Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: sea_urchin who wrote (17706)	3/31/2003 7:41:04 AM
From: mcg404	Read Replies (1) \| Respond to of 81092

Hi Searle: re: my earlier comment 'No sense continuing this discussion' In hindsight, i realize this statement sounds dismissive - which was not my intent. I respect your opinions (for the most common and useless of reasons, they frequently mirror my own!) and was only trying to say that, like you, i've heard already heard the con arguments and it doesn't matter what Searle or John thinks anyways - the collective decision making of the markets will give us the one 'correct' answer. <statistical model...multiple regression...there's a 90% chance that it is right.> Sounds reasonable...if you believe human behavior can be modeled (which i do). But it still can't tell you if 'this time it's different'. But if you're right 90% of the time, it doesn't matter. James Surowiecki wrote an interesting article a couple weeks ago (which is no longer available online) about the use of artificial markets as tools to predict future events. Gave examples of hewlett-packard creating an artificial market allowing employees to buy/sell shares depending on what they thought company sales would be in a particular month and plans by the US defense department to set up a 'market' to speculate on strategic and geopolitical events. Bottom line being that it's difficult to outperform the predictive decision making ability of the 'crowd'. And 'the crowd' is always right about share price anyways, even when they're not. John

To: sea_urchin who wrote (17706)	4/4/2003 2:06:51 PM
From: mcg404	Read Replies (3) \| Respond to of 81092

Searle: Contrary Investor ran a column yesterday on gold. It's a pay site so I'll summarize. Linkage between a valuation benchmark such as gold and paper currencies has been severed in modern financial/economic era. When countries have developed financial/economic imbalances, global capital markets have served to correct them (eg, asian economies in 1997). Things have changed in the USA, which is also the country with the reserve benchmark - USA is now the largest debtor nation and running large trade and current account deficit balances. Global capital markets are between a rock and a hard place in correcting this imbalance since they stand to suffer if they impose discipline. How far can these imbalances grow before global capital seeks a benchmark that is an alternative to paper? If the current benchmark (the USD) becomes tarnished, where does global capital go? Other paper? If they tires of chasing other financial benchmarks, does it decide to benchmark against physical commodities? The only investment basis for gold is as "insurance against the ability of current global economy and financial system to correct what are very significant imbalances without some type of financial disruption. The disruption specifically being currency related...the historically recent decade acceleration in the proliferation of paper promises throughout the global economy cannot continue indefinitely without a crises in benchmark valuation confidence at some point." I'm not really trying to argue a point. Only passing on what I found to be interesting observations. As I continue to contemplate pulling the plug on my gold investments... John