason so decide to sell. More sellers than buyers! The normal reason for prices to drop. I don't see why people who sell gold are going to pay, albeit eventually. Who are they going to pay? I suppose they'll pay the people where they spend the money, which doesn't seem to worry most people. The Aztecs have waited 2 decades for somebody to pay, but prices continue to wallow around the $250 - $350 level, year in, year out, despite the most dramatic stock market implosion in living memory [other than some real oldies] and huge financial gyrations and vast pixelation of extra Uncle Al KBE product. His business is booming! He's producing more $ than any other business on earth and it's almost 100% profit. Most products undergoing such a boost in production would have a declining price. Amazingly, he is managing to produce at huge rates without having the price of his product [as measured by the inflation rate] falling. Not many businesses can increase production so dramatically without causing their selling prices to drop. The USA is making vast profits from the process. They can continue to hire the world to work for them since the $ continues to retain value. Mqurice