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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Gary H who wrote (17636)	3/25/2003 2:28:18 PM
From: sea_urchin	Read Replies (1) \| Respond to of 81101

Gary, thanks for the pieces by Sinclair and Richard Russell. Someone sends me Russell's newsletter every day so I am familiar with his views. I have to say that I think he is really flogging a very tired horse by continually recommending gold as the only lifebelt left in times of inflation and deflation simply because it was so in the 1930s. Gold, today, is quite a different "animal" from what it was in the 1930s when it was a reserve currency for all nations and a true store of value. Because it was a reserve currency the central banks kept buying it. Now it is effectively a commodity which has a particular appeal to certain vain men and women who like to adorn themselves in it. Clearly, if there is an economic depression and people are drowning in debt, the last thing anyone will think about is covering themselves in jewellery which, as we know, is the main use for the metal. On the other hand gold futures or gold calls or puts are quite different from gold, itself. As I understand it, the market in gold derivatives is many times that of the market in the actual metal and is purely a casino based on paper, very much like that in gold shares is. I think it's important to remember that when one buys paper that's all one is buying. It's complete nonsense to buy gold shares, especially in marginal or non-producing mines, and then kid oneself that one is buying "gold". The gold price has fallen from $385 to below $330 and even though the Iraq war is a complete balls-up the gold price will not stay above $330. Unquestionably the "rainy day" is still to come --- yet no-one seems to want the "raincoat". Surely that tells us that the gold party is over --- at least, for the time being. Anyway, I am sure that if POG falls $100 or even $200 the goldbugs will still be telling us to buy gold or gold shares and reassuring us that gold is the only insurance for a rainy day --- and good in times of both inflation and deflation.