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

To: mcg404 who wrote (18024)	4/17/2003 3:51:22 PM
From: sea_urchin	Read Replies (1) \| Respond to of 81023

Hi John, I see we are going round in circles with the currencies v gold discussion. In fact, I'm sure you were attracted to this paragraph: >>>Precious metals are driven by one thing--currency debasement. Right now, the currency is being debased like crazy--try checking M3 growth for the last 10 years. This has not been reflected in the POG and POS for a number of reasons that are well-known to readers of the PM boards. It will only be a matter of time before gold & silver begin to rise. If they don't, we'll all wind up in labor camps--count on it. (Think it all the way through, the conclusion is inevitable).<<< As I mentioned before, and please believe me I'm no expert on the subject, merely another mug trying to protect himself in the storm, my reasons for being wary of this argument are: 1. There's not enough gold to hedge against all the currencies, let alone the USD. 2. During the past year, when it was clear to any reasonably observer that the currencies were all being debased, and especially the USD, gold bullion purchased for investment actually diminished from the previous year. In fact, if I remember, gold purchased for investment is only about 10% of gold sold, which is paltry. 3. Since I am a gold share investor, not a operator in gold derivatives, my interest in gold is to see that the mines actually mine more gold not less, and especially as the price rises. This has not happened even as result of gold purchased for jewellery. 4. The spike in the gold price and the subsequent fall in POG, prior to the Iraqi war, indicate to me that the recent speculative fervor has passed. I don't say it can't or won't return some time but I don't see that happening in the immediate future. My experience with charts has shown me that whenever a pattern has occurred similar to that which we have witnessed in the gold price the trend which led up to it has terminated. 5. My own long term analysis "model" has given sell signals for both gold and gold shares. I won't elaborate further because you can't see what I am talking about. Apropos a round of currency devaluations (in fact, I have used it myself) the difficulty I find is that an arrangement like this brings one back to where one started. Either a currency devalues or it doesn't. And clearly, this cannot be used as a "back-door" argument for an increase in the POG because either POG goes up or it doesn't and while the gold price is measured in dollars, or what have you, then that is its price. > Have you seen this argument for the war? Yes, we discussed it here some months ago. I'm sure there's some truth in it and in fact now that the US is disliked even more than it was before, particularly by the big nations of Europe and OPEC, I'm sure it will become even more important in the future.