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Gold/Mining/Energy : A to Z Junior Mining Research Site -- Ignore unavailable to you. Want to Upgrade?

To: 4figureau who wrote (3563)	3/4/2003 11:09:17 AM
From: Jim Willie CB	Respond to of 5423

excellent clip from ANON's article on K-Winter (on gold) he argues very forcefully about Prechter's incorrect view he brings evidence to the table to support his contradiction a good solid set of simple arguments capital is fleeing paper money and seeking hard money it is about as simple as that I dont understand how Prechter can have his head so far up his ass he clearly maintains a DEMONETIZED view of gold incredibly naive and lacking insight Robert Prechter's Gold Price Target - $200 Some gold investors are concerned because Robert Prechter of Elliott Wave fame is calling for gold to fall to $200 per ounce. Normally, I would pay attention to anything that Mr. Prechter has to say, but his stance on gold is clearly incorrect. He argues that if the gold price had not been fixed during the last depression it would have fallen like the price of all commodities, including silver, on account of a reduced demand. This was of course true for all other commodities, but gold in the Depression took on its historical role as money of last resort. In the early 1930's, the demand for gold was enormous, based on distrust for paper money and a rising tide of bank failures. So large was the demand that Secretary Treasurer Lamont informed President Hoover, towards the end of his tenure, that the US would soon run out of all its gold. Roosevelt assumed the presidency in March 1933, and immediately ordered the confiscation of all gold that US citizens had amassed, so as to replenish the US Treasury. Indeed, one might argue that had the price of gold not been fixed, its price, based on this huge demand, would have risen considerably. In his book Conquer the Crash, which I encourage you to read, Prechter writes, "I suspect that the reason that people bought gold then (early 1930's) is that the US government had fixed the price, at $20.67 per ounce. While everything else collapsed, gold was soaring in relative value, and its value gains were guaranteed. Who wouldn't buy it? If the government had fixed the price of any other substance, people would have invested in that instead. Today, gold, like silver in the 1930's is free to trade at market price, which means that it can go down during a dollar deflation." But what we are now witnessing is a dollar deflation, and the gold price far from falling is rising. It is true that gold was soaring in relative value to all other commodities. If the government had fixed the price of, say, steel, would everyone have rushed to buy steel ingots? The gold price was fixed because it was money and convertible into paper dollars at the fixed price of $20.67. People and countries exchanged their paper dollars for gold coins, simply because gold was money. By the way, it still is money. Though it is very early into this winter cycle, gold is already being accumulated by knowledgeable and concerned investors. Just as people like Bernard Baruch, began to purchase gold and gold mining shares following the 1929 stock market crash. The gold price is rising because demand is increasing all over the world. On January 9, 2003, Ron Insana reported on CNBC, "a gold dealer that he has known personally for a long, long time recently told him that throughout his entire career (the dealer's) he has never seen so many high net worth people buying so much gold." Reported in Richard Russell's Remarks on January 9, 2003. / jim