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

To: Jamey who wrote (22108)	12/6/2004 1:25:05 PM
From: sea_urchin	Read Replies (1) \| Respond to of 81164

James, since you don't accept, or possibly understand, the point I'm making, let me quote from Mr Hamilton's paper and I'll criticize what he says, point for point. >>As the invisible hand of the free markets, really the collective buying and selling decisions of every gold player on the planet, guides prices, signals are sent to gold producers, consumers, and investors. The higher the gold price goes, the more gold producers want to sell. Higher gold prices lead to higher supplies of gold as miners around the world rush to capitalize on the increased profit margins on their product.<< The gold price is going up only in the US, nowhere else. Furthermore, despite the increase in price, there is no increased demand for gold, neither in the US nor anywhere else, only speculation in futures. Thus, as I have said, this bull market is quite different from the one Hamilton is referring to in the 1970s and therefore cannot be measured against parabolic graphs or whatever derived from that time because the factors driving this market are completely different. >>Even more importantly in Stage Two though, since gold’s gains start outpacing the dollar’s losses gold starts rising in virtually all currencies worldwide! Rather than appearing flatlined, a mere product of the dollar’s misfortune, gold starts showing up on foreign investors’ radars as it consistently carves new local-currency gold highs around the world. And not surprisingly foreign investors, who generally know how fragile governments and fiat currencies truly are, are far more receptive to gold investing and don’t need convincing like Americans.<< Gold's gains are not outpacing dollar losses. And gold is not going up in all currencies worldwide. Maybe it will, but so far it hasn't happened. As I said, the gold bull exists nowhere except the US. Therefore there's no point in fantasizing about a world-wide phenomenon that hasn't even started. >>After five or so years of Stage Two gains, gold has a chance at going ballistic in Stage Three. Stage Three is only ignited if the general public around the world starts growing enamored with gold investing.<< Except for the US, there hasn't been Stage Two. So, what's the point of talking about Stage Three? It's worse than counting one's chickens before they have hatched! In the present situation there aren't any eggs to hatch. >>It is crucial to realize that this unfolding secular parabola is totally dependent on only one force, global investment demand for gold. << Since there is no global investment demand for gold there can be no parabola. >>gold investment demand only increases as gold prices march higher in currencies around the world. The higher the gold price goes, the more demand it spawns<< As I said, the gold price in various currencies, except USD, is not rising nor is there any substantially increased demand for gold, even in the US. Accordingly, the prophesy is not applicable. >>So far our current gold bull is tracking this model perfectly. Even better, increasing empirical evidence suggests Stage Two is near<< Only in Mr Hamilton's dreams. But I do accept that he may be clairvoyant.