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To: Moominoid who wrote (63477)	1/11/2003 9:59:12 AM
From: skinowski	Read Replies (2) \| Respond to of 209892

Gold is a good play if the Dollar is falling relative to foreign currencies This I understand, but please explain to me, how can be gold a good holding during deflation? This is what seems to be the main point made by Russell. My point is that the current measure of value is the dollar. During inflation gold goes up in relation to the $$. During deflation – a general decrease in prices and a respective increase in the value of money – gold will become cheaper. The only time gold may go up in value during deflation is if gold itself – rather than dollars – becomes the “active” money. This may happen if there is some sort of a great collapse, but that’s not a good bet. Besides, if such a collapse does happen (as I said above), than one should own physical gold, rather than exchange traded shares.