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

To: The Vet who wrote (20320)	3/4/2004 8:23:28 AM
From: sea_urchin	Respond to of 81913

Mr Vet > I believe inflation is firmly on the rise and that the CRB is clearly showing this. The CRB is an index only of commodity prices and its rise is definitely showing price inflation of primary products (resources). I understand this has a lot to do with unprecedented Chinese demand. However, there is deflation of industrial production throughout the world as result of enormous competition and potential overproduction. So, the overall "consumer price index" is anyone's guess. > The "official" CPI figures have been so manipulated and massaged as to be virtually useless as a gauge of inflation. Of course, anything "official" is just a joke. > Gold acting alternatively as a currency and a commodity tends to fall in and out of each camp, That is perfectly true. Gold is, in fact, either a currency or a commodity and is demonstrating that peculiar ambivalence right now. While the USD was falling and commodity prices were rising (over the past two years), the gold price was allegedly driven by both factors. However, now that the USD has strengthened and POG has fallen simultaneously it is clear that the gold's main motive force was as a currency hedge against the USD and not a commodity. In fact, physical gold demand has been falling for the past few years and possibly even as result of the increase in the gold price. technicalindicators.com >>>For the latest available supply and demand figures for physical gold, the World Gold Council has published actual figures for the past several years. Although there has been a slight improvement in demand (2.5%) for the 3rd quarter of 2003, the supply has consistently been higher, increasing 24% in the same quarter. Supply remains at such high levels that 15 European countries had to agree to withhold their surplus gold from the market, selling it in smaller quantities and over a longer of period of time in order not to flood the market (see below for more detail). Gold fabrication demand for the past year was near the lowest level in 5 years, attributed mostly to the slowdown in world economic growth. Jewelry fabrication (which represents about 2/3rds of gold use in the U.S.) fell 5% last year due to weak consumption not only here in the U.S. but in many East Asian markets and the Middle East. Industrial fabrication (mostly electronics) fell 14%. Although there have been signs of improvement in the last half of the year 2003, they have been so far only slight and not yet significant change.<<< > Japan can print as many trillions of yen as they please and use them to buy dollars to recycle into US treasuries but all that cash eventually surfaces somewhere and inflation must result. Yes, there is a continuous devaluation of all currencies and destruction of "wealth". Things, everywhere, cost more and more in numeric terms all the time. But in "real" terms, I don't think the value of anything (except CEO's salaries in the US) has risen. So everyone, everywhere, is in a constant struggle to try and preserve the "value" of his assets both against inflation --- and deflation. And this is no easy task. In fact, we are all compelled to resort to some market-related activity to do this where an additional problem is that in any market there are always differences of opinion. And, as you have suggested, the emergence of price "bubbles" in virtually every asset class due to the surplus money trying to find an outlet.